The question often posed doesn’t have a one-size-fits-all answer. Essentially, a commendable or “good” conversion rate for your site is one that’s higher (better) than your previous rate. But most importantly it’s all relative.

Several factors influence conversion rates that aren’t always within the purview of user-experience designers:

  1. Brand Reputation: A well-regarded brand will naturally see higher conversions than one with a negative image, even if all other variables remain the same.
  2. Pricing: Generally, more affordable items sell easier than pricier ones. An easy way to boost conversion rate? Host a sale.
  3. Sales Complexity: Impulse purchase items typically have higher conversion rates compared to intricate services that need extensive research and committee approvals before finalizing a purchase.
  4. Commitment Level: Users are more inclined to read five free articles on a site than sign up for an email newsletter. The lesser the perceived commitment, the higher the likelihood of conversion. So, an action like “read 5 articles” will usually outperform “subscribe to newsletter” on the same platform.

Circa 2000, during the dot-com bubble, the average conversion rates for e-commerce sites hovered near 1%. By 2013, this figure had risen to about 3%. This shift demonstrates that expected conversion rates can evolve as users grow more at ease with performing the intended actions on a site. And, in 2022 that average dropped down to 2.3% (1)

Conversion vs. Usability Study Metrics

A typical conversion rate generally falls between 1% and 10%, depending on what you’re tracking. Yet, in usability studies, success rates often hit around 80%. Why such a significant discrepancy?

The answer lies in the nature of the study: In usability tests, users are instructed to complete a task, so the metric is based on the feasibility of them doing it. Even if an item is expensive, participants will “purchase” during a mock test as they’re acting according to the given scenario. Hence, an 80% success rate implies that 20% of users can’t navigate the site effectively. However, it doesn’t translate to 80% of the visitors becoming paying customers.

To provide a clearer perspective, think of a website with a 4% conversion rate and an 80% success rate in usability tests. By addressing the usability challenges that deter 20% of potential users, the site’s conversion rate could potentially rise to 5%.

Should You Optimize Your Conversion Rate?

The answer? It depends. Of course you want to say “yes!” of course we all want to improve our conversion rates. And it’s honestly relative to the “what” and “where” of what you’re considering to optimize. Sometimes it costs so much to increase conversions past a certain point that it’s not worth doing.

Let’s consider the role of price as a singular element in your prospective experiment. The change in the number of purchases as you adjust the price depends on the price elasticity of the customers:

  • High price elasticity indicates that a majority of customers will convert primarily at extremely low prices.
  • Low price elasticity suggests that a significant number of customers will still convert even if the prices are considerably higher.

Imagine you hike the price by 10%. If sales decline by 10%, your total revenue remains unaffected. However, for customers with high price elasticity, a 10% price increase might cause a 20% fall in sales, leading to reduced revenue. On the other hand, for those with low elasticity, sales might drop by only 5%, resulting in an increase in revenue.

For those customers with low price elasticity, you might see greater profitability by embracing a slight drop in conversion rate that comes with a significant price hike.

Conversion Rate and User Experience

Always keep an eye on conversion rates, especially when making design tweaks. It helps show that the money spent on the user experience is worth it. Sure, there’s a bunch of stuff outside of design that can affect conversions, but trust me, the design itself? Super influential.

Imagine that you’re designing/redesigning a sign-up form for your site. In the past you’ve learned that by simplifying the form more customers will actually complete it.

Now consider that if you take out one question from a form, more folks will finish it, which could lead to a better conversion rate. Out in the wild, every extra question on a form is there because someone thought it’d be neat to grab that extra bit of info. If you’re just gonna say, “Hey, people hate long forms, duh,” you might not get too far in that argument. You should never just assume — try running an A/B test with both the short and long versions. See which one does better. Those numbers will show you the cost of that sneaky extra question. Plus, running an experiment is aways better than just assuming.

Sample Conversion Rate calculation:
The conversion rate for the original form is 20%, and removing one question changes the conversion rate to 21%.
The baseline number of users who get to that form is 200,000 people per year.
Removing the question causes 2,000 more people to complete the form.
If the average business value of each completion is $15, then asking that extra question costs the company $70,000 per year.