Conversion rate on different buying stages

chewie49 · 14th Jul 2014, 03:45 AM

Hello,

In some industries, a 2% buying conversion rate is the Standard.

But we know, customers have different buying stages (recognition of a problem; Research; evaluation; purchase decision; post-behavior).

Each stage has a different conversion rate. So my question is:

Is the standard conversion rate of 2% in GENERAL of ALL buying stages? OR only for those people in the evaluation stage?

We all know that 2 visitors out of 100 will NOT buy. That's not true. Not even 1 out of 500 will buy, so I guess the 2% rate is ONLY for those people in the "ready-to-buy" stage,

Am I right? What do you think?

NK · 14th Jul 2014, 04:15 AM

I would think it really depends on a few factors such as the product, market and traffic. This is one of the reasons why you should always try to aim for a product that solves a particular problem, and then channel traffic that is looking for the solution you have.

You can promote the same product twice - one with highly targeted traffic and the other a much broader traffic and you will see a huge difference in conversion rates. So the answer is no, the conversion rate is different.

The industry standard really depends on the industry, even then it should always be used as a guideline. You don't stop optimizing just because you've hit the industry standard. It's something you keep working on until you feel that it's enough.

dburk · 14th Jul 2014, 11:12 AM

Hi chewie49,

Are you sing the word "standard" in place of "average"?

Of course targeting different stages of the buying cycle will result in a variance on direct response conversion rates. In fact the goals are often different for each of these stages.

Targeting the upper section of the purchase funnel is often considered educational marketing, or brand marketing. While targeting the lower section of the purchase funnel is generally referred to as response marketing. The goals are different for each of these types of campaigns, but they are all share the goal of improving conversions in the long run.

With educational and branding campaigns you are targeting prospect at an earlier stage and therefore the conversions often occur at a later date, so trying to measure them in the same way you measure direct response campaigns is likely to lead to invalid conclusions.

I think another thing that you are not considering in your question is market segmentation. There are many ways to segment your marketing other than just by "buying stages", and each market segment will have it's own unique conversion rate. It really does not serve much purpose to fixate on any "standard", or overall average conversion rate. You need to test and determine conversion rates by the most granular market segmentation as practical.

You may find that some market segments convert at 20% while others convert at 0.5% and both can be equally effective under the right circumstances. Ultimately you need to measure the value per conversion against the cost per conversion and then multiply that by the number of transactions to find the true value of each segment. Stop fixating on "standard" conversion rates and instead focus on profit potential at a granular level.

SEO Power · 23rd Jul 2014, 01:06 PM

Traffic source, price of product, and sales copy are all factors that can affect conversion rates, not just the stage of the buying cycle the visitor is in. Conversion rates in different industries vary as well, so a 2% general conversion rate is terribly wrong.

Just to give you an example, I usually get 4% to 5% conversion rates on Amazon products sold via Amazon's affiliate program. And I'm not talking about clicks, I'm talking about actual sales.

BudiT · 1st Jan 2015, 08:18 PM

I personally believe that that conversion rate you're referring is the amount of sales made per click to the sales page.

But if you want to look at the entire funnel, then the metric you should look at is average Cost per Acquistion (or leads), and your average Value Per Lead.

Hope that helps!

~ Budi T

Cygnet Infotech · 2nd Feb 2015, 01:58 AM

No, this could be the average conversion rate, not in the buying stage.

savidge4 · 2nd Feb 2015, 02:51 AM

This is my methodology at looking at this. There are 2 numbers that need to be looked at. #1 total number of incoming traffic. How many visitors did your site have ( Unique and Repeat ) #2 how many times did your site kick out the "Thank You" page. meaning how many sales did you make. In my eyes, that is how to determine a sites overall conversion percentage.

As stated in the OP there are different stages in the buying cycle. I break it down into 3 stages; Information gathering, comparison, and buying.

