Baseline Conversion

Definition

In Conversion Rate Optimization (CRO), baseline conversion refers to the initial conversion rate of a website or digital platform before any optimization efforts are implemented. It acts as a benchmark metric, allowing CRO professionals to measure the effectiveness of changes and improvements made to enhance user experience and drive conversions.

By establishing a baseline conversion rate, businesses can track progress, identify trends, and compare the impact of A/B tests or design updates. This data-driven approach ensures that optimization strategies are based on measurable improvements, leading to more informed decisions and higher conversion rates over time.

Baseline Conversion vs. Benchmark Conversion

Baseline Conversion represents the initial conversion rate of a specific process before any changes are made.

It’s a reference point for evaluating the impact of optimizations.

Benchmark Conversion, on the other hand, involves comparing the conversion rate of a process against industry standards or best practices, providing insights into the process’s performance relative to established norms in the industry.

Think of it this way.

Baseline Conversion helps you track your internal progress after implementing changes. At the same time, Benchmark Conversion offers a broader perspective, enabling you to align your goals with industry best practices and make data-driven decisions to enhance your conversion rate.

The Importance of Understanding Baseline Conversion Rate in Digital Marketing

As an eCommerce professional, you know the importance of knowing how many people are buying your product.

You also know that it isn’t just about the sales numbers. It’s equally vital to understand how many people know about your product and how many of them believe it’s the right choice for them.

The baseline conversion rate helps you get that precise understanding; it’s a metric showing you what you’re doing right and where you might need to improve.

If you’re running a store, and lots of people are coming in, but not many are buying anything, it’s a signal that, although consumers are interested, something is stopping them from purchasing.

It could be how your store looks, how your products are displayed, or how your staff interacts with customers.

On the other hand, if many people visit your store and the majority end up buying something, your conversion rate is high.

This is excellent news because it shows that your store is doing something really well, and people feel comfortable making purchases.

The same logic applies to your eCommerce store.

Think about what your baseline conversion means for your business.

You will want to consider reaching even more people if it’s high. This could mean adding more ads or using social media to introduce your product to a broader audience.

Conversely, if the baseline conversion is low, it’s time to consider other aspects. Maybe your branding and marketing strategies need some attention. Or perhaps your website layout and design make it hard for visitors to find what they want.

Your baseline conversion rate is a starting point for the roadmap that guides you to where you need to focus your efforts.

It means lacking crucial insights into the effectiveness of your marketing strategies and the appeal of your website and products to your audience right from the start.

Without understanding this fundamental metric, you might misallocate your resources, investing in strategies that do not contribute significantly to actual sales.

This situation directly impacts your profitability, especially considering your baseline conversion rate sets the stage for any future improvements.

Moreover, the absence of a clear baseline conversion rate makes strategic decision-making challenging.

You lack concrete data to guide your choices, slowing down your ability to develop effective plans based on your initial performance.

This lack of a starting point can also put you at a competitive disadvantage, especially if your competitors optimize their strategies based on their baseline rates.

Additionally, an unknown or low baseline conversion rate could indicate potential issues with your website, user experience, or product offerings right from the beginning.

Customers might encounter obstacles during the purchasing process, leading to dissatisfaction and negative feedback, which could harm your reputation from the outset.

As you can see, understanding your baseline conversion rate isn’t just about numbers; it’s about improving your business entirely.

Benefits of Knowing Your Baseline Conversion Rate

The benefits of understanding your baseline conversion rate go beyond what you’ve read so far.

In essence, knowing this rate opens the door to a wealth of advantages, providing valuable insights that shape smarter marketing decisions.

Let’s explore the benefits:

Better CRO Processes

The baseline conversion rate is the starting point for your CRO journey, indicating where you start and where you want to go.

You can’t improve your processes without first understanding how well your initial strategies work.

After you pinpoint your current performance, you can tweak and improve your website to raise your rates.

This way, your efforts become not just good – but great, tailored to what your customers prefer.

Wiser Budget Allocation

No matter how great you’re doing, your budget is, in fact, a limited resource.

You want to distribute it toward strategies that work best.

Understanding your baseline conversion rate tells you where that happens.

You can focus your budget where it brings in more customers and sales.

You’re not just spending money but investing it wisely to get more in return.

Knowing Your Place in the Market

The eComm & Retail Arena is a big race. And you’re in it.

Understanding your baseline conversion rate is like checking your position. Are you leading the pack or catching up?

You learn where you stand by comparing your rate with others in your field.

This knowledge helps you find your strengths and weaknesses, allowing you to play to your strengths and work on your weaknesses to stay ahead.

In essence, understanding your baseline conversion rate isn’t just about numbers; it’s about making your CRO efforts shine.

It guides you, helps you spend your resources wisely, shows you where you stand in the market, and even lets you understand your customers better.

With this knowledge, you can transform your business into an outstanding companion in the eyes of your customers.

What is the Baseline Conversion Rate Formula?

The baseline conversion rate formula is the following:

Baseline Conversion Rate =(Number of Conversions / Total Number of Visitors or Interactions) × 100 %

In this formula:

Number of Conversions – the specific desired actions taken by users, such as making a purchase, signing up for a newsletter, or filling out a form.

Total Number of Visitors or Interactions – the total number of visitors to a website users interacting with a specific page.

The result is expressed as a percentage by dividing the number of conversions by the total number of visitors or interactions and multiplying by 100.

Methods to Calculate Baseline Conversion Rate

So, how do you find this important metric?

There are multiple approaches to calculating the baseline conversion rate, each offering unique insights into a business’s performance. Here’s a breakdown of the most common methods used by CRO professionals:

Historical Data Analysis

This process involves examining past performance data to understand conversion rates achieved in previous periods or campaigns.

