If you operate an e-commerce business, you’ll know intimately well the balancing act constantly playing out in your mind and in your strategic and tactical planning processes.

As you plan your next move to take your web business to an even higher level of performance, you’re confronted with multiple and many times competing opportunities.

Do you identify and execute a new advertising method? Do you spend more time optimizing your current advertising methods? Do you test out a new advertising method you recently read about in your Search Marketing Standard magazine? Do you expand your pay-per-click campaigns to LookSmart or a vertical search engine like FindGifts.com?

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A question I am asked frequently is what is the average conversion rate for an e-commerce website or for any website for that matter.

There is a basic answer and a more complicated yet more practical one.

For the basic answer I reference a recent study conducted by Forrester as presented in an article from the August 2007 edition of Target Marketing Magazine. The article stated, “Forrester research indicates that the average conversion rate - that is the ratio of orders to overall site visits - is 2.9 percent.”

About three-fourths of the e-commerce companies I have worked with to improve their conversion rate (defined the same way as indicated above) initially reported to me a conversion rate of less than 1.0 percent. Therefore, from my experience the average conversion rate among small to mid-size businesses (ones probably not well represented in Forrester’s study) is maybe closer to 1.5 percent.

NOTE: If anyone has expereince with a larger number of samll to mid-size e-comemrce sites, please send me your thougths on the average conversion rate! It would be a great information for everyone to know.
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