What Does 1% Conversion Really Mean?

by Steven Wagenheim 16 replies
A lot of people just starting out think that 1% conversion means that if they
have a list of 100 people and send an email to them, they should make 1 sale.

Well, yes and no.

For one thing, conversion rates are based on averages and averages are not
steady over time.

You may have a 1% conversion for your product over the course of a year
but you may have one mailing that converts at 3% while another one
converts at a 0.5%. Not every mailing is going to be the same results.

Not every day is going to be the same results.

I track one campaign now for over 5 years, and my overall conversion
rates is one sale for every 45.54 clicks, which is a little better than 2%.

And yet, I have gone as many as 500 clicks for that campaign without
getting ONE sale. And then I have days where I get 3 sales in 50 clicks.

So please don't think that 1% means 1% everyday. It doesn't.
#main internet marketing discussion forum #conversion
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  • Profile picture of the author Coreyg319
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    • Profile picture of the author Andyhenry
      What made you say this?

      I can't imagine why anyone would make such assumptions.
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      • Profile picture of the author Michael Lee
        You're right, Steven.

        In addition to what you said, different promotional methods produce different conversion rates.

        I wrote a sales copy for a client that produced a less than 1% conversion rate when he used adwords. I promoted the same sales copy to my own list and it converted at more than 4%! The reason is because ppc is cold traffic, in contrast to my list to whom I already have built good relationships with.

        Cheers,
        Michael
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      • Profile picture of the author Steven Wagenheim
        Originally Posted by Andyhenry View Post

        What made you say this?

        I can't imagine why anyone would make such assumptions.
        What made me say this? Because there ARE people who think this way. I
        run into them every day of the week.

        Look at a recent post right here from somebody who sent an email out
        to 68 people and can't imagine why he doesn't have one sale from it.

        This thinking is more common than you realize. And just because you don't
        think this way doesn't mean other don't.

        Again, I run into these folks everyday.
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        • Profile picture of the author Andyhenry
          Originally Posted by Steven Wagenheim View Post


          Again, I run into these folks everyday.
          You should get find new places to get out to
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          • Profile picture of the author Steven Wagenheim
            Originally Posted by Andyhenry View Post

            You should get find new places to get out to

            Andy, it's my market. These are the people I target to try to help, the '
            absolute total beginner. So why should I find new places to get out to when
            these people are responsible for most of my income?

            Wouldn't that be a terribly bad business decision?
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            • Profile picture of the author patfl
              Originally Posted by Steven Wagenheim View Post

              Andy, it's my market. These are the people I target to try to help, the '
              absolute total beginner. So why should I find new places to get out to when
              these people are responsible for most of my income?

              Wouldn't that be a terribly bad business decision?
              I'm sure that not only total beginner needed that question asked and answered...

              Many times this number has little or nothing to do with any real facts.
              It's statistics: on a short period number may vary but on a year period or so of data, it will be 1%.

              Unless of course the conversion rate given has been calculated over a small period of time, in that case, it's just a false/inflated conversion rate (CB products for example).

              Patrice
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              • Profile picture of the author Michael Dominic
                Excellent post Steve. People will learn from it.

                In my opinion, you can determine your conversion rate only after you receive a massive number of hits. It might take you one day or one year, it all depends on getting the hits.

                I usually come to a determination of what my conversion rate is after about 15 days. In these 15 days I would have thousands of click throughs.

                If I think the conversion rate is too low, I will try to make it better, obviousy. Even if I think it's a decent conversion rate, I'll come up with some figure in my head that's better...
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                • Profile picture of the author Mr.P
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                  • Profile picture of the author Barry Walls
                    Im not sure why this is useful. There will always be a "lumpy" return on anything like IM. The more useful thing to measure is the standard deviation of your results over xN clicks.
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                • Profile picture of the author Andy
                  Hi Steven,

                  You're right again. There are so many factors to figure into conversion rates.

                  It's been said there's three types of lies: white lies, damn lies and statistics. Well, yeah...

                  To me, unless one takes the source and quality of traffic into account, there's not much sense in talking about a conversion rate at all.