To calculate the baseline conversion rate, divide the number of conversions during a specific period by the total number of visitors (users or interactions) in the same period.

This method helps businesses understand their typical conversion rates over time. This understanding facilitates the foundational understanding of your usual performance levels.

Comparing Against Industry Benchmarks

In this case, you will compare your business’s baseline conversion rate against industry standards or averages within your specific sector.

Research industry reports, studies, or surveys to find the average baseline conversion rates for similar businesses, then compare them with your own rate.

This way, you can determine your performance relative to industry standards.

Industry benchmarks provide context and help you assess your competitiveness. This comparison reveals whether your business performs above, below, or at par with your peers.

Using Analytical Tools

Tools such as web analytics platforms offer real-time data and insights into your user behavior and conversion rates.

You can use these tools to track user interactions, conversions, and your overall website traffic. Usually, they will have features to calculate conversion rates automatically based on user interactions.

One such tool is Omniconvert’s Explore – which provides dynamic and up-to-date information about user behavior across all your tests and experiments.

Explore helps you monitor conversion rates in your experiments, identify patterns, and respond promptly to changing user preferences or behaviors.

Screen capture from Omniconvert’s Explore, using dummy data for our demo account.

Strategies to Improve Baseline Conversion Rate

The baseline conversion rate is a static number; it’s a value that’s attributed to your website in one specific moment and can’t necessarily be improved. As soon as you’re implementing a CRO initiative, your baseline conversion disappears.

However, there are several methods to improve your website (or any other digital platform) so your conversion rates are better than the baseline value.

All these methods revolve around making your digital presence more compelling and customer-friendly.

Before we discuss well-known refined approaches designed to uplift your conversion rates, an important disclaimer: take everything you read with a grain of salt.

CRO is all about making data-driven decisions, so don’t try any of these strategies before conducting UX/UI and Data Audits. This way, you’ll be sure your efforts align with your accurate situation, and you aren’t deploying any strategies just for the sake of trying.

1. Website Optimization

Your website is the entry point to your business.

It should be inviting and easy to explore. Optimize your site’s design, making it visually appealing and accessible on all devices.

Simplify the purchasing process, making it smooth and hassle-free. Use social proof to earn consumers’ trust.

Refine every detail based on users’ feedback to create an environment where visitors are naturally inclined to become customers.

2. A/B Testing

You won’t get it right from the first try, and that’s excellent. CRO (and A/B testing in particular) is similar to refining a recipe until it’s perfect.

Experiment with different versions of your website or marketing materials.

Analyze the results to understand what brings the best results.

This is how you craft your content, layout, and buttons in a way that resonates most with your audience based on real data.

3. User Experience (UX) Improvement

Prioritize readability, simple navigation, and content relevance to create engaging experiences.

Integrate intuitive design elements and interactive features that captivate visitors.

A delightful user experience ensures that visitors feel comfortable and engaged, increasing the likelihood of conversions.

4. Targeted Marketing Campaigns

Use the JTBD methodology and user surveys to understand your audience’s preferences. Then, create campaigns that cater to specific segments.

Personalized marketing speaks directly to the hearts of potential customers.

By acknowledging their needs and delivering on them through marketing, UX, and product quality, you create a powerful connection that encourages them to take action.

5. Customer Feedback for Continuous Improvement

Your customers are your guides in the digital landscape.

Encourage them to share their thoughts through surveys or reviews.

Listen to their suggestions and concerns.

Their feedback is a wellspring of ideas for refining your offerings and processes.

With these strategies, you craft an environment where conversions flourish naturally.

Each tactic, from website optimization to personalized marketing, plays a part in creating a seamless and engaging experience for your visitors.

In this carefully curated environment, conversions become not just likely but almost inevitable, paving the way for long-lasting business growth.

What is a Good Baseline Conversion Rate?

The notion of a universal benchmark for eCommerce baseline conversion rates is misleading.

These rates are influenced by various factors beyond the quality of the store’s experience, and a higher rate does not always equate to better performance.

Several elements come into play when benchmarking eCommerce baseline conversion rates:

1. Traffic Sources

Websites generating high traffic from ads or blog posts usually have lower conversion rates compared to those relying on existing customers or social media followers.

It’s not that ad or blog-driven sites are inferior; they are merely reaching out to a broader audience, often for the first time.

2. Price Points

Platforms offering pricier products generally experience lower conversion rates than those selling more affordable items. Higher-priced products demand more consideration from consumers, as they represent a significant share of their income.

According to marketing psychology, average conversion rates tend to drop notably after $50 and then again after $150 and $500.

3. Purchase-type

Subscription-based products tend to have lower conversion rates than those selling one-time purchases.

Subscriptions require more time for consumers to contemplate due to the commitment involved. Additionally, subscription-based stores typically receive fewer visits from repeat customers.

While a universal benchmark may not exist, comparing your store’s performance against an overall average can still provide valuable insights. You can use widely renowned and respected sources such as Statista to uncover the specific benchmarks for your industry.

Wrap-Up

As you can see, understanding your baseline conversion rate is pivotal for your digital strategy.

It’s not just a number; it’s the cornerstone of your Conversion Rate Optimization efforts.

The baseline conversion rate provides invaluable insights into your initial performance, guiding your improvements and strategic decisions.

We encourage you to calculate your baseline conversion rate and utilize this metric for better marketing outcomes.

Don’t forget about Omniconvert’s Explore.

This powerful CRO tool offers real-time insights into user behavior and conversion rates.

Explore allows you to monitor conversions, identify patterns, and adapt promptly to changing user preferences.

Check it out here and turn your baseline conversion rate into the launchpad for a thriving online presence.