TL;DR – You may have seen a post I wrote recently entitled: “Why you’re not getting sales – how to improve conversion rates.”
So you might be thinking, why am I now seeing a piece called ‘do conversion rates matter?’
Well, I wanted to give balance. In short, they don’t ALWAYS matter. Sometimes they do, but there are plenty of times when you shouldn’t look at that number in isolation. I guess you should read the rest of this article to know what I mean. This is why conversion rates don’t always matter.
Before you zoom past, you may want to check out our second part to this. Click the link below and open it in a new tab for later.
Table of Contents
What’s a conversion rate?
If you stumbled across this post on a rabbit hunt, I’ll nutshell it for you. A conversion rate is the percentage of successes you achieve based on the number of people who come your way. If you have a brick and mortar shop and 100 people walk by your A-frame sign out side and 2 walk in, you could say your a-frame has a 2% conversion rate.
If you get 100 people in your shop and 10 buy, then that’s a 10% conversion rate on that metric.
If you drop 10,000 flyers through people’s letterboxes and 20 come into your store to redeem an offer, that is a 0.2% conversion rate. So that is what a conversion rate is. If you want to see more on this topic, we have a bit more of a deep dive here:
- Conversion Rate Optimisation with Deathground
What you can see on this small explanation, is the only thing that remains consistent when talking about conversions, is the notion of it. The calculation, example or definition of success varies on many factors.
What’s the best conversion rate?
You might have landed on this page, because you searched:
- Best Conversion Rates
- What’s the best conversion rate?
- What is a good conversion rate on Amazon?
- What is a good conversion rate on Facebook Ads?
Here’s the secret, there isn’t one.
Well, okay, 100%. Of course 100% would be perfect, but every situation is different. If you were bemoaning a leaflet drop conversion rate of 0.2% because your mate had 2 in every 100 people walk past his A-frame, pop in, it wouldn’t take much statistical analysis to know that it’s a nonsensical comparison.
Afterall, you might have an A-frame too.
Apples must be compared with apples, and this is the first step in understanding why not all conversion rates matter.
Comparing how you do with one set of people or data, against another with another product potentially, is what so many do, but it’s a shortcut to making yourself unfairly happy. That or stupidly ignorant.
In short, there is no best conversion rate, not in the way you are probably googling.
When does a conversion rate not matter?
Let’s pretend you have 100 visits on your site a day from people who googled ‘Buy Yellow Widgets Online’. and let’s pretend you sell those same yellow widgets online too.
Well, happy days right? You’ve got transactional visitors who are looking to buy what you are selling.
£25 a customer vs ?
But hold up, you don’t know the full story yet. Those visitors to your site, are at a cost of £2.50 a click. So that’s £250 a day for 100 buyers. If you turn 1 in every 10 into a buyer – you’ve done well, as that is a 10% conversion rate. It’s cost you £25 to get that customer, so you need to make sure your margin is sufficient to absorb that cost.
So you rock on up to Reddit and drop in the “I’ve got a 10% conversion rate” brag. Meanwhile, I respond, that I’ve got a 1% conversion rate and I’m kicking your ass. Why?
This is why.
You have focused on PPC, paid ads and you’ve decided to target the very bottom of the funnel. That means surfers who are ready to buy now. These people are in the buying mode and this part of the advertising space is competitive. I decided to take the longer, more scenic route however and with my 1% conversion rate, I am about to show you why conversion rates don’t always matter.
The Alternative Approach
While you put your paid ad together, I was writing a blog post, all about how to choose the best yellow widget. The blog was worded perfectly, so not only did it pick up those looking for ‘best yellow widget’, it also picked up those who were looking for advice on how to pick them too. This long tail organic keyword, had very little competition and traffic I could help out.
It’s also something that would get me, visitors, all day, every day. There was no ‘max budget exceeded’. While this page was waiting to be indexed and gradually rank, I also ran an ad campaign on ‘red widget alternatives’ and ‘best yellow widget 2020’.
I decided to advertise my blog post, not a money page, but actually a blog that addressed a question specifically. Normally when you type ‘best X product’ into Google, the paid ads are a little arrogant. They are generally product pages from companies, self-declaring themselves as ‘Best’. In this scenario, I went different. I wrote about how to find the best X.
Let’s be honest, if you search for Best anything, you probably want to see a review or a list article, right?
This approach means my ad will be clicked more than others, simply because I serviced the search intent more accurately. This kind of work brings the cost of the ad click down.
Money in the Margins
By working in the margins, by being a little niche, I was able to get 1000 clicks on my page per day for 10p per click. I used Microsoft Ads, Quora, I went long tail ever with the choice of advertising platform. So while I only received 1% conversion rate, my cost to acquire a customer was £10 per sale. I too got 10 sales per day, but at an ad spend of £100.
My conversion rate was lower as I was taking visitors on a journey, perhaps they weren’t all ready to buy like the other campaign visitors were – but I still got my sales and with a greater profit too.
That’s why conversion rates don’t always matter. Every scenario is different, every site attracts customers in different ways, you just need to compare your conversion rates for the same type of customer against yourself from a different period.
One Truth About Conversion Rates
Here’s one truth about conversion rates – you can always raise them. There is no company out there that is not capable of doing a little more to convert a good deal more. From improved navigation, to better CTA wording, or a faster site, there is invariably something every company can do. But there is one thing you cannot do and hope to get anything from it – compare your conversion rates blindly against another.
It’s a flawed analysis.
Now, lets fix your conversion rates shall we? Check out our Conversion Rate Optimisation Calculator