Looking beyond your basic squeeze page sales format, where you are focusing on the buyer phase, and looking more at a commerce based model where these 3 phases are represented better I have found that looking at data in the likes of Analytics only gives you so much of the picture.

Its obviously a goal to get a great number of uniques visitors across any offer you are making. But,the number I personally pay closer attention to ( again with the product / service commerce based model ) is the Repeat customers. I find that in order to really see what these people are doing you have to look at the actual site data logs, and decipher that data a bit.

Once you can break down that data, you will have a better idea of how a user is using the information you provide. first stop in might be for information, next step may be a broader scope of information. then the next visit, you will see a narrowing of page selections - they are clearly comparing, and then finally you will see the b-line to purchase.

I personally use this data in a bunch of ways. but to see that there is a great amount of interest in a product on your site. With a initial and maybe second visit, and the over all product conversion is falling short, I start to look at what the friction is. or is there a need for further information. Or is the pricing off.. is the USP not hitting the mark.

The absolute wonder of working in the online space is the amount of data that is and can be available to us, to better succeed for ourselves and our clients. Its simply a matter of knowing what data is where and how to understand what that data is telling you.

14th Jul 2014, 04:15 AM	#2
NK Advanced Warrior War Room Member Join Date: 2007 Location: Cat City Posts: 515 Thanks: 35 Thanked 100 Times in 84 Posts	Re: Conversion rate on different buying stages Share on: I would think it really depends on a few factors such as the product, market and traffic. This is one of the reasons why you should always try to aim for a product that solves a particular problem, and then channel traffic that is looking for the solution you have. You can promote the same product twice - one with highly targeted traffic and the other a much broader traffic and you will see a huge difference in conversion rates. So the answer is no, the conversion rate is different. The industry standard really depends on the industry, even then it should always be used as a guideline. You don't stop optimizing just because you've hit the industry standard. It's something you keep working on until you feel that it's enough.
	[SIGPIC][/SIGPIC] Affiliate Link Cloaking & Tracking Software - The most powerful tool available for affiliate marketers who are sick and tired of making way too little money!

14th Jul 2014, 11:12 AM	#3
dburk VIP Warrior Join Date: 2005 Location: Tampa, Florida Posts: 6,367 Thanks: 333 Thanked 1,621 Times in 1,287 Posts	Re: Conversion rate on different buying stages Share on: Hi chewie49, Are you sing the word "standard" in place of "average"? Of course targeting different stages of the buying cycle will result in a variance on direct response conversion rates. In fact the goals are often different for each of these stages. Targeting the upper section of the purchase funnel is often considered educational marketing, or brand marketing. While targeting the lower section of the purchase funnel is generally referred to as response marketing. The goals are different for each of these types of campaigns, but they are all share the goal of improving conversions in the long run. With educational and branding campaigns you are targeting prospect at an earlier stage and therefore the conversions often occur at a later date, so trying to measure them in the same way you measure direct response campaigns is likely to lead to invalid conclusions. I think another thing that you are not considering in your question is market segmentation. There are many ways to segment your marketing other than just by "buying stages", and each market segment will have it's own unique conversion rate. It really does not serve much purpose to fixate on any "standard", or overall average conversion rate. You need to test and determine conversion rates by the most granular market segmentation as practical. You may find that some market segments convert at 20% while others convert at 0.5% and both can be equally effective under the right circumstances. Ultimately you need to measure the value per conversion against the cost per conversion and then multiply that by the number of transactions to find the true value of each segment. Stop fixating on "standard" conversion rates and instead focus on profit potential at a granular level.
	* Get Results - Outsource Your PPC Management \| * Don Burk Advertising & Marketing - www.donburk.com

