Someone has asked me to address this question in my blog. So here is my answer:
The conversion rate of your affiliate program will always be highly dependent on (i) how established your brand is, and (ii) what industry you work in. It will also roughly correspond to the overall conversion rate that you, as an online merchant, register.
To illustrate how a strong brand contributes to the conversion of an affiliate program, let’s look at the overall conversion data for the following brands:
- ProFlowers – 28%
- OfficeDepot.com – 23.65%
- Blair.com – 20.15%
- 1800Flowers.com – 19.22%
- L.L. Bean – 18.67%
- QVC – 18.32%
- Amazon and eBay.com ~ 15-17%
I have arrived at the above figures upon an analysis of data presented by Nielsen Online / Marketing Charts for the past 6 months (Aug. 2008 – Feb. 2009). A conversion range from 15% to 25% is not unusual for established online merchants.
As to the differences in conversion ratios depending on the industry, it is helpful to turn to the data that Fireclick Index provides. Here’s the data that they are currently showing:
- Software ~ 4%
- Catalog ~ 3%
- Specialty ~ 1.4%
- Outdoor & Sports ~ 1.3%
- Fashion & Apparel ~ 1%
Analyzing conversion rates over “a number of different segements” of the online market, Foreclick Index arrives at an overall conversion range of 2.4%-3.3%, which corresponds to the conversions I have been noticing with affiliate programs across different verticals over the past 5 years. A good overall conversion rate for affiliate programs ranges from 2.5% to 3.5%. If you’re registering something significantly lower, I would highly encourage you to study the conversion rates in your particular vertical (some verticals — for example, high end jewelry, furniture and electronics — do generally convert at lower rates) to see how you compare to your peers, and if your conversion is significantly lower than your vertical’s average, it’s time for you to vigorously look for the reasons behind it (they may range from uncompetitive pricing to poorly designed webpages, shopping cart, etc).
Dear Mr. Prussakov,
When you are talking about a good conversion rate of 2.5% to 3.5%, are you refering to the overall conversion rate – from traffic to my site to transaction on merchants’ site, or otherwise?
Thanks,
Dan.
Dan,
No, it’s not the traffic to your site that is important, but rather: how many click-throughs on a merchant’s ad it takes to convert into a sale.
In other words, if your affiliate website gets 500 visitors a day, of which 100 click on a merchant’s ad, and this results in 3 sales a day, it is not the 500 that you want to focus on, but rather the 100 that clicked-through. If 3 of them ended up ordering, that’s your 3% affiliate program conversion rate.