I recently heard the following statistics:
A normal retail store converts 2% of its foot traffic.
An online store converts 3-5% of its visitors.

Does anyone have stats on their conversion ratios? Any ideas on how I can figure out my conversion ratio?

Guppy,

I think much depends on the quality of your storefront and the products you sell... ie high ticket items versus low ticket items.

Assuming your storefront is clean, you will convert more online than a physical retail store. I think your stas are corrct.

That sounds about right, anyone seen any hard statistics on this one?
I think payment options help to, someone started another post about that already

The figures I have always seen used for online and mail/phone order merchants is 3-5% given that you have an agreeable presentation.

I would have to agree that if you're doing 4-5% conversion than you are doing well. But, you should always strive for more than 5%, work up your store front, look at competitors, "upgrade" your company at least once a year (that means make some changes either with your products, store design, or anything!), and most importantly push your search engine positions (be #1).
Our company I believe is running about 5% conversion, but its hard to get an exact number because we have a lot of return customers and its hard to guage how many people are brand new.
I wish you good luck, its a rough business world and only the strong and lucky survive.

5% is a great percentage! Great work.

A dumb question...What is meant by "conversion rate"? Is this the percentage of people who become regular customers or the percentage of hits who make a purchase?

Conversion Rate is how many first time customers actually make a purchase. Unless you have a really good tracking program its hard to know exactly what your rate could be. But if you use the tracking software provides and pay attention to it, you should be able to figure out what your percentage is +-1%.
0-1% - Your barely making it by, maybe a revision of your company and its advertising is in need.
2-3% - Your doing good, but you should strive for a higher number. Do some research into who is visiting your site. Example: I sell Buckles (Cam Buckles, not Belt Buckles), but search engines send me a lot of Belt Buckle customers who realize I don't sell what they want and leave. This lowers my conversion rate and I must refine my search engine keywords to get the customers I want.
4-5% - Your doing very good, you have a good strategy. Your company should be growing and should allow you to improve/diversify your advertising. With a better advertising program and more avenues of reaching your customers you will continue to grow (until you retire )

Strapworks...

You are right on the money... excellent breakdown. Thanks for the feedback.

2% conversion of walk in store front traffic would be horrible. I think most big ticket are 30% roughly. Most big ticket salespeople try and be around 50%.

On line I think is 2% - 5% with 5% being outstanding. Of course, it depends on what your selling.

So do you divide sales by visitors or what?

Exactly, 1 sale per 100 visitors would be a 1% conversion.

I ran an online poll on this question earlier this month. It was not as specific as to break out return buyers -vs- new buyers as Strapworks was discussing. Not many responses, but a start.

Original poll at http://forums.monstersmallbusiness.com/ind...t=0&#entry26835

Our sales have gone down alot since after Christmas, is there usually a lull the first part of the year? or what happened, our conversion rate has dropped alot..what do we do?? Thanks

sorry double post

If you have urchin, you can take your avg. sessions as customers and avg sales per day and get an idea of closing ratio.

It'd be nice though if MC had a way to track any customer from entering the site to leaving and spitting out a stat that should conversion rate.

That is such an important figure.

I am not sure if anyone should dwell over "Conversion Rates" though.
Are you making money? Than you are doing good on your website.
Are you losing money? Than you are doing bad on your website.
Think about it this way, I could be converting 100%, but that could really mean I am only selling to 1 person a month and that was the only person who visited my site. So, you really can't depend on Conversion Rates to tell you how good you are doing.
Put more time and effort into getting the word out about your company rather than sitting at the computer worrying about how you are keeping up with the average.
Nothing does more for your business than Customer Service, NEVER sacrifice your customer service because you have to work on PPC. Answer emails within 24 hours, send thank you emails to your customers, give them specials and deals on returning to your site, give them incentives to spread the word about you, give them a reason to believe that you are the best person they know so even if they are spending more with you they think its worth it because they like you.
Remember this - Sometimes its more important to make a customer for life than to make a buck.
Just my two cents

I hear ya, but conversion rates do help a lot.

1st, if you're not getting traffic, you know why your not making $. You need to work on traffic.

2nd, if you are getting traffic, but they're lookers and not buyers, you have a new problem. Why aren't they buying?

a. Site looks bad?
b. Price?
c. selection
etc.

1st you need people, then you need to sell the people. Lastly, you need to keep bring those people back to buy more and to win them over to start selling for you - telling friends etc.

When all these things are going on you need to make a profit also on the sales as this is not a hobby. Food must be put on the table and bills need paid.

There's a lot of factors. Conversion ratio isn't just it, but it's one of them.

I completely agree.
My big point (which I should have made clearer) is that people should never dwell on them. I have seen to many people work hours trying to figure out why there conversion ratios don't sound quite right, when they should have been working on the site or marketing.
Even if you have great conversion ratios, you should still be working on your site and marketing.
So, yes, conversion ratios can tell you what to work on, but don't spend hours trying to figure that out, if you don't know what the conversion ratio means to you than work on everything, eventually you will know whats important.
Work hard and you will be rewarded. Maybe not today, maybe not tomorrow, but some time in your life your hard work will pay off and that will be the happiest day of your life.

I agree. Hard work is what we need to do. Also, knowing how to work is important. Finding ways to automate daily tasks save hours every day. Finding out how a search engine finds a page means $$$. For instance, you can spend TONS of time adding new products, but if you later find out you weren't buying them at the right price, (low enough) or the pages weren't search friendly etc. that could be wasted time.

I believe in hard work very much. But educated hard work will take you even farther.

Conversion ratio shouldn't be that hard to figure out. 1 out of 10 is 10% closing ratio. If you have 100 sessions a day and sell 1 product you figure 1% closing ratio.

Once your buying a good product at a fair price #1 goal must be getting enough customers. Then close them. Then all the while insure you make a profit and stay alive.

Closing 1 out of 5 is great. But if 5 people is all you get that's terrible. If you close 10 out of 1000 that's a lower closing ratio, but more sales.

So figures can go back and forth. % matter to a degree, but all in all it's profit $. %'s don't pay bills or paychecks.

Hard work is respected and admirable. Educated hard work can be the difference that keeps you in business.

Just my silly 2 cents.

The thought I wanted to get across was that there have been many "hard working" folks go out of business in this and every type of business under the sun. Hard working is great, but working hard and working smart need to be put together.

That's all I'm trying to get across.

The flip side of conversation rate would be to divide your number of sessions by your number of orders. This calculates a clicks to order number (how many clicks does it take to receive an order or every XX clicks I get an order). I find this number really valuable when I make changes on my site. For instance, say you resize all your thumbnails to 100x100 from 80x80. If your clicks to order went down (I use 30 days as a test period), then you could say this change had a positive impact on your sales. Using conversation rate to measure this is tough. Your rate might go from .01225 to .01545. It just isn't as blatantly obvious.

This may help for the question of the conversion rate for a normal retail store. Our conversion rate is approx 70%. We sell floor covering and installation. I have spoken with some of our competitors, and they are saying they get a 40-50% conversion. Maybe we are lucky?! As for our online business, a lot lower than that. Less than 1 percent.


Pat