Article By Ron Sela

 It’s common knowledge that the best products don’t always make it to the top. Many times great products fail, and companies have to go back to the drawing board because of a lack of strategic marketing. Time and again, the magic is in a product-led marketing strategy that covers all the bases.

This read provides a detailed guide on developing a product strategy, creating a product roadmap, and executing a successful product launch.

Find invaluable advice on these pages.

What is Product-Led Marketing?

Product-led marketing is a strategy in which the product is the primary driver of growth. It focuses on promoting and selling a product rather than a service or brand, opposing traditional marketing strategies. Its goal is to create demand for a product by highlighting its features and benefits.

You can often see this marketing in SAAS companies or industries where products are highly technical or complex, and customers require substantial information before purchasing. In these cases, product-led marketing can be an effective way to reach potential customers and build greater market penetration. By providing detailed information about the product and by demonstrations, your sales team can help customers make an informed decision during the entire buying process.

To be successful, product-led marketing must be supported by a well-crafted marketing plan that includes objectives, target markets, and key messages.

How Product-Led Marketing Works 

Product-led marketing relies on three things: Trial, education, and word-of-mouth. 

Trial

The best way to get people to buy your product is to let them try it first. Provide demos and offer free trials of your product so potential customers can see how it can benefit them. 

Education

Once people have tried your product, educating them on its optimum usage is necessary. You can do this through blog posts, video tutorials, or even in-person events. 

Word-of-mouth

Finally, once people use and enjoy your product, they’ll start talking about their positive customer experience. And when they do, make sure you’re ready to capitalize on that by monitoring social media and other online channels for interactions with your brand. 

Why Should You Consider It for Your Business?

There are many reasons why product-led marketing can be beneficial for your business. Here are four:

Enhanced brand awareness

Product-led marketing can help you become more famous because people will see your product more. It can also help you keep your current customers because they will be able to see how your product has improved. You can give away free samples or conduct demonstration videos that show how the product works.

Greater profitability potential

Product-led marketing leads to greater profitability potential because it creates a need for the product. With proper product marketing, businesses can create or heighten a demand in their customers that they did not have before. This effective marketing technique targets consumers’ buying motive and gets them to purchase the product. It increases the company’s profits with relatively lower customer acquisition costs.

Improved customer loyalty

This approach can lead to improved customer loyalty for three reasons.

• Product-qualified leads are more likely to be active and engaged product users. They have already been exposed to the product and its value firsthand.
• Product-led marketing leads to a higher quality customer base. Customers acquired through this type of marketing are more likely to be satisfied with the product and less likely to churn.
• It helps create a virtuous cycle of growth for product-led growth companies. As customers become loyal users of the product, they also become advocates for your brand. They spread word-of-mouth about your product, leading to more customers signing up. This positive feedback loop can lead to sustained growth for product-led companies over time.

Strengthened Brand Equity

Putting the product front and center allows customers to focus on what the brand offers and what makes it unique. As you focus on the product experience, you build a solid emotional connection with customers. Product-led marketing also drives constant innovations and improvements, keeping the brand relevant and top-of-mind. With all these, your customer success team can create a secure relationship with your target companies, building a sturdy foundation for long-term brand equity.

Now that we’ve defined product-led marketing and why you should consider it for your business, let’s look at the pieces that constitute successful product-led growth marketing.

Components of a Product-Led Growth Marketing

If you want to drive a product-led growth strategy, you need to focus on five key areas: merchandise, market, message, media, and methods. Let’s zoom in on each component so you can create a comprehensive growth marketing strategy for your business.

Merchandise

The merchandise is the physical product that you are selling. It is the foundation of your product-led company and what everything else revolves around. It sounds obvious, but if you want people to buy your product, you need to offer them something they want or need, or as we said, create that need.

Market

The market is whom you are selling your product to. Knowing your target companies is essential for developing an effective product-led growth marketing strategy. Yes, you have a great product, but you must be sure you’re earmarking the right people.

Message

The message is what you are saying about your product. It includes your brand identity and how you position your product in the marketplace. A strong message resonates with your target market, thus answering these questions: Why should they buy your product? What need does it fill? How will it improve their life?

Media

The media is how you deliver your message to your target market. It includes your website, social media, and paid advertising. 

