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Does Your Website Have a Good Conversion Rate?

Does Your Website Have a Good Conversion Rate?

Do you want to improve lead generation on your company’s website? If that’s one of your goals, look at your website’s conversion rate. This metric refers to the percentage of website visitors who complete a specific goal.

The two types of website conversions are:


A micro-conversion is when you achieve a step toward your goal. For example, a micro-conversion is when a visitor subscribes to your newsletter, downloads a white paper or watches a product video.

Micro-conversions occur before macro-conversions.


A macro-conversion happens when you achieve your goal. For example, you make a sale, earn a new paid subscriber or have someone complete a contact form.

Once you complete a goal, you’ve got a website lead.

How to calculate your website's conversion rate

You can calculate your website’s conversion rate with this simple equation:

Number of leads ÷ unique website visitors = conversion rate

Of course, the flip side of the equation is:

Unique website visitors × conversion rate = number of leads

To get more website leads, you must increase your website’s traffic or conversion rates. This is why the conversion rate is a critical website metric.

'Good' conversion rates

Many companies want to know how they stack up against their competitors. Determining a “good” conversion rate for your industry will be difficult. You’re not comparing apples to apples.

Here’s why: Every business defines a “website lead” differently. Most companies’ websites generate different tiers of leads. A demo request would have a greater value than a newsletter sign-up. This is because each prospect is entering a different stage of the sales funnel. But marketing departments often mistakenly consider these “leads” equal.

It’s difficult to compare website conversion rates, even among companies that offer similar services. This is because many other variables are at play. For example, do we know who they’re converting? Are they qualified decision-makers? Or information gatherers? What channel did the leads come from? How much do their services cost?

As a result, data context is missing. Therefore, comparing your website conversion rate to a competitor’s isn’t effective.

Evaluating your conversion rate

The only conversion rate that matters is your own. Forget about measuring against so-called industry benchmarks. Instead, measure where you are now and then set targets for improvement. To accomplish this, track your website conversions through Google Analytics. Set up a goal for each type of lead (contact form, phone call, content download, etc.), so you can see the conversion rate for each one.

Next, assign a value to each conversion. To do this, you’ll need to know the following:

  • Percentage of each lead type that your sales team closes into customers. A good customer relationship management system will help you track this.
  • The average lifetime value (LTV) of new customers.

For example, let’s say you run Software Company A. Your sales team closes 5% of demo request leads into customers. Your average customer generates a total of $20,000 in revenue over its customer “lifetime.” You can calculate the value of a demo request lead this way:

$20,000 (average LTV) × 5% (sales close rate) = $1,000 (demo request lead value)

Last month, 15 people out of your 1,000 website visitors submitted demo requests. This gives you a conversion rate of 1.5%. The rate is well below “industry averages” you’ve seen of 3.4% to 7%.

Now, let’s look at Software Company B. The company also had 1,000 website visitors last month, but received 30 demo requests. The company’s conversion rate is 3%, which is double your rate. Consequently, it seems like you’re doing poorly in comparison to Software Company B, doesn’t it?

But wait! Software Company B’s sales team only closes 3% of its demo request leads. Furthermore, the company doesn’t retain customers as long as you do. As a result, the company’s average LTV is only $15,000. Next, let’s compare the numbers in context:

Software Company A:

1,000 website visitors × 1.5% conversion rate = 15 demo requests

15 demo requests × $1,000 lead value = $15,000 total monthly lead value

Software Company B:

1,000 website visitors × 3% conversion rate = 30 demo requests

30 demo requests × $450 lead value (3% close rate × $15,000 average LTV) = $13,500 total monthly lead value

Let’s assume the two companies spend the same amount on marketing. This means that Software Company A has a better return on investment  even with a conversion rate that’s half that of Software Company B.

Setting your target conversion rate

Conversion rate optimization should be an ongoing effort. It should be driven by analytics and testing. Set a monthly goal following the example above. Your goal could be to increase your demo request conversion rate by .1%. To do so, you could test a different form style, tweak your calls to action or improve your landing pages. Five months later, you will have generated an additional $15,000 in total lead value and improved your monthly lead value by 30%.

By focusing on the website metrics that matter most to your business instead of on industry standards, you can watch as small improvements have a huge effect on your bottom line.