How Do I Know If My Conversion Rate Is Good?

Conversion rates (CVRs) are a vital metric that help describe the overall success of your eCommerce site. 

Your conversion rate is the percentage of overall visitors that become customers. So, for example, if 10 out of 100 visitors become customers, you’ll have a 10% conversion rate.

So what makes a good website conversion rate? It’s tempting to look at the overall eCommerce average to determine what’s good and what needs work. However, simply looking at the average isn’t enough.

Studies show that the average conversion rate for eCommerce in the United States is 2.3% — across every industry. However, not every industry has the same motivation factors, price points, and other variables influencing conversion rates.

Instead, we always advise benchmarking your conversion rate against others in your industry to help determine if you’re ahead of the pack, falling behind, or right on the average. Keep reading to learn how to truly understand if you have a good conversion rate.

What is a Good Conversion Rate?

Your site conversion rate is one of your essential eCommerce benchmarks to track, analyze, and improve. So first, let’s touch on how you calculate your conversion rate, then dive into the various factors that indicate if your CVR is considered good or needs improvement.

A brief overview of the conversion rate formula

The conversion rate formula produces a percentage describing how many visitors are becoming customers. This formula can also be applied to any event you consider a conversion, such as subscribing to your newsletter.

The CVR formula is:

Conversion Rate = Total number of sales / Total number of sessions * 100

Both ‘sales’ and ‘sessions’ can be modified to measure specific goals, such as ‘leads’ and ‘unique visitors,’ respectively.

Once you understand your CVR, you can start looking at benchmarks to discover how you compare.

Key Factors Influencing Conversion Rates

Comparing your conversion rate to the overall average of another industry is not an accurate way to benchmark your successes. Instead, you need to consider a variety of variables that impact how likely a visitor is to become a customer.

Let’s examine critical factors to help you understand if your conversion rate is adequate or falling behind.

Industry significantly influences CVRs

A recent digital trends report analyzed several aspects of eCommerce in 2022, including conversion rate. The report demonstrates eCommerce conversion rate benchmarks broken down by industry, which are:

• Grocery: 6.8%
• Pharmaceuticals: 6.8%
• Health and beauty: 3.9%
• Travel and hospitality: 3.9%
• Fashion: 3.3%
• Home goods and furnishing: 2.8%
• Consumer electronics: 1.4%
• Luxury: 1.1%
• Automotive: 0.7%
• B2B: 0.6%

This significant range demonstrates why we always advise looking to your peers instead of everyone in eCommerce. Benchmarking against your peers is much more accurate than benchmarking a luxury brand against a grocery store.

Varos focuses on using relevant data to help you understand how you compare. The Varos dashboard shows you the median CVR for your industry against your own, with all metrics updated regularly. We make it easy for you to always understand how you stack up.

The region also impacts CVRs

The location of your customers also impacts your conversion rates. Economic conditions and what’s popular within the region significantly affect whether a visitor will convert.

A 2022 report exploring the world of eCommerce analyzed how conversion rates differ across different regions. The average conversion rate by region is: 

• Great Britain: 4.1%
• United States: 2.3%
• Europe, Middle East, and Africa (EMEA): 1.6%
• Other: 1.2%

Platform and campaign type also significantly impact your CVR

The varying success of platforms and specific campaigns also demonstrate why you need specific benchmarks to understand how well you’re doing. 

Our dashboard shows how each platform will create different conversion rates. While the 0.2% range in our example might not seem like a big issue, it becomes significant when applied to thousands of visitors per day.

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We can even drill down deeper and look at specific marketing campaigns for each platform. For example, Google Search gives us a 4.4% CVR, while Facebook Prospecting results in 2.2%.

Knowing how specific campaigns compare against other similar campaigns within your industry is essential. Otherwise, you might be comparing organic search CVRs to Google Shopping CVRs — two inherently different types of visitors reaching your site.

Is Your Conversion Rate Considered Good?

