February 3, 2010

Email Marketing: What's a Good Conversion Rate?


Hostway Team

By Melissa J Luther

When measuring the effectiveness of your email marketing campaign, the bottom line is whether or not your recipients heeded your call to action. Conversion rates translate into revenue, so you want yours to be as high as possible. Are those low-single digit numbers you keep hearing about really the best you can do?


Like email open rates, conversion rates can vary wildly between industries and companies, and even between different offers from the same company.

What is Your Conversion?

You first have to define your conversion. A conversion can be anything you want. Some examples could be:

  • A click-through to find more information
  • A free download
  • A purchase

Conversion rates for the free offers are likely to be higher than for a purchase, possibly even double-digit. Similarly, a high-priced item will naturally convert at a lower rate than a low-priced item.

What Is a Realistic Conversion Rate?

Most experts agree that 1 percent to 5 percent is a realistic conversion goal, but looking at the numbers in a vacuum can be misleading. You want to consider how the conversion rate translates into return on investment (ROI). For example, if you have two offers, with one converting at 2.5 percent and the other at 1 percent, you might assume that the 2.5 percent conversion is the better performer.

If you then look at the average order value for the offers, you may see that the one converting at 2.5 percent is only $50, while the one converting at 1 percent is $250. Now the 1 percent conversion has the higher ROI, and in the end ROI is really the best measure of success of a campaign.

Of course, it’s harder to measure ROI of free information. These campaigns are more about getting noticed, but you can still note whether there was increased interest in the product or topic of the campaign in the weeks immediately following it.

Like open rates, conversion rates are most valuable when compared to your own data over time. If a particular type of offer does not convert well for you, either drop it or test it to see if you can improve conversions. If your conversion rates for similar types of offers start dropping, try to find out what has changed, either with the product or in your customer's minds.

The most important metric is not the absolute numbers, but rather how those numbers translate into profitability for your business. Statistics like conversion rate just help you to evaluate ROI.

About the Author

Melissa J Luther, owner and founder of LookSee Information Solutions, LLC helps small businesses create and maintain a strong online presence. She takes a multi-channel approach, with a well-optimized Web site as the center of an online presence that includes content creation, PPC advertising, linking and social media as appropriate.

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