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Understanding Industry Benchmarks

Lesson 5 from: Conversion Rate Optimization: Convert Visitors Into Buyers

Rita Cidre

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Lesson Info

5. Understanding Industry Benchmarks

Lesson Info

Understanding Industry Benchmarks

now that you know your website's conversion rate. The next step is to decide what should your conversion rate be. There are two key ways to answer this question first. You can take a look at industry benchmarks to understand what a reasonable conversion rate could be for your site second you can work back from your business objective. Let's take a look at both of these approaches. Option one is to take a look at industry benchmarks. Benchmarking is a process where you compare your site's performance to that of your industry to get a sense of how you're doing. There are many sites that publish conversion rate benchmark information. Let's take a look at three in this section. I am going to walk you through three different sources for benchmarking data benchmarking data allows you to understand what your industry conversion rate looks like. So you can know whether the conversion rate that you're seeing for your site is high or low and make the necessary adjustments. So the first time that...

I'm going to show you here is called I. R. P. Intelligent commerce. It's um really robust set of conversion rate data for online businesses. So you'll see here that at the very top you can select the time frame, this is a little different from the timeframe selection in google analytics where you can select a range Here, you basically select one month versus another. So you can take a look at October 2020 vs October 2019 for example or the two different dates of your choosing. I'm gonna scroll down here and I'm going to select fashion, clothing and accessories because I saw handbags. So that is the closest thing to the kind of industry I'm in. And if you scroll down, you can see a bunch of information here, but we're going to focus on this row right here on conversion rate. So it looks like The conversion rate for October 2019 was 1.44 for the fashion, clothing and accessories industry. Uh and it's 1.7% for 2020. So that's a point 26% difference is an increase in conversion rate from one year to another. So that's interesting to start. So if I'm running my own aecom worse business in the fashion clothing and accessories um space you can ask yourself, am I higher or lower than any of these numbers to get a feeling of sort of where you rank within this particular industry. If you scroll down, um you could really spend a lot of time in this website. But if you scroll down, I think these graphs are also really interesting to look at. So if you're trying to understand the benchmarking uh benchmark conversion rates for your site. This graph in the bottom here, for example, could be really interesting. So This compares conversion rates 2019-2020 for my industry And you can see that 2020 there seems to be there, there has been a huge growth in conversion rate that sort of ended around May. Um this is the year that we had the COVID-19 pandemic, a lot of shopping shifted online so I'm gonna go ahead and hypothesized that that had something to do with the spike in conversion rate that we're seeing here. But at this point in october it's kind of normalized the year over year, it's looking fairly similar. Um And so this is just another data point that you can take a look at to understand whether the conversion rate that you saw at the tippy top is the one that you want to select as a benchmark or not. The same as we talked about when we looked at google analytics data. If you're seeing a lot of volatility in conversion rates you might want to pick We might want to pick a month that is kind of an average conversion rate for this industry as a benchmark as opposed to a peak and valley. So you might want to pick October 2020 as your benchmark points at 1.83 as opposed to um as opposed to May 2020 which was the peak of 1.9. Actually that's 2.5%. Um for 2020. So I would say I. R. P intelligent commerce is probably the best source of benchmark information. If you really want to play with a lot of data if you really like data crunching you can spend a lot of time here but if you're looking for something that's a little bit more direct into the point there's a bunch of other sources of conversion rate information. A lot of marketing providers and marketing brands will publish conversion rate data at the beginning of each year. So this is just another example. Should be pro for example here has their average conversion rates by industry. So I'm going to take a look at here, fashion, clothing and accessories. You can see this is much lower than what I. R. P. Is reporting. So if you wanted to be much more conservative You can go with what should be pros benchmark. It's for this industry which is at a 1.01% conversion rate. I'll show you one last one. This is an excerpt from the Adobe digital index 2020 report that looks at conversion rate as a sub segment of the report. This has a different set of industries here on the left. But given that my product specifically is for the most part given as a gift, I'm just going to select or to just say that gifts is sort of what fits most most broadly within the category of what I'm selling. And they are saying that in the gift category the conversion rate average here is 4.9%. So this is the adobe digital index is by far on the high end of conversion rates. So you can see that each of these sources. I. R. P. Commerce should be Pro and adobe, how different conversion rate benchmarks that you can play with and based on the information that you have for your site and the knowledge of your product and your customer you can decide which one makes more sense. We gathered three conversion rate benchmarks. Let's now take a moment to write them down on your worksheet. First there is 4.9% from adobe. Then we have I. R. P. Coming in lower at 1.23% And finally should be pro at 1.01%. Looking at industry benchmarks is a great way to understand whether your site's conversion rate is good, great or needs improvement. In my case my sights conversion rate is at .6% so there's a lot of room for improvement which is a great thing now that I know how others are doing. It's time to move on to the second and most important factor that should influence your conversion rate goal, your own business objectives

Class Materials

Bonus Materials with Purchase

CRO Tactics Cheat Sheet.pdf
CRO Formulas and Definitions.pdf
Fiverr Conversion Rate Optimization Worksheet - Rita Cidre.pdf