It's not the size of the conversion, but the results that count.
"Not everything that can be counted - counts. Not everything that counts can be counted" - Albert Einstein.
A few weeks ago a buddy of mine (and former employee of MOB Media) called me up to ask a question that I get asked all the time. "What's an average conversion rate for online", he asks. He might as well have asked me the basal metabolism rate of mammals. If you actually clicked through on this link you'll see that the quandary for answering that question is not unlike answering the conversion rate question. To sum both up, it all depends! Before you think I am about to break great new ground here and talk about the average conversion rates for email, search, display and SMO, forget about it. What I'm really going to talk about is how it truly doesn't matter. What matters are results and ROI and maybe ROAS.
First, I need to tell you why conversions are not the holy grail and why they vary and thus for "average-purposes" should be relegated to the scrap yard. My experience tells me that the average conversion rate for most publishers, clients, portals what have you is around 2.5%. There are studies out there that say around 2.8 or so, but those studies overreport Fortune 500 type sites. Why should that matter? Because you should be doing better if you have a site with brand awareness, a ton of equity, a big ad offline ad budget and working in the consumer space as well! There are just too many factors to consider when comparing average conversion rates:
1. Consumer or B-B?
2. Ad channels available
3. The offer
4. Awareness Quotient
5. Design and usability
6. Overall goals of the site
7. Defining a conversion!
8. Industry
It would be horrific if you just relied on the average conversion rate to judge your site. You would be comparing your site to an average rate taking in all industries and types. That's why ROI and ROAS (profitablity measures) are what you should be using in evaluating your site. By the way for a quick review on ROAS calculations which is almost too simple go to this site. But in the direct response world, we're all more concerned with ROI and that is easily defined by how you define it. An internal ROI conversion rate is a known entity to you and its whole purpose is to achieve higher sales and profits based on a cost per lead or acquisition model.
Now, I will show you how using an average conversion rate in real life can be detrimental (let's use 3% avg conv. to make it easy math). MOB Media spent $10,000 monthly on banner display ads for a client and their average order size was $40. IF we had only driven 5000 people to the site and the average conversion rate applied, we would have lost that client money to the tune of $4000 in the red. Instead we converted at over twice the average conversion rate with a 6.7% conversion and made the company $3,400 that month (total gross sales of $13,400, do the math folks!).
Bottom line: conversions are a poor substitute for sales, profit and cost per acquisition/lead. You can have huge conversion rates and sales could suck. Use ROI as your metric, you'll go places!