Methods

Finally, you need to focus on conversion optimization to turn leads into customers. Your methods are the tactics you use to execute your product-led growth marketing strategy. You will need A/B testing, customer segmentation, and funnel optimization. 

Now we can put all these components together and create a strategy.

How to Create a Product-Led Marketing Strategy

It’s already settled that in a product-led marketing strategy, your product is the star of the show—not your marketing collateral or campaigns. This approach can be extremely effective, especially for companies with innovative products that speak for themselves.

But you still need a strategy. Here’s a seven-step process you can follow:

Step 1: Understand your target market and their needs

This is invariable. The first step in any marketing strategy—product-led or otherwise—is understanding your target market. Who are they? What do they need or want? What are their pain points?

Examine these steps:

1. Consider your current customer base. Who are they, and how can you serve them? Take the time to understand their businesses and what they want in a partnership. It will give you valuable insights into the companies most likely to benefit from your products or services.
2. Take a look at your competition. Whom are they targeting, and how are they positioning themselves? This research will help you better understand the needs of your potential customers and how you can best meet them.
3. Ask your target market directly! Surveys and interviews can be very helpful in getting feedback from potential customers about their specific needs.
4. Create buyer personas. These are made-up representations of your ideal customer based on factual data and research.

Step 2: Identify your product’s unique selling points (USPs)

Every product has unique selling points (USPs), and it’s important to identify yours before developing your marketing strategy. What makes your product preferable to the competition? Why should potential customers invest in it? Once you know your product’s USPs, you can begin to craft messaging that highlights them. 

Step 3: Create product messaging that resonates with your target market.

At this stage, you can start to develop messaging that resonates with them. You must include this messaging in all your marketing collateral, from website copy to social media posts to email Marketing campaigns. 

Here are uncomplicated tactics for creating impressive product messaging: 

• Keep it simple and easy to understand 
• Be clear and concise 
• Highlight the benefits of your product, not just the features 
• Use customer testimonials and case studies to show proof points 

Step 4: Develop a content plan that aligns with your product messaging

Once you have finalized your product messaging, it’s time to start thinking about content. Content is essential for any marketing strategy, but it’s vital for product-led approaches since it helps potential customers understand how your product can help them solve their specific problems or meet their needs. 

Some things to note as you develop your content plan: 

• Map out the buyer’s journey and create content for each stage 
• Make sure all of your content aligns with your overall brand identity and voice
• Don’t be afraid to get creative with different types of content (eBooks, infographics, blog posts, etc.)
• Use data and analytics to track engagement and adjust accordingly
• Always test different pieces of content before investing too much time or resources into them 

Step 5: Use effective channels to reach your target market

One of the most critical aspects of creating a product-led marketing strategy is choosing the right channels to reach your target market. There are a plethora of marketing channels accessible today, so it’s important to carefully select the ones that are cut out for your business and your products.

The most effective channels will vary depending on your product and target market. Some effective channels for reaching buyers include online advertising, webinars, eBooks, and social media marketing.

Step 6: Implement a lead generation process that will generate quality leads

To be truly successful, you need to generate leads that convert into customers. The best way to achieve this is by implementing a lead generation process that generates high-quality leads. To do this, you need to identify your target market, create compelling content that will capture their attention, and use effective call-to-action techniques to encourage them to take action. 

Step 7: Analyse and track the performance of your marketing campaigns

If you’re not measuring the performance of your product-led marketing campaigns, you’re missing out on valuable insights that will improve your results. The final step of creating a product-led marketing strategy is analyzing and tracking the performance of your marketing campaigns. It will allow you to see what’s working and what isn’t so that you can make necessary adjustments.

To do this effectively, plenty of tools and resources are available to help you. Google Analytics is a great place to start, but other tools like KISSmetrics, Mixpanel, and Heap can be helpful.

Once you have all this data, you can see patterns and trends emerge. This information will be invaluable as you fine-tune your product-led marketing strategy.

Best Practices for Launching a New Product

Launching a new product is both inspiring and nerve-wracking. On the one hand, you have a fresh product that you’re excited to share with the world. On the other hand, you have the pressure of making sure everything goes off without a hitch. No matter how prepared you are, there’s always a chance that something will go wrong.

