In today’s episode of The Startup Chat, Steli and Hiten talk about how to know if your conversion rates are good or not.
In the startup world, it’s very common for founders to get hung up on benchmarks, conversion rates and so on, that they lose focus on what really matters - testing and optimization. There are just too many variables that affect the results that it is impossible to know what a good conversion rate for your business is until you’ve tested things out.
In today’s episode, Steli and Hiten talk about benchmarks, how knowing the right benchmarks depends on a number of criteria. how different variables can affect benchmarks and much more.
Time Stamped Show Notes:
00:00 About today’s topic.
00:35 Why this topic was chosen.
03:00 How knowing the right benchmarks depends on a number of criteria.
03:39 Why ranges don’t matter.
04:10 Why you should look inside your business not outside it.
05:00 How different variables can affect benchmarks.
05:15 Why you should benchmark yourself.
06:39 The importance of testing and optimizations.
08:12 An example of things you can test out.
08:43 Why you shouldn’t get hung up on benchmarks.
3 Key Points:
Everybody wants to know what the benchmarks are.There are ranges for all of this stuff.I would look inside your business not outside it.
Steli Efti: Hey everybody. This is Steli Efti.
Hiten Shah: This is Hiten Shah.
Steli Efti: Today on The Startup Chat we're going to explore the question, "Are my conversion rates good or bad?" This is the setup for this episode. I was talking to a marketer, and he was telling me about the SaaS company that he works for. He was telling me about the current conversion rates that they see from traffic to trials, and from trials to paid. He was asking me basically, "Are these conversion rates good," to which of course I said, "I don't know. It depends." Right? How much did it cost to get this traffic? How much traffic are you getting? How long do these customers stay versus churn? How much does it cost to service these ... I mean it's a complicated question. As I was going through this with him, at some point he was like, "Yeah, but aren't there benchmarks? Where can I go to get 2019 benchmarks for SaaS companies, or SaaS companies in my vertical industry, or in my country? There must be some place where I can just look at what do other SaaS companies get to have some kind of an idea if this is good or bad, or how much worse or better I fare?" I had to tell him, I was like, "Yeah, I'm sure there are some studies of some stuff, but I don't have this on top of my head. I don't really know. I haven't looked into this." To which then that marketer said, "Well, why don't you bring this up to Hiten? I'm sure he has good answers. You guys should do an episode on this. I think I'm not alone with this kind of predicament or challenge." So here we are Hiten, and this is a big call out and props to all The Startup Chat listeners. We listen back to you, and any time you guys send us an email, firstname.lastname@example.org, email@example.com, or you tweeted us, or you come up to us in person at an event, conference, or anywhere else, coffee shop, where you see us, we love the suggestions, and we always try to make it happen for you. So any time a listener tells us, "Hey, wouldn't this be a great topic for an episode? I'd love to hear this," we try to make it happen. So here we go Hiten. This is the mandate I was given, and hereby I offer you the big question, "What the fuck should be my benchmarks, and how do I figure this out as a marketer in SaaS in 2019?"
Hiten Shah: Everybody wants to know what the benchmarks are. Everybody. It's just like, "Hey, what are my benchmarks? Well, what should I be aiming for? What should I target?" There's a lot to unpack when it comes to this beca...