                  For my own purposes, I see conversion rates as a benchmark. If the traffic is identifiable and stable, then one can focus on improving it. The rate itself is not so important - it's just a measurement.

                  So what does a 1% conversion rate really mean? All by itself... nothing. It depends on the context.

                  God bless,

                  Andy
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            • Profile picture of the author Andyhenry
              Originally Posted by Steven Wagenheim View Post

              Andy, it's my market. These are the people I target to try to help, the '
              absolute total beginner. So why should I find new places to get out to when
              these people are responsible for most of my income?

              Wouldn't that be a terribly bad business decision?
              Apologies - I didn't realise your business was training newbies. For some reason with all the times you've mentioned article marketing, safelists etc. it never actually occured to me that the successful business you've been refering to was telling newbies how to do IM basics. I suppose it should've been obvious but it never occured to me. That explains a lot though.

              You're right though - I do forget that there are people who would make something like what does 1% conversion rate mean into a complicated subject to discuss - I usually try and make everything as simple as possible so I wouldn't give this much thought.

              Lucky for us you're around to cover these bases.

              Andy
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              • Profile picture of the author Steven Wagenheim
                Originally Posted by Andyhenry View Post

                Apologies - I didn't realise your business was training newbies. For some reason with all the times you've mentioned article marketing, safelists etc. it never actually occured to me that the successful business you've been refering to was telling newbies how to do IM basics. I suppose it should've been obvious but it never occured to me. That explains a lot though.

                You're right though - I do forget that there are people who would make something like what does 1% conversion rate mean into a complicated subject to discuss - I usually try and make everything as simple as possible so I wouldn't give this much thought.

                Lucky for us you're around to cover these bases.

                Andy
                In 1991, the first DOS For Dummies book came out, which was the first
                in a long line of books targeted to people who didn't know beans about
                the subject matter.

                These books have sold millions of copies.

                Had this publisher not catered to these people, this is money that would
                not have been made.

                So while I may not live up in the ivory tower with the likes of John Reese,
                Frank Kern and others, I offer a valid service to people.

                I don't expect others to come down into the slums with me.

                I only expect that they recognize they exist.
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                • Profile picture of the author Chipt
                  Hey, Steve -

                  I always enjoy reading your posts because you tell it like it is as you understand it. That is very valuable IMO...

                  Seems to me your understanding is pretty darn good, too.

                  Keep on Rockin' -

                  Chip Tarver
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                  • Profile picture of the author Tony Markx
                    Rock On Steve,

                    Great comments & tips that are always helpful, thought provoking and meaty ;-)

                    Keep 'em coming Buddy

                    Cheers To You
                    Tony Markx.

                    P.S You actually probably help a lot of people and don't know it Steve ! I'm one of them ;-)
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                    • Profile picture of the author VegasVince
                      Any conversion rate is based on a number of intangibles.

                      Consider 3 different marketers rolling out the SAME offer to their respective lists. The factors that would tweak the conversion rate would be......

                      1. The credibility of the promoter.

                      Steve Waggs was an actor who starred in the hit movie King of New York. He's still recognized on the streets for that role. He is a respected Warrior years after the fact...who dishes quality stuff.

                      Wagg's is going to tweak the number just by that alone....and do better then say....Joe Blow who just left his job sweeping up the local bingo hall, capiche?


                      2. The quality of the list..

                      Is it made up of proven buyers? Or is it a list of mooches, strokes, and freebie seekers? Cuz there's a big difference.

                      3. The product:

                      Even Frank Kern isn't going to have much success selling igloos to eskimo's and why would he bother?


                      I do NOT believe that the sample is as important as some others believe.

                      I am pretty sure that some of you could have mailed Kern's offer to a list of 68 of your best buyers....and would have kicked ass!

                      Some of Kern's best affilliates like Moffatt have lists that are so small people are amazed he can pay his bills. But it's a quality list, backed with Mo's credibility, and he's always pitching good stuff. There ya go.



                      xxx Vegas Vince

                      The Vegas Vince Diary
                      Living Life and Marketing Behind the 8-Ball
                      November 2008
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                • Profile picture of the author Andyhenry
                  Originally Posted by Steven Wagenheim View Post


                  So while I may not live up in the ivory tower with the likes of John Reese,
                  Frank Kern and others, I offer a valid service to people.