The key is to minimize the risk of going wrong by following some tried-and-true best practices. 

Plan, Plan, and Plan Some More

One of the most important things you can do to ensure a successful product launch is to plan as much as possible. It involves planning for every eventuality and preparing contingency plans in case something goes wrong. By taking the time to plan everything out in advance, you can avoid many of the pitfalls that can trip up even the best-laid plans.

Keep a Tab on Your Competition

Another necessary thing to do is to keep an eye on your competition. You are already aware of your main competitors, but it’s important to monitor their activities leading up to your launch date. This way, you can adjust your plans accordingly if they make sudden changes. For example, if one of your competitors launches a similar product before you do, you may need to adjust your marketing strategy to emphasize why your product is different or better. 

Create a Prototype

Creating a prototype will allow you to work out any kinks in the design and ensure that it meets all your quality standards. You can show the prototype to potential customers and get their feedback before the launch. It’s also a good idea to market-test your prototype with a small group of potential customers before you launch it. It will give you valuable feedback that you can use to improve your product before it goes live. 

Furnish Your Product for Launching

Making sure your product is ready for launch day is another critical step in having a successful launch. It includes providing enough units to meet the demand and ensuring that all the packaging and labeling are correct. If any last-minute changes need to be made, now is the time to do them. By taking care of these details ahead of time, you can avoid potential issues on launch day. 

Build Up Anticipation

Leading up to the big day, it’s important to build up anticipation for your product amongst your target market. You can do it through marketing campaigns, social media teasers, and even leaked information (if you feel bold). The goal is to generate as much interest and excitement as possible so that people will be clamoring for your product when it finally hits store shelves or goes live online.

Launch and Learn from Your Mistakes

No matter how well you plan, there’s always a chance that something will go wrong on launch day (or even afterward). The key is not to let this discourage you; instead, view it as an opportunity to learn and improve for next time. Taking these lessons to heart ensures that each successive launch is more successful than the last one. 

Conclusion

As a B2B entrepreneur, product-led marketing is an excellent way to showcase your product and its features while providing valuable information to potential partners. By focusing on the product, you can demonstrate why it is superior to other products on the market and highlight its unique selling points. This type of marketing also allows you to build trust with target companies by providing them with accurate and helpful information.

Moreover, product-led marketing can be a great way to generate buzz and excitement about a new product launch. By creating an engaging and informative campaign, you can capture the attention of potential customers and encourage them to try your product.

FAQs

Here are other questions about product-led marketing that we have not covered in the article.

How do you create a winning product for your business?

While there’s no silver bullet or one-size-fits-all answer, some factors can help you give your product the best chance of success.

First, you should clearly understand your target market and their needs and wants. Once you know this, you can begin to ideate and develop products that address those needs and wants. It’s also important to keep an eye on trends in your industry and make sure your product can adapt and change as needed.

Second, ensuring that your product delivers value to customers is critical. It must be well-designed, easy to use, and provides a good user experience. It’s also important that your product is priced competitively and offers a good value proposition.

Lastly, have a solid marketing and launch plan in place. It should include identifying your target market, defining your marketing objectives, and crafting a messaging strategy. It’s also important to create compelling content that will generate interest in your product and drive traffic to your website or store.

How can you ensure your products stand out in a crowded market?

There are a few ways to ensure your products stand out in a crowded market. One is to create a unique product that can’t be found anywhere else. Another is to price your products lower than the competition. And finally, you can market your products to make them more appealing to consumers.

What are the challenges of product-led marketing?

Some major challenges include:
1. Guaranteeing that the product is the star of the show. Too often, companies focus on clever marketing slogans or pretty packaging instead of ensuring the product is worth buying.
2. Creating a clear value proposition for the product. To persuade consumers to buy your product instead of a competitor’s, you need to articulate what makes it unique and why they should care.
3. Generating excitement and interest for a new product launch. It isn’t easy, especially if the product is not innovative or interesting.
4. Ensuring that accurate and helpful information is provided to potential customers. To build trust with target companies, you must ensure that the information you provide is accurate and helpful.
5. Creating compelling content to drive traffic to your website or store. It can be challenging if you’re not a skilled writer or marketer.

