Funnel Drop Off Rate: What Is Acceptable?
So you have done everything right to grow your online business. Your initial steps of attracting traffic and getting some leads seem to be working just fine. After all your efforts, your leads seem to disappear without converting into paying customers.
If this feels like what you are going through, the problem is in the conversion funnel drop-off. Identifying the reasons for your drop-off rate can help you make the necessary changes to ensure your business reaps the benefits of your efforts.
What Is Funnel Drop-Off?
Funnel drop-off happens when a lead in your conversion leaves before getting to the final stage and purchasing. It is usual for users to drop off as the funnel gets narrower or as they approach the buying stage.
Identifying the reason can be very helpful in creating a solution to minimize the drop-off rate. Unfortunately, many marketing tools show the drop-off rate, but few provide reasons for it. This makes finding the reason for the drop-off extremely long and challenging.
But there is a way out.
Using a funnel drop-offs tracking tool can help you keep track of the number and the reason for the drop-offs. With this kind of information, it is easy to make changes to help you streamline your conversion process and boost conversions.
Calculating Drop-Off Rate
Before calculating drop-offs rates, it is essential to understand that a drop-off is the direct opposite of the conversion rate. This means if the conversion rate is 10 percent, the drop-off rate will be the remaining 90 percent.
To calculate the conversion rate, you take the number of visits in the last stage of the conversion funnel (purchasing stage), divide it by the first stage visitors, and multiply the value by 100.
Say your first stage had 1000 visitors, and 150 made it to the buying stage. The conversion rate will be 150/1000 multiplied by 100, which equals a 15 percent conversion rate. In this case, the drop-off rate will be 85 percent.
Alternatively, you can calculate the drop-off rate by taking the number of visitors in the first stage, subtracting the number of visitors in the final stage, dividing the value by the number of visitors in the first step, and multiplying the figure by 100.
Going by the example used earlier, the drop-off rate would be 1000 minus 150 multiplied by 100, which comes to the same figure of 85 percent.
What Rate Is Acceptable?
According to a report by Adobe Digital, most industries have an average conversion rate of three percent, meaning that 97 percent of users drop off in the conversion process. Many experts agree that a conversion rate of anything above two percent is good enough. That means a funnel drop-off rate should be anything less than 98 percent.
Acceptable drop-off rates can vary from one industry to another. For example, a website dealing with low-value commodities may have a lower drop-off rate than one dealing with high-value products or services.
Reducing Your Drop-Off Rates
The lower your drop-off rates are, the higher the ROI your campaigns will produce. There are some known and tested ways of reducing a business’s drop-off rate.
These include simplifying your CTA, leveraging social proof, running personalized campaigns, keeping your audience engaged, creating urgency, creating data-backed funnels, and leveraging consumer reviews testimonials.
The first step towards fixing an alarming drop-off rate is identifying the root cause of the problem. This means investing in a tool that does that. With the data you get from your tool, make the changes that will improve your conversion rate and ensure good ROI.