Everything You Know About Conversion Rate Optimization Is Wrong

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Conversion is a key element in your paid search strategy; after all, if you're not actually turning lookers into buyers at a high rate, what are you advertising for? Conversion rate optimization enables you to maximize every cent of your PPC spend by finding that sweet spot that convinces the maximum percentage of your prospects to take action.

But what is a good conversion rate? If you're already achieving 3%, 5% or even 10% conversion rates, is that as high as you're going to go? But what is a good conversion rate? Across industries, the average landing page conversion rate was 2.35%, yet the top 25% are converting at 5.31% or higher. Ideally, you want to break into the top 10% — these are the landing pages with conversion rates of 11.45% or higher.

We recently analyzed thousands of AdWords accounts with a combined $3 billion in annual spend and discovered that some advertisers are converting at rates two or three times the average. Do you want to be average, or do you want your account to perform exponentially better than others in your industry?

Through our analysis of this massive amount of data on landing pages and conversion rates, we were able to identify some common traits of the top converting landing pages. What do they have that you don't? Believe it or not, there isn't much standing between you and conversion rates double or triple what you're seeing today. But the way you’re going to get there is totally counter to typical conversion rate optimization wisdom.

what's a good conversion rate on adwords

In this post, you'll learn a step-by-step, replicable process for boosting your conversion rates, all backed by data insights from the best (and worst) performing advertisers in the market. Our recent conversion rates webinar is available in full at the end of this post. Today, we'll cover:

Are you ready to find out why everything you thought you know about CRO is wrong?

Let's get started, but first, use this tool to get a quick temperature check on your current conversion rate: Is your conversion rate higher or lower than average in your industry?

Why Conventional Wisdom Around Conversion Rates is Silly

Learning that the experts you've been listening to all along are wrong is a bit like learning for the first time as a kid that mascots aren't real. Underneath that fluffy suit there was just a sweaty unshaven guy. Everything you've learned about conversion rate optimization is a bit like that: shiny and pretty on the surface, but seriously lacking in substance.

How is everyone getting it so wrong? Primarily, if you're singing the same song as everyone else, you can really never be anything more than average. When all of the gurus are all preaching the same optimizations, and all of your competitors are listening to them, how are you supposed to stand out?

The Classic Conversion Rate Optimization Test is Silly

Ladies and gentlemen, this is the Great Conversion Rate Optimization Fairy Tale. Once upon a time, a self-professed marketing guru told you it's really important that you optimize your site. They shared one example where the author changed the button color, or the font spacing, or the image. Lo and behold, the advertiser's conversion rate jumped by 2-7%.

good conversion rate

Amazing, right?! Um, no, not really. These are really basic, run-of-the-mill A/B testing best practices. Yes, you should be doing these optimizations on an ongoing basis, and you're probably going to see small, single-digit increases in your conversion rate – but it's not likely to shoot you into the 10% or greater conversion bucket.

Let me show you what happens with those gains generated by these small tweaks on your page. Here's an example of a landing page split test; the gray line on the bottom is the first page version we were running. The blue line is the second version we ran against it. In the beginning, the new page far outperformed the old. Awesome, right?

conversion rate optimization tests

Except as you can see, the gains were not long lasting. In fact, the "better" page would eventually plateau. We began running 20 to 30 tests at a time and saw this pattern across our tests. We call this a premature testing dilemma. You see an early lead but shortly down the line, the early lead disappears.

This isn't true all of the time, of course. However, we found that in the majority of cases, small changes like line spacing, font colors, etc. = small gains. If you want big, serious, long-lasting conversion gains, you need to move past these spikes that last only a couple of days or weeks.

Why does this happen? Often, it's because the total volume of conversions you're measuring against are low to start with. If you're looking at 50, 100 or even 200 conversions across your entire test, small changes can seem more impactful than they really are. A couple of conversions might mean a 4% conversion increase if there are only 50 conversions total, because your sample size really isn't big enough to start with.

It's Time to Stop Moving the Chairs Around

conversion rates

When it comes to landing page optimization, you can stay really busy doing small things that have little impact. It's like rearranging deck chairs on the Titanic. We need to move past this mentality to the big tactics and optimizations that will dramatically change your performance and fortune.