Paid search trends to watch for the 2018 holiday shopping season

Shopping, local searches and audience optimizations are three of the biggest considerations to keep in mind.

With turkey carving set to commence on the morrow, the busy holiday shopping season is officially upon us (I’m a 40L for curious souls, love classic fabrics, timeless styles and cheese). As such, paid search marketers are gearing up for the next few weeks of data crunching, promotional scheduling and optimizations to make sure there’s more than coal awaiting them on Christmas Day.

By now you’ve hopefully got a solid strategy set and are ready to take advantage of the surge in online shoppers searching for gifts and gadgets aplenty. Still, here are a few key paid search trends to think about before the bird is out of the oven.

In retail, Google Shopping is king

I’ve written at length several times (here and here) throughout the years on the growing importance of Google Shopping for retail advertisers, but it just keeps getting bigger! In Q3, data from Merkle (my employer) showed Shopping accounting for 87 percent of all non-brand Google paid search clicks.

As such, retail advertisers must now focus a significant portion of their attention on these campaigns to get ready for the holiday season. Keeping close track of which products are driving traffic and orders and mining query reports for potential negatives and/or query-mapping optimizations is now an absolute must.

Advertisers should also be mindful of newer Shopping variations that are becoming increasingly prevalent in search results. For example, Showcase Shopping Ads have grown significantly over the last year, and went from accounting for just 1.6 percent of phone Shopping clicks for participating brands last Q4 to 5.1 percent in Q3 2018.

With Google increasingly choosing to show these units for more general searches, including in some layouts which show both Showcase ads and traditional Shopping units, having Showcase campaigns active and ready is more important than ever.

Another important variation of Google Shopping ads which stand to play a crucial role this holiday season are Local Inventory Ads (LIA), which give users information on when a product is available for pickup at a nearby store location. These units have also grown meaningfully in the share of Shopping traffic they account for over the past year for participating brands.

LIA trends can depend heavily on advertiser strategy during the holidays. Some retailers become significantly more aggressive with LIAs in order to push users in-store, while others maintain roughly the same strategy as pre-holiday. Still, many brands see LIA click share grow around Black Friday, as well as in the leadup to Christmas Day when users can no longer feel confident that items ordered online will arrive in time.

For advertisers that have LIAs active, being mindful of shipping cutoff days and shifting strategy to prioritize LIAs over traditional Shopping units can help provide a boost during key offline days.

However, LIAs aren’t the only local ads that brick-and-mortar brands should be mindful of during the holidays this year.

Users turn to navigational apps in the final days of holiday shopping

For the last several years, the U.S. Bureau of the Census has reported a jump in e-commerce share of total U.S. retail sales from Q3 to Q4, as shoppers seem to become more likely to order online during the busy holiday season. Even so, e-commerce sales still accounted for just over 10 percent of Q4 sales last year, as brick-and-mortar conversions continued to account for the vast majority of sales.

As many surveys and offline attribution techniques show, however, many brick-and-mortar sales are preceded by online research.

Users don’t just turn to traditional search engines in researching offline purchases – they also go straight to navigational apps, including Google Maps. While Google has yet to provide reporting to cleanly segment Maps ad traffic, click type reports provide some insight as the “Get location details” click type primarily comes from Maps.

Over the past couple of years, I’ve identified a trend that spans essentially all brick-and-mortar retailers studied that shows an increase in the share of text ad traffic attributed to “Get location details” in the days leading up to Dec. 25. This is what that looks like for one apparel retailer studied.

As you can see, Dec. 23 and 24 were by far the biggest days for Maps clicks. This trend indicates that shoppers modify their search behavior and go straight to navigational apps once they know shipping will be pricier or too slow to arrive in time. A similar uptick in searches probably occurs on other navigational apps as well.

Another trend to point out is that the share of traffic coming from these ads increased significantly from 2016 to 2017, something observed across our brick-and-mortar advertisers over the last couple of years. In Q3 2018, Merkle saw a meaningful lift relative to the quarters prior, so brick-and-mortar brands might be seeing even more traffic coming from these ads this year.

While Google announced Local Campaigns in July, at this point most retailers are still deriving Maps ad traffic from location extensions added to active keyword campaigns.