Everything we covered above demonstrates one thing: even broadly comparing to your own industry isn’t enough data. It’s certainly an improvement on looking at the overall eCommerce CVR, but the more specific you can get, the better you can understand if your CVR is considered ‘good.’

You also need to consider a few other factors beyond the data, to help determine if your CVR is considered good, needs work, or leads the pack.

Keep Price Points and Products in Mind

Consider the unique attributes of what you’re selling. Industry-specific conversion rate benchmarks are excellent general benchmarks, but they don’t convey the entire picture.

Every industry will offer a wide range of products within it. For example, consumer electronics include high-priced smartphones and budget fitness trackers. So try to hone in on a specific benchmark for what you sell within your industry.

Price points are a significant factor that influences conversion rates. For example, if you’re offering the same types of products as your competitors, but they’re of higher quality, you’ll probably charge more than the rest. As a result, you may have a lower CVR, but your Average Order Value will likely be higher.

Consider your past results

Benchmarks help set a long-term goal to strive towards but don’t forget your past conversion rates. For example, if your conversion rate is improving, you can still consider your current rate a reasonable conversion rate. 

Ultimately, a good conversion rate for eCommerce improves on past results. So keep trying to reach the high end of your industry, but recognize when you’re still improving.

How to Improve Your Conversion Rate

Your CVR isn’t static — you can make tactful changes to improve conversions in the short term and for the life of your business. Let’s explore some of the most impactful changes you can make to improve your CVR.

Add Reviews and Testimonials

Social proof is a powerful way to improve your conversion rates. You might already have reviews on Amazon, TrustPilot, or Google Maps you can directly integrate with your site. 

Additionally, integrate reviews directly into your site. Give customers the opportunity to leave reviews, and don’t filter out the negative ones. Honesty and transparency is a big reason why social proof is so powerful.

You can solicit reviews once a customer has received their order with a thank you email that directs to your chosen review site (or your site). Prominently display reviews on product pages, landing pages, and your homepage, so visitors learn from past customers’ experiences.

Add or Refine Calls-to-Action (CTAs)

A call-to-action (CTA) is a specific element of a landing page, product page, or any other area of your site that prompts the user to do something. You may already have CTAs throughout your eCommerce site, such as ‘sign up.’ However, there may be room for improvement. 

Try more actionable or positive verbiage for your CTA buttons and links. A few examples are:

• For an email opt-in, replace ‘sign up’ with ‘yes, I want to learn more’
• For a product page, add a second ‘buy now’ button that goes directly to the checkout page, rather than the usual ‘add to cart’

Experiment with different CTA verbiage, button placement, and colors with A/B testing to learn which options motivate purchases. Improving your Add to Cart rate involves these factors that directly influence conversion rates.

Remove Any Distractions

Everything you display on landing pages and product pages should be carefully evaluated. Is it distracting? Or does it motivate purchases?

You can help answer that question by conducting A/B tests. Send half of your traffic to a page with a welcome bar promoting a sale, then the other half to a version without it. Does taking up visual real estate help?

Additionally, visitors expect simplicity and don’t want option overload. Therefore, streamline tier-based offers, minimize options to popular choices, and simplify category pages. 

Distractions create friction, which is a big reason people will simply leave your site. Look for ways to remove any distractions for your site and carefully test results.

Leverage Varos to Discover if Your CVR is Underperforming

We’ve explored the various factors that influence conversion rates and how they should each be considered when evaluating your conversion rate. Don’t make the classic mistake of comparing apples to oranges, compare yourself to your peers.

Varos gives you the complete picture of vital eCommerce metrics. You’ll see how others in your industry are doing, your own results, and comparisons over time. From there, you can make strategic improvements to catch up — then pull ahead.

Ready to see how Varos can give you a competitive advantage? Book a demo with one of our eCommerce experts today to learn more.

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About the Author

Yarden Shaked

Co-founder & CEO at Varos

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