Analytics Insider

This is probably the most common question I get as a consultant specializing on Conversion Optimization. What is a good conversion rate? What should my conversion rate be? I currently convert at X%, is that good?

The correct answer is never particularly direct. Conversion rates vary widely based on many different factors such as price points, audience, marketing channels, etc.

With that said, I was reminded today about the Fireclick Index. According to the index (numbers accurate as of this post date), here are the conversion rate benchmarks for different industries:

• Fashion & Apparel: 1.80%
• Electronics: 0.10%
• Catalog: 5.00%
• Specialty: 0.90%
• Outdoor & Sports: 1.30%
• Software: 7.80%

These numbers are “compiled from the live statistics of participating Fireclick customers.” There is so much room for obfuscation here. Why is the electronics category so amazingly low? If a client came to me selling a $30 electronics products and they were converting at .20%, I would certainly not tell them that was good. And yet, that’s twice the industry average according to this index. Also, what is the price point on the majority of the software Fireclick customers are selling? 7.80% on average seems high compared to the others.

If you ignore the electronics and software outliers, conversion rates between 1.5% and 3% are very common, and you’d expect catalog based sales to be slightly higher so their numbers are probably in the ballpark.

To answer the question in the title of this post, “What should my conversion rate be?” – I have to leave you with one thought. On the web, average is BAD. When you have thousands of competitors, being just as good as everyone else basically guarantees that you will not survive for very long.

One of my clients is in the Fashion & Apparel industry and converts at about 6% (and there’s still room for improvement). If their competitor converts at the “industry average” of 1.8%, well, that rivalry probably isnt going to last very long.

The answer is you should always push your conversion rate higher. You should setting your own benchmarks and then breaking them every quarter. What are you doing to make that happen?

A PayPal survey revealed that nearly half (45 percent) of online shoppers have abandoned their carts multiple times in the past three weeks due to high shipping costs, security concerns and lack of convenience. The average cost of abandoned goods in U.S. shopping carts is $109.

High shipping costs was cited as the largest single reason for cart abandonment. While nothing could have prevented one-third of shoppers from abandoning purchases, the survey found that providing shipping costs upfront might have caused 40 percent to complete the purchase.

The survey also uncovered signs that the economy still has shoppers wary about clicking the “purchase” button. More than one-third of respondents abandoned checkout because they didn’t plan for all of the expenses; while more than 25 percent left the site to search for a coupon. However, one-third of shoppers later returned to the same site to buy. An additional 20 percent purchased the items at a brick and mortar store or competitor’s Web site.

“Merchants who don’t welcome back abandoners with open arms are leaving hundreds of dollars per shopper on the table,” says Eddie Davis, senior director of SMB merchant services, PayPal. “Merchants need to remember the items that customers abandon and make it easy for them to buy when they return. Sweetening the deal with free shipping, coupons and special discounts is also a great way to encourage online shoppers to complete their purchases.”

Breakdown on Why Shoppers Abandon

At least a fifth of all U.S. survey respondents cited the following as very important reasons for cart abandonment:

• High shipping charges: 46 percent
• Wanted to comparison shop: 37 percent
• Lack of money: 36 percent
• Wanted to look for a coupon: 27 percent
• Wanted to shop offline: 26 percent
• Couldn’t find preferred pay option: 24 percent
• Item was unavailable at checkout: 23 percent
• Couldn’t find customer support: 22 percent
• Concerned about security of credit card data: 21 percent

Netezza is hooking up with Semphonic to discuss market need and benefits of warehousing Web analytics and the strategic competitive positioning it helps organizations attain in an upcoming webinar.

Who: Gary Angel, president and CTO, Semphonic and Brad Terrell, VP & general manager, Digital Media, Netezza.

What: Warehousing Web Analytics–Transforming your Business with a Best-of-Breed Approach: In this webinar, Semphonic and Netezza will discuss how organizations can gain a market advantage. The panelists will explore the issues faced by organizations in traditional Web analytics reporting solutions and traditional data warehouse environments. This webinar will highlight the latest advances in Web analytics and data warehousing appliances, as well as how the two intersect to benefit an organization.

Key takeaways include:

– How to solve the core problems of warehousing Web analytics data: massive volume and high cardinality.

– How the lack of maturity and understanding around the use of Web analytics data influences decisions about data warehousing options.

– How the full-range of customer contact points extends beyond re-marketing.

– How information can be used at every stage of the online visitor lifecycle to drive more relevant conversations.

– The types of analysis enabled by data warehousing of Web analytics data and the business opportunities they create.

– Lessons for the digital media industry from other sectors on how to think about and use visitor/customer information.

When: Tuesday, August 25th, from 1:00 p.m. to 2:00 p.m. EDT.