There’s not much control with this setup as there are no bidding or other targeting levers available specifically for Maps via location extensions, but one thing to certainly keep an eye on is offline attribution. Since Maps searchers are naturally more likely to head in-store than convert online, online conversion rate may start to slip as traffic from Maps grows. Being mindful of this throughout the holiday season will help ensure ads are being bid based on the full value they drive, both online and offline.

After Shopping and local searches, I’ve got one more big trend to keep an eye on this holiday season to help make your paid search campaigns glisten.

Audiences, audiences, audiences

It’s probably no surprise to you that audience segmentation has grown tremendously in importance over the past couple of years. Merkle advertisers that use audience targeting find 30 percent of all Google paid search traffic is now attributed to Remarketing Lists for Search Ads (RLSA), Customer Match or Similar Audiences.

One trend that might pop out from the chart above is the dip in RLSA click share in September. The decline started in mid-September around the time of the rollout of Apple’s Intelligent Tracking Prevention (ITP) 2.0 initiative, but share bounced back and returned to previous levels by the end of the quarter, where it’s remained ever since.

Talking with sources in the know, it does sound like ITP 2.0 could eventually prevent RLSA tracking and targeting for iOS and Safari 12 users, but that the erosion of RLSA for those users would happen slowly over time. As such, we shouldn’t expect too much of a dip over the course of the holiday season, but it wouldn’t be totally out of the realm of possibility.

In terms of strategy, advertisers should be trying to use these audiences to maximize the value of these shoppers who are already familiar with the brand. While that can at times mean bidding more aggressively to stay in front of these searchers when they’re researching, it’s important to keep in mind that last click attribution often inflates the true value of ad clicks from these audiences, since some audience members would end up converting anyway.

In addition to bidding adjustments, modifications to ad copy and landing pages can help place the most effective offers and experiences in front of users based on interests displayed during past interactions with the brand. With RLSA audiences now allowed to include website visitors from as far back as 540 days, forward-thinking advertisers that created holiday shopping-specific audiences from last year’s Q4 shoppers can call on those audiences this season for optimizations.

I do think it’s important to note that there’s a lot of misinformation floating around on the use of audiences, with some in the industry going as far as to say advertisers should only target remarketing audiences in paid search since those users have higher CTR and conversion rate. While a small share of advertisers might want to pursue such a strategy, most brands would be ill-served by turning off ads to anyone other than those searchers that are already existing customers. In terms of incremental value, often ad clicks tied to non-audience members can have the biggest positive effect for an advertiser’s business.

There’s no silver bullet for all advertisers to use to effectively target audiences in paid search during the holiday season, as every brand is different. That said, brands should be aware of how these audiences have performed in the past and keep an eye on how things are shaking out this year to identify potential pain points or successful strategies that can be built upon throughout the season.

Conclusion

There are plenty of other paid search bits and pieces to focus on throughout the next few weeks, but Shopping, local searches and audience optimizations are three of the biggest considerations to keep in mind. Getting them right can go a long way towards making the next few weeks as successful as possible.

Source Search Engine Land

11 Things CMOs Need To Know About Mobile Marketing Strategy And App Development

I honestly cannot believe I actually have to write this but this just in, pretty much entire world is on a mobile device on pretty much the whole time they are awake. In other words, the world of mobile marketing and its ridiculously enormous benefits should come as no surprise to anyone.

I have written countless articles on the topic of mobile marketing going back years. I don’t say to imply I am some sort of soothsayer or anything like that. I merely bring that point up to highlight the fact that mobile marketing is not something someone in the marketing world should just be waking up to.

Ok enough about that.

I’ve put together a high-level list for CMOs or any marketer for that matter to consider when looking at their mobile marketing strategy. 

1. Mobile App or Mobile Website?
Many companies rush forward and create an app just because their competitors have one. But not every company needs an app. Often a mobile-optimized site will meet most requirements. Mobile apps, however, generally allow for more creativity, and better interaction with your targeted users.

According to Janna Badalian, Director of Marketing at MobileSmith, “When it comes to customer engagement, native mobile apps can give your website a run for its money.You can engage various groups of customers and offer them a superior user experience – even without a reliable Internet connection.”

