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Conversion Rates

These conversion rates or ratios are, in part, a measure of success of your web site.

There are two main ratios to consider:

a) what proportion of people visit you site when presented with the opportunity to do so: through a link, search engine or as a result of seeing an advert

b) what the number of visitors converts to in terms of pounds, dollars, leads etc.

There are a number of factors that affect this - if you attract the wrong audience (b) will be low, if you dont present yourself properly then (a) will be low. If your links are in the wrong sites or unpopular sites (a) will be low. If your service is unique or in high demand (a) and (b) may be both relatively high.

In theory you need to achieve high rankings in both. This will be achieved if you focus on what your customers want, have a high quality service, competitive pricing and an effective sales message.

In planning your web site you will have to estimate what these might be. You should be aware that a conversion rate of 1% for (a) and 5% for (b) would not be uncommon. This would be mean that only 0.05% of visitors that could find you on an engine or other advert convert to actually spend money. This sounds very low - but then think how much of newspaper is advertising that you ignore, or how many shops you always walk or drive past to get to the handful that you use.

The conversion rates could vary very widely depending on your product, site and market. You also need to view the initial order or sign up, as a customer acquisition process, and you will seek their return. If you are planning an ecommerce operation (and to an extent, other web operations too) you can get an idea on estimating your conversion rates by using the following techniques:

1) Commission Junction publish the differing conversion rates for click through to commission paid for their advertisers, as well as the commission rates compared to sales value. You can look through to get a rough idea what rates are achievable for a range of businesses.

2) You can join some programmes listed on the networks at UK Affiliate Programmes. You can then easily set up (there is a modest cost to this) simple adverts at GoogleAds to get a rough idea of how popular certain adverts might be. If you have an commission earning affiliate link, to a site similar to your planned site, you can see how what commission you receive and extrapolate the customer acquisition rates and initial revenue.

We have conducted experiments for a range of consumer targeted web sites. The best click through rate (a) we got was 12%, the worst was 0.5%, on highly focussed keywords. The best revenue conversion rate (b) was about £1 (total sales value) per click through and the worst was <£0.0001 per click through.

Given this is a difficult area to estimate, it is prudent not to make assumptions of high conversion rates. Do not spend your entire budget or bet your business on your first site development. If you have an initial operation underway, you can build up some real market data, and then still afford to make changes to improve your performance.


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