23rd Jul 2014, 01:06 PM	#4
SEO Power Senior Warrior Member Join Date: 2014 Location: Houston, TX Posts: 1,616 Thanks: 16 Thanked 248 Times in 230 Posts	Re: Conversion rate on different buying stages Share on: Traffic source, price of product, and sales copy are all factors that can affect conversion rates, not just the stage of the buying cycle the visitor is in. Conversion rates in different industries vary as well, so a 2% general conversion rate is terribly wrong. Just to give you an example, I usually get 4% to 5% conversion rates on Amazon products sold via Amazon's affiliate program. And I'm not talking about clicks, I'm talking about actual sales.
	ONE HOUR INDEXING - STOP WASTING MONEY ON LINKS GOOGLE NEVER FINDS

1st Jan 2015, 08:18 PM	#5
BudiT Overdriven Warrior Join Date: 2014 Location: Singapore Posts: 138 Thanks: 80 Thanked 51 Times in 39 Posts	Re: Conversion rate on different buying stages Share on: I personally believe that that conversion rate you're referring is the amount of sales made per click to the sales page. But if you want to look at the entire funnel, then the metric you should look at is average Cost per Acquistion (or leads), and your average Value Per Lead. Hope that helps! *~ Budi T*

2nd Feb 2015, 01:58 AM	#6
Cygnet Infotech Warrior Member Join Date: 2014 Location: Paramus, USA Posts: 28 Thanks: 0 Thanked 4 Times in 3 Posts	Re: Conversion rate on different buying stages Share on: No, this could be the average conversion rate, not in the buying stage.
	Twitter LinkedIn Website

14th Jul 2014, 03:45 AM	#1
chewie49 HyperActive Warrior Join Date: 2008 Location: New Zealand Posts: 300 Thanks: 9 Thanked 6 Times in 6 Posts	Conversion rate on different buying stages Share on: Hello, In some industries, a 2% buying conversion rate is the Standard. But we know, customers have different buying stages (recognition of a problem; Research; evaluation; purchase decision; post-behavior). Each stage has a different conversion rate. So my question is: Is the standard conversion rate of 2% in GENERAL of ALL buying stages? OR only for those people in the evaluation stage? We all know that 2 visitors out of 100 will NOT buy. That's not true. Not even 1 out of 500 will buy, so I guess the 2% rate is ONLY for those people in the "ready-to-buy" stage, Am I right? What do you think?

2nd Feb 2015, 02:51 AM	#7
savidge4 Midnight Oil Warrior Join Date: 2013 Location: Bridgeport, WV. Posts: 6,747 Thanks: 3,544 Thanked 6,537 Times in 3,469 Posts	Re: Conversion rate on different buying stages Share on: This is my methodology at looking at this. There are 2 numbers that need to be looked at. #1 total number of incoming traffic. How many visitors did your site have ( Unique and Repeat ) #2 how many times did your site kick out the "Thank You" page. meaning how many sales did you make. In my eyes, that is how to determine a sites overall conversion percentage. As stated in the OP there are different stages in the buying cycle. I break it down into 3 stages; Information gathering, comparison, and buying. Looking beyond your basic squeeze page sales format, where you are focusing on the buyer phase, and looking more at a commerce based model where these 3 phases are represented better I have found that looking at data in the likes of Analytics only gives you so much of the picture. Its obviously a goal to get a great number of uniques visitors across any offer you are making. But,the number I personally pay closer attention to ( again with the product / service commerce based model ) is the Repeat customers. I find that in order to really see what these people are doing you have to look at the actual site data logs, and decipher that data a bit. Once you can break down that data, you will have a better idea of how a user is using the information you provide. first stop in might be for information, next step may be a broader scope of information. then the next visit, you will see a narrowing of page selections - they are clearly comparing, and then finally you will see the b-line to purchase. I personally use this data in a bunch of ways. but to see that there is a great amount of interest in a product on your site. With a initial and maybe second visit, and the over all product conversion is falling short, I start to look at what the friction is. or is there a need for further information. Or is the pricing off.. is the USP not hitting the mark. The absolute wonder of working in the online space is the amount of data that is and can be available to us, to better succeed for ourselves and our clients. Its simply a matter of knowing what data is where and how to understand what that data is telling you.
	Success is an ACT not an idea