Have you ever pondered this existential question: what is the true meaning of marketing? Is it the art of capturing interest, or perhaps the science of analysing and responding to customer behaviour patterns?
It might be a bit of both. But at its very core, marketing is the art and science of effectively communicating the perceived value of whatever it is you are selling.
How can you measure the effectiveness of your communication with your potential customers? One way to test this is through conversion metrics.
Welcome to Metric Stack. I’m Priyaanka Arora, your personal metric assistant and Content Researcher & Writer at Klipfolio. This week in the Metric Stack Newsletter, we’ll look at the importance of web sign up rates, benchmarks, and tried-and-tested methods of boosting and sustaining conversion rates.
What is Sign Up Rate?
Sign up rate, also known as web-to-sign up rate or web conversion rate, measures the effectiveness of your website in converting visitors to sign up for your product. Here’s the formula:
Sign Up Rate = Web Sign Ups / Website Sessions
The formula measures conversion as a percentage of total web sessions, which is a set of interactions with your website by a single user in a fixed period of time. This essentially means that you are tracking sign ups per meaningful interaction instead of sign ups per unique visitor - accounting for visitors who come back several times before signing up. If you offer a product trial on your website, this can also count as a sign up but you would need to further measure trial conversion rate.
What is a good Sign Up Rate benchmark?
In general, a good sign up rate ranges between 2% - 5%. Obviously, the higher your sign up rate goes, the better it is for you: your website is performing its primary duty to sign people up for your product. In fact, the top converting SaaS websites have sign up rates well into the double digits. I go into more detail in my blog post, The Hidden Value of SaaS Sign Up Rate Benchmarks, but take a look at the chart:
You can tell from this chart that the top 10% of websites convert at a rate of 11% or more. This same study also presents sign up rate benchmarks by industry: Finance converts highest at an average of around 5%, while B2B converts at an average of >2%.
Are higher sign up rates better?
You must be wondering why I would ask a question with such an obvious answer. More sign ups means more money, right? But how you sustain that flow of new customers is key.
Having a great product, excellent customer support, and a strong expansion strategy can help, but you may run into trouble if your high volume of sign ups translates poorly to loyal customers.
Recall how I mention that marketing is all about communicating value. If the cause of or intention behind a sign up is miscommunication of value, one-time incentives, or other gimmicks, you haven’t necessarily lost out - but you are left with a set of customers that are a poor fit for your business. And that can be a costly mistake.
Here's what Jonathan Taylor, Director of Marketing at Klipfolio, has to say:
“Sign Up Rate is a KPI that's usually reported on at the board and exec level, so it's really tough to go down in sign ups even if they are poor quality.”
So how do you keep that number up while still ensuring quality? Jonathan says:
"Email automation and segmentation; increasingly personalized emails dedicated to moving folks through the funnel. Intermediary offers as well -- so offering a content download with a nurture that leads to a sign up instead of asking right away. Parcel out your pages based on intent and pair an appropriate offer."
The key to boosting your sign up rate
As we’ve seen, you don’t want to just increase sign up rates through any means possible, because those sign ups are less likely to stick. If you offer a trial, low trial conversion rate can help identify low quality sign ups whereas high churn is your metric of choice to measure conversion quality for non-trial sign ups.
The key to generating more quality sign ups lies in big-picture strategic moves for long-term, sustained conversion.
I really enjoy this article by WordStream on their experiments with conversion rate optimization. In a nutshell, bigger changes to your landing page can help you break past average sign up rates to unicorn levels of conversion.
One big change that can boost sign up is revising your offer to creatively communicate your product’s value. For example, a diagnostic quiz or a mini-trial of one aspect of your product could bring in more users that enjoy the experience and want more. Other ways to do this include, as Jonathan mentions:
“...social proof, product screenshots, lean forms with limited fields/info required; high frequency of testing forms, big and small changes like colours, words, placement.”
Another equally important aspect that can improve sign up rate is optimizing your sign up form itself. Limiting the number of steps between sign up and reducing the number of form fields can result in a shallow boost, but the real value lies in communicating the value of your product on your form. Achieve this through branding, hyper-targeted copy, and creative sign-up flow. Some excellent advice from Jonathan on how to extract the best result from your form:
“Build a strong reporting funnel around the form -- steps before, steps after; for example, using Google Analytics to find segments that convert such as visitors who spend more than 30 seconds on your site.”
Finally, keep tabs on your data. Know your data inside out, whether it’s your web traffic stats, goal conversion rate, sign up rate, or in-app behaviour and activation rate. A free analytics tool such as PowerMetrics can help you easily connect to all your data and see it in one place with no code or messy spreadsheets.
Tune in to the Metric Stack Podcast!
Can you measure creativity? For Allen Lau, co-founder and CEO of Wattpad, data, analytics, and numbers are at his core. With over 90M monthly active users on the platform, it’s impossible to manually look at the data. This week on the Metric Stack podcast, hear how Wattpad prioritizes data with StoryDNA, a machine-learning technology that analyzes billions of data points every day.
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