2. How Are Your Customers Using Mobile?

Use analytics to understand how your target audiences are using mobile. Are they transacting or using it to gather information? Are they mostly on Android or iOS; smartphones or tablets? Translating this data to your IT will help them make the right decisions and prioritize development plans. However, sometimes requirements can get “lost in translation.” Marketers usually know best what their customers expect from a mobile app, and they can get their idea to market quicker if empowered with the right app prototyping and development tools.

3. Get to Know ASO

What is ASO? App Store optimization. The App Store can be a great source of new customers or it can be a competitive nightmare where your app never sees the light of day. Getting to understand ASO is a critical part of gaining traction and maintaining traction in the App Store. Sites like apptamin.comoffer great information on the subject. 

4. Get to Know Your Competitors
Download your competitor’s apps. Not just you, but everyone on your team should get to know what’s out there and how the competition operates. Not only will you get some ideas, you will find out what they are not doing well which will give you an opportunity to identity ways to beat them. 

5. Check Cost Per Download
This is a fundamental issue that hits the business side of marketing your company with an app. It’s one thing to develop an app, it’s entirely another to motivate customers or potential customers to download the app. 

6. Consider In-App Advertising
CMOs should look at the app landscape and focus on popular apps with frequent usability. Popular apps like Twitter allow in-app advertising or mobile advertising, and that’s one way to quickly distribute your app. 

7. Use Social Media to Acquire Users
You should consider every distribution point that you think is efficient, but certainly use mobile social media platforms. The technology offers an almost immediate access to download your app. Your creative plan to drive consumers to download must be spot on, or your app will fail. 

8. Double-Down on Mobile

The future of marketing is mobile: Mobile is the most personal device we possess, which makes it the best device to market to. In addition, time spent in mobile apps has already surpassed time spent on desktop Web, and for some parts of the world, mobile devices are the first and only computer people possess. 

9. Use Mobile App Marketing Automation
CMOs are already familiar with marketing automation on the Web; however, mobile apps present a lot of unique challenges and opportunities. On the Web, marketing automation is predominantly a B2B market, whereas apps are primarily for consumers. Also, the primary use case for marketing automation on the Web is lead nurturing, whereas with mobile apps it’s about engagement, retention, and lifetime value. Therefore, CMOs responsible for mobile apps should adopt marketing automation solutions specifically designed for mobile. 

10. Take Advantage of Real-Time Location
Location is one of the great opportunities for marketers on mobile. CMOs should experiment with iBeacons and geo-fences, not only to be able to segment users based on where they’ve been in the past, but also to design marketing interactions for users as they enter or leave certain locations. For example, switch the user experience in the app to “in-store mode” once a user passes by the iBeacon at your storefront, or send a survey to hotel guests as they leave the geo-fence of the hotel. 

11. Be Lean!
Mobile holds tremendous promise, but it’s also uncharted territory for a lot of CMOs. We can’t rely on gut feeling of past experience to build a successful mobile app. Instead CMOs should adopt a culture of data-driven decision making and build their app incrementally. That involves relying on A/B testing and analytics for optimizing both the in-app experience and all marketing interactions, such as push notifications. 

Ecommerce conversion rates

Compilation comparing average conversion rates for retail sites and other industry sectors

As you will know, conversion rate is often used as a KPI to review the effectiveness of Ecommerce sites. Naturally all site managers and owners want to know, "how do our conversion rates compare?"

In this post I have compiled different free industry sources focusing on retail Ecommerce conversion, but towards the end of the post a chart shows average conversion rates for a range of sectors including B2B conversion.

Before we get to the stats, one other caveat on analysis of conversion rates:

When benchmarking conversion rate, we think it's important to explain to marketing managers that they should go beyond headline conversion rates to segment conversion by different types of visitor.

March 2014 update - conversion rates by device

The Monetate Ecommerce Quarterly is a great source giving regularly updated benchmarks on conversion segmented by devices and media for large Ecommerce brands.

Their latest quarterly update shows conversion rates to add-to-basket/cart and sale across the last 4 quarters.

With shoppers increasingly using smartphone and tablet to purchase, it's important Ecommerce site owners know the effectiveness of trading via these platforms.