First, we need to know:

What is a Good Conversion Rate?

Hint: it's a lot higher than you may think.

Conventional wisdom says that a good conversion rate is somewhere around 2% to 5%. If you're sitting at 2%, an improvement to 4% seems like a massive jump. You doubled your conversion rate! Well, congratulations, but you're still stuck in the average performance bucket.

In this analysis, we started with all accounts we can analyze and went back a period of 3 months. We removed those that didn't have conversion tracking set up properly, those with low conversion volumes (<10 conversions/month), and low volume accounts (<100 clicks/month), leaving hundreds of accounts for our analysis. We then plotted where the accounts fit in terms of conversion rate.

conversion rate distribution

So what is a good conversion rate? About 1/4 of all accounts have less than 1% conversion rates. The median was 2.35%, but the top 25% of accounts have twice that – 5.31% - or greater. Check out the far right red bar – the top 10% of AdWords advertisers have account conversion rates of 11.45%.

Remember, this isn't for individual landing pages – these advertisers are accomplishing 11.45% conversion and higher across their entire account.

Clearly, this isn't some anomaly; this is perfectly attainable. If you're currently getting 5% conversion rates, you're outperforming 75% of advertisers … but you still have a ton of room to grow!

best conversion rates

You should be shooting for 10%, 20%, or even higher, putting your conversion rates 3x to 5x higher than the average conversion rate. Aspire to have these landing page conversion rate unicorns in your account.

But Conversion Rates Are Lower in My Industry…

That's entirely possible. We segmented conversion rate data by industry to see whether these insights held true for all marketers. Here's what we found in an analysis of four major industries:

conversion rates by industry

There's a lot of flux there; e-commerce has a far lower average conversion rate, especially compared to finance. However, check out the Top 10% Conversion Rates. They're 3 to 5 times higher than the average for each industry, so we can see that the rule holds across the board, regardless of industry.

The flip side, of course, is that if you're in a high-performer industry like finance, 5% really isn't a fantastic conversion rate. If you're comparing yourself to the average across all industries, you're really deluding yourself into thinking you're doing better than you are. In truth, the top 10% are doing almost five times better.

Even if the average conversion rates are lower in your industry, the top advertisers are outperforming you by 3-5x or more.

The Top 10% of Landing Pages: What Makes Them Tick?

What do these top 10% of landing page unicorns look like and how are they killing the competition the way they are? We went through 1,000 landing pages and performed a qualitative analysis, in order to find the common traits among the best performing advertiser landing pages in the market.

Here are my top five tips to help you reach landing page unicorn status:

1. Change the Offer

Across all of the high-performing landing pages, we saw massively creative and differentiated offers. Companies often have a default offer, their go-to, which may be the same or very similar to what all of their competitors are doing. Lawyers, for example, will offer a free consultation. Software companies will offer a free trial. They're unimaginative and not very creative.

How can you get creative with your offer? In our case, we realized that offering prospects a free trial of WordStream software really wasn't very imaginative or compelling. We had to think outside the box (don't you love that phrase?) and come up with something different and unique; something more tangible and compelling than just sending them to a software trial to find their way around.

landing page offer

What we came up with was our free AdWords Grader, which actually gives people an account evaluation report, with recommendations to help them improve their AdWords strategy. This was a HUGE turning point for us. Prospects loved it and conversions went through the roof.

So how do you know if your offer stinks? If your conversion rate is stuck at 2% or lower, you're not there yet. But the real way we figured out how our offer stunk was by asking our customers. We added one form field on our landing page form to ask people what they wanted our help with – and it wasn't a free software trial.

Brainstorm, ask your customers, and come up with more unique offers to test. You'll never know which one is the winner until you try some new offers out.

2. Change the Flow

Sometimes, you're putting up barriers to conversion without even realizing it.

landing page test

In the above example, you can see the first landing page version and just how much information people had to provide before they could download the software trial. Clearly, this was too much for many prospects. It was daunting and discouraging – not the kind of user experience you want on your landing page.

conversion rate optimization

Here you can see their new landing page iteration, which turned out to be an exponentially better performer. They've changed the flow so that anyone can download and install the file. At the last step, the user is asked to register the software. At this point, they've already spent 10 or 15 minutes with the software and are far more likely to invest the time in completing the information form.

