Of all the KPIs and metrics B2B marketers keep an eye on, conversion rate is arguably the most important. It’s an indicator of how convincing your message – and your product – is.
Many marketers look at conversion rate as a passive thing that just happens. Either people convert or they don’t.
Often, conversion rate goals are set arbitrarily, or without a deep understanding of what’s actually needed – and what counts as “good”.
B2B Conversion Rate Benchmarks: How to Calculate (and Improve) Yours
The thing is, looking at conversion rate in isolation doesn’t give you the whole picture. Sure, it’s a very important metric, but it’s only as valuable as the context surrounding it.
For example, if you have a high conversion rate but only a small amount of traffic, you can’t reasonably assume that rate is accurate, because you don’t have a large enough sample size. One view and one conversion makes a 100% conversion rate, after all.
What is a Conversion?
A conversion is a specific action you want your website visitors to take. Most often, this falls in one of two categories. Someone becomes a lead by giving you contact information, usually converting by filling out a form, or they become a customer by making a purchase.
In this post, we’ll be referring to conversions as meaning leads, not customers.
What’s a Good Conversion Rate?
The best way to see how well you’re performing is by comparing your performance to others’. However, you need to make sure you’re making a valid comparison.
If you’re a B2B SaaS company and looking at conversion rate data from, say, the real estate industry, you’re not comparing apples to apples, so to speak.
For the B2B sector, the average conversion rate is just above 2%. If you’re doing better than that, you’re already ahead of the pack.
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Calculating Your Metrics and Goals
The formula for conversion rate is simple:
Number of leads / total traffic x 100
However, this doesn’t tell the whole story. To get a clear overview of your performance, you need to look at a more holistic picture.
For each marketing channel you use – PPC, social media ads, everything – perform the following analysis:
You have your traffic numbers and conversion rate. Next, note the average monthly recurring revenue you get from traffic.
Divide your monthly revenue by the monthly number of leads (not customers!). The result is your maximum target cost per lead.
Still with us? Let’s look at it as a table:
|Leads||Close Rate||Customers||Revenue||Target CPL|
In this example, you bring in 70 leads per month. On average, 8 of them make a purchase. The value of those 8 purchases is $2300.
In order to gain more revenue than you spend acquiring those customers, you need to spend under $27.80 per lead.
Knowing that, you’re ready to start identifying where you can make improvements.
Identify Weaknesses, Reinforce Strengths
Once you know each channel’s traffic, cost, conversion rate and target CPL – and engagement metric such as clickthrough rate where applicable – you can look at the story your KPIs tell you and act accordingly.
If your actual CPL is above your target, you have two options: increase your traffic or increase your conversion rate. Or, ideally, both.
The trick is managing this without spending more on improvements than those improvements give back in the form of leads.
There are a few ways you can increase your traffic without having to spend more. You could blog more (or at all, if you’re not doing it yet). Blogs are a fantastic way to bring more organic traffic to your website.
You can also leverage social media posting (not paid advertising) to try and increase your website traffic. A combination of both is good: write an awesome blog post, then post about it on social media.
Optimize for Conversions
Increasing your conversion rate is a little more experimental. The process can be summarized as follows:
- Identify what places on your site are getting the most engagement and attention
- Ensure that there’s a clear call-to-action in those places
- Perform A/B tests constantly
A/B testing is an immensely powerful tool in your arsenal, but for it to work properly you need to never stop running experiments. Even if they’re small changes like testing a new CTA text, or a whole new page design, everything is valuable.
If you’re always testing, comparing and iterating on the best performing results, you’ll never stop improving.
Hacking Your Conversion Rate
Overall, improving your conversion rate can be a slow process, since you never know the results of your tests beforehand. If you’re lucky, you might hit upon a change that has a major impact.
In the end, it’s all down to how well you can convince people to fill out your forms.
But what if you didn’t need to do that to get B2B leads?
Clickback WEB is a software tool that changes the conversion game. Here’s how it works:
- People visit your website
- Clickback WEB identifies companies among your website traffic
- You get useful data on those companies, such as industry, size, and revenue
- You also get accurate contact data for leads at those companies
- You can filter by attributes like industry and job role to easily find the most suitable ones
- Add them to your funnel!
Notice that there’s something missing there? With Clickback WEB, you get leads even when they don’t fill out a form.
It’s time to kick that 2% conversion rate out the window. Get your 14-day free trial of Clickback WEB today.