If you're creating a business case for mobile optimised sites as explained in our mobile marketing strategy guide, this data is also valuable since it shows the variation in conversion rate by mobile type.  Tablet conversion rates are similar, but slightly lower than desktop conversion rates, suggesting people are increasingly comfortable with the experience of buying on tablets.

However, it's a different story for Smartphones since these convert at one third to one quarter of the rate of traditional or tablet devices.

This suggests smartphones are more of browse or research platform rather than a buy platform since many of the large retailers featured in this survey will have mobile optimised sites. Smartphone experiences should be personalised to show this different form of usage.

March 2013 update - conversion rates by channel

March 2013 update - UK average conversion rates from IMRG

With the acquisition of retail analytics service Coremetrics by IBM we lost one of our best free sources for comparing conversion rates. Within the UK data is compiled for members by retail category. These aren't usually shared, but the overall trend was recently published in this 2012 Ecommerce report from Channel Advisor-IMRG.  This chart shows that average conversion rates for visits to sale of 4 percent. Note that these are typically for large brands, so conversion rates for less well-known brands that don't have the credibility, trust or large base of returning customers will generally be lower. Based on previous UK compilations from Coremetrics when their data was published we can say that typical average conversion rates for established retail brands are...

Conversion rate (visit to add to basket): 8% Conversion rate (visit to sale): 4%

It's interesting that there is a typical 50% abandonment from basket through checkout to sale, even with the efforts on checkout optimisation. It suggests many will add to basket when researching and comparing, but may eventually buy elsewhere online or offline. This is a screengrab of the Coremetrics data from 2009 which shows that visitor sessions with an add to basket or cart are typically double those of order or sale sessions.

Options for segmenting conversion rate

As Dan Barker suggests in his advice we mentioned at the start of this post, conversion rate gets more useful as you break it down by different types of visitors with different intent and a different relationship with the retailer. Different conversion rates and average order values can then be segmented for different audiences to understand and work to improve the quality of traffic or strength of propositions, for example:

• First time, repeat visitor or registered customer conversion
• Referring channel conversion, e.g. paid or natural search, social media, affiliates, display advertising
• Search type, e.g. paid or natural, brand, generic or long-tail
• Product category type - conversion rates are much higher for simple commodity products for example - flower purchase (double digit percentage) compared with a higher cost product that will often be purchased in store (for example beds or furniture which which will often be less than one percent).
• Promotion type or seasonal sale - the IMRG data and Coremetrics data below shows that conversion rate can increase dramatically at these times.

Conversion rates for non Ecommerce sites including B2B conversion

I'm also often asked about conversion rates in other sectors, particularly for business-to-business lead generation. While similar caveats about sub-category, type of visitor and strength of brand apply, this is a useful compilation from  Marketing Sherpa of average conversion rates by industry sector.

Dec 2011 update

We'll update on the latest figures in 2011. In the meantime, this IDM/Coremetrics US Black Friday / Cyber Monday conversion rate averages shows some interesting data on conversion for mobile devices and visitors from social media including Facebook and Twitter. Still, it's natural we will still all be asked "how to we compare?", so we have compiled some of the best sources of conversion rate statistics here. We suggest you compare these four key types of conversion rate: 1. Overall site session (visit) conversion rate as reported in this 2010 Coremetrics example (US data - see sources at the end of the post).2. Visitor conversion rate calculated by dividing the number of conversion events by the number of unique visitors within a defined time period. 3. Shopping basket conversion rate (percentage who add item to basket who convert, e.g. 4. Session search conversion rate (percentage of visits which include a search (notice that conversion rate and average order value (AOV) tends to be higher for these visitors.

Original sources for Ecommerce conversion rate statistics

These are our original recommendations on the best sources for comparing Ecommerce conversion rates:

• UK conversion rates from Coremetrics - Coremetrics is rated by Forrester as one of the premium web analytics systems and offers sector specific conversion benchmarks to clients. Reports conversion rates as order sessions with clearly stated definitions of different types of conversion.

• US conversion rates from Coremetrics - The most up-to-date conversion rates for November 2010 are given for the US.

• Fireclick Index of conversion rates - provides conversion rates from less well-known analytics provider in different categories including Fashion / Clothing, Electronics and software