This was actually so effective that they were overwhelmed with conversions. They ended up backing off slightly and using the registration to find more qualified leads, by asking for the information one week after the download, once their prospects had time to sit and get to know their software. Changing the flow helped them boost conversions, but also manage lead quality in a far more effective way.

Here's another great example, where the advertiser realized their landing page offer didn't necessarily speak to the person who would be performing a search. In their case, a loved one or friend might be seeking help.

landing page optimization tests

This advertiser decided they would let the visitor choose their own flow. This was incredibly effective not only for conversion, but also in segmentation for their remarketing and lead nurturing efforts.

So what's the takeaway here? Find the flow that works best for your prospects and use it to boost conversion rate and qualify your leads.

3. Use Remarketing as a CRO Tool

On average, 96% of the people who visit a website will leave without ever converting to a lead or sale. Remarketing helps you get in front of these people with targeted, relevant messaging as they take part in other activities around the web, like email, watching YouTube videos, using social networks or searching for information.

Check out my post at Moz for a deep dive into this incredibly effective tactic.

4. Try Out 10 Landing Pages to Find 1 Unicorn

Let's talk about effort for a minute. What do you need to put into CRO to find your own unicorn landing pages? To understand this, let's look at the relative abundance of these top performers:

great conversion rates

Sometimes you get lucky, but if you want to achieve these top 10% landing pages across your account, you need to replicate the above steps multiple times and perform testing on an ongoing basis.

On average, you should be testing four unique landing pages – with varying offers, flow and messaging – to find that one awesome landing page. If you want to find a unicorn landing page – that top 10% page that sees your conversions reaching 3-5x the average – you need to test at least ten landing pages.

Here, we've analyzed an e-commerce account with 1000 unique landing pages. About a third of traffic goes to the top most-trafficked landing page in their account. When we dig deeper, we see that about 80% of traffic goes to just the top 10% of landing pages.

landing page conversion rates

You don't need to make thousands and thousands of landing pages. You need to find the top performers you already have and focus your efforts there. How can you improve their performance? Cut the fat, stop wasting time on the low performers – in fact, just get rid of them. If you have just one great landing page, it's smarter to focus your efforts there.

Here's more proof that burning the midnight oil creating dozens or hundreds of landing page variations isn't the best use of your time:

number of landing pages

Here, we've plotted out tens of thousands of accounts by conversion rate vs unique landing pages. We don't see a strong correlation between increased number of landing pages and increased conversion.

If you're after the top performers, quantity does not necessarily equal quality.

5. F%@# Conversion Rates

Wait, what??

conversion rates

Stay with me here. Higher conversion rates, on their face, seem awesome. However, if you're converting less qualified leads, you're actually throwing MORE money away, because those leads cost you money.

I want you to focus on landing page optimizations like the above that move you in the direction of higher quality, more qualified lead generation, not just more conversions.

Key Takeaways

So what have you taken away from this? I hope you can get the following to stick and use these tips to guide a more holistic, effective conversion rate optimization strategy – the kind that will boost your conversions, but bring better lead quality, as well.

  1. Most landing page optimizations are like moving around the deck chairs on the Titanic. Small changes = small gains.
  2. Insanely focused and strategic landing page optimization brings 3-5x the conversions AND improves lead quality.
  3. In some industries, even 5% conversion rates aren't that impressive. If you're stuck in the 2-5% conversion rate bucket, you have a ton of room to grow.
  4. Get creative with your offers and test multiple different offers to find the one that resonates best with your audience. If you want to get really crazy (you know you do), find different offers that can help you qualify leads in the process.
  5. Identify the obstacles keeping prospects from converting and get those roadblocks out of the way by changing the flow. Test different variations to find out exactly which path to conversion works best for your audience.
  6. Use remarketing to recapture people who showed intent but didn't convert.
  7. Test smarter, not more often. You need to test 10 unique landing page variations to find 1 top performer, but this goes far beyond changing a font color and calling it a landing page variation.
  8. Trim the fat in your account and ditch your lowest performers. Focus your energies on the top 10% of landing pages that earn 80% of traffic.
  9. Always, always keep your eye on the prize, which is making more sales or generating leads most likely to convert to sales. Don't let high conversion rates take precedence over lead quality or you're going to spend more qualifying leads. You need to find the sweet spot where everything works like a well-oiled machine.

