October 09, 2006

Online Conversion Rates: What Is Average?

Last week's post on homepage design influencing net sales is easily the most popular post I have written. Though the post has generally been well received, some of you want to understand how conversion rates can be benchmarked within the "selling", "hybrid" and "branding" classifications.

So, I built a regression model to illustrate what an "average" conversion rate is for a given average order size, and monthly traffic estimate. The results of the model are outlined in this spreadsheet. Please feel free to download the spreadsheet and share it.

Let's talk about the "hybrid" portion of the table, and some of the things the model indicates. Similar conclusions can be drawn in the "selling" and "branding" tables.
  • Sites with large average order sizes typically have lower conversion rates. As items become more expensive, fewer customers are likely to purchase them.
  • Sites with above-average monthly visitor counts have lower conversion rates. Each incremental visitor is less and less likely to convert to a purchaser.
The estimates can be used as a benchmark for your business to understand, at a 30,000 foot level, how conversion rates change by average order size, average monthly traffic, and homepage creative/merchandising strategy.

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