                  I don't expect others to come down into the slums with me.

                  I only expect that they recognize they exist.
                  Haha,

                  Ivory Towers..... Slums....... Isn't that a bit dramatic?

                  We all know there's a market there. I have friends who've been making a living selling to it since before I made my first product.

                  Joe Robson (you remember Joe? he wrote the copy for the Site Built It Guide) is the nicest guy you could meet and has been helping complete newbies since 2000 over at The Newbieclub.


                  So I'm sorry if I was disrupting your flow. Now that I know where you're coming from I'll just leave you to it.

                  Apologies.

                  Andy
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      • Profile picture of the author eprenuer
        Banned
        there's no yes and no about it, it means for every 100 people you bring in, 1 person should convert
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  • Profile picture of the author Chipt
    Originally Posted by Steven Wagenheim View Post

    A lot of people just starting out think that 1% conversion means that if they
    have a list of 100 people and send an email to them, they should make 1 sale.

    Well, yes and no.

    For one thing, conversion rates are based on averages and averages are not
    steady over time.

    You may have a 1% conversion for your product over the course of a year
    but you may have one mailing that converts at 3% while another one
    converts at a 0.5%. Not every mailing is going to be the same results.

    Not every day is going to be the same results.

    I track one campaign now for over 5 years, and my overall conversion
    rates is one sale for every 45.54 clicks, which is a little better than 2%.

    And yet, I have gone as many as 500 clicks for that campaign without
    getting ONE sale. And then I have days where I get 3 sales in 50 clicks.

    So please don't think that 1% means 1% everyday. It doesn't.


    Good points, Steve -


    In my experience, some people who don't have a clue how to really compute accurate metrics do it all wrong, therefore publicizing erroneous figures many times, too...
    • People confuse and comingle traffic metrics and sales metrics.
    • To one person, 'exposures' means one thing and to another person something else.
    • Some people like to compute metrics based on 'visitors' because it makes their numbers look better [it's based on a smaller population sample.]
    Any way - this is not a dissertation on metrics, with which I am extremely familiar. Just making a point that people usually use the numbers in their metrics that make the outcome the most favorable for themselves.

    Many times this number has little or nothing to do with any real facts.

    Chip Tarver
    Signature

    Improve your online success permanently right now. Joint Venture Masters tell you the real insider info. Save $450 right now by checking out my *limited time* FCS WSO and change your JV success in a radical way permanently at http://www.warriorforum.com/forum/to...OPIC_ID=264511... and for less than $20 you can really save up to half your gasoline costs at www.CutYourGasCostsNow.com.

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  • Profile picture of the author Jelasco
    Originally Posted by Steven Wagenheim View Post

    A lot of people just starting out think that 1% conversion means that if they
    have a list of 100 people and send an email to them, they should make 1 sale.
    No- that would require everyone on the list to open the email and click the link, which is not going to happen.

    You need to know how many saw the offer to calculate conversion.
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    • Profile picture of the author patfl
      Originally Posted by Jelasco View Post

      No- that would require everyone on the list to open the email and click the link, which is not going to happen.

      You need to know how many saw the offer to calculate conversion.
      In that case you calculate the conversion based on the click?

      For example:

      a list of 100 subscribers, 10 click the link, 1 person buy => conversion = 10%

      Is it what you mean Jelasco?

      Patrice
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    • Profile picture of the author Ernie Lo
      Good post Steve. You always tell it like it is and provide this forum with real life stats.

      and Jelasco very important point you mentioned here. I think this is where most newbies get confused, because %'s based on what you have just said, that can inflate the conversion figure and then newbies go ahead and think they will get a conversation rate of 10-20% when half their list isn't even opening their emails...





      Originally Posted by Jelasco View Post

      No- that would require everyone on the list to open the email and click the link, which is not going to happen.

      You need to know how many saw the offer to calculate conversion.
      {{ DiscussionBoard.errors[30757].message }}
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