You made it! For all the awesome from our recent conversion rate optimization webinar, see the full video below:

If you missed our last webinar, make sure you check out The Secrets Behind Ads with 3x the Average CTR. Our goal is to help you get every aspect of your AdWords account working at peak performance.

Now go forth confidently, young marketer, to slay competitors and wow prospects with your newfound conversion optimization knowledge. Give our free AdWords Grader a spin to see exactly where you're at with your current landing page strategy, then start making smarter changes that will rocket you past your competition.

And as always, if you have any questions about our data, strategy or the tips outlined above, fire away in the comments!

Find out how you're REALLY doing in AdWords!

Watch the video below on our Free AdWords Grader:

Visit the AdWords Grader.

Comments

David Cornish
Aug 24, 2016

Really helpful for business website!! Thanks so much for sharing.

boberdo
Sep 04, 2016

Great information, thank you. I just wanted to say this post has helped me tremendously and thanks so much for sharing such wonderful tips!

Nate
Sep 24, 2016

What happens when you control for price? To make it concrete, can we be sure comparing one of your "unicorns" to a more average conversion rate isn't just because they're selling cheaper widgets?

Also, what counts as a conversion rate? An opt-in to a mailing list or webinar? A cheap trip-wire product? What would happen if we defined "conversion rate" as number of buyers of a $500+ flagship product /number who saw an offer. What would the numbers look like then?

Leonard
Oct 07, 2016

​Hi there, You’ve done a fantastic job. I will definitely digg it and in my view suggest to my friends. I am sure they will be benefited from this website.

Startup Guy
Oct 12, 2016

You're driving me crazy calling the top 10% unicorns. If 1 in 10 horses were unicorns, they wouldn't be that special.
We are killing the unicorn concept.

Otherwise, good article content. :)

anita
Nov 08, 2016

hey Larry, is 1% conversion is good or bad for 10000 customers?

PPC Consultant
Nov 17, 2016

Thanks Larry Kim, i will keep reading your posts and i really appreciate for helping the business minded people with your latest tactics and strategies.

James Martinez
Dec 29, 2016

Super informative article ladies and gents. I am constantly recommending changing offers and spending more time on varied landing page strategies to clients! Keep up the great work!

sedin
Jan 08, 2017

Really good stuff!

Superlative Websites
Mar 20, 2017

Outstanding article! The tips here will keep me busy for awhile testing LP strategies.

Indigo
May 13, 2017

Wow. I came here to see how my 30% conversion rate stacked up. Seems like pretty darn well! Onward and upward.

filipe barcellos
May 19, 2017

Great post! Every detail makes a difference in the conversion rate, knowing what is lowering it is essential to lower the acquisition currencies! But one metric I think most important is Roi! Grateful!

Dave
Sep 30, 2017

We do not advertise, have no social media accounts. We only sell via our website, and traffic comes from search engines and word-of-mouth recommendations.

We have a conversion rate of ± 12% site-wide (e-commerce, selling premium high-priced dietary supplements worldwide). No clue if that is good or bad in this sector, but we generate a significant amount of money. We're paying more in taxes than the rest of the people on our block make all together, annually. No joke.

So we're happy. And in the end, that' s what counts. Not an abstract number, but 'do you make a decent profit'

Alex Omelchenko
Dec 08, 2017

Larry, tones of value you provided with this post. Thank you! However, how many of the local business where included in the research? You provided numbers for different niches, but probably the geographical size of the business should be taken into consideration. Do you have anything written/analyzed about small businesses in particular? I’d love to have a look the conversion rate averages for local plumbers, electricians, etc.?

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