What Are The Conversion Rates InTthe B2B ndustry?

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conversionWhat’s the ideal B2B conversion rate? A number of studies that tried to pinpoint the right number showed variable figures from 1% to 10%. The huge gap isn’t a surprise, considering that, unlike in B2C where conversion boils down to a single individual taking a specific action (buying a product), in B2B, complex factors, such as, industry, seasonality, traffic source, price points, decision makers, etc. influence the buying decision.

To start with, in B2B conversion can mean different things to different marketers, further making it harder to come up with a definite rate.

What is “conversion?”

Although in B2C that’s easily defined as an online purchase, in B2B conversion nobody will visit a site and buys on the spot, say, an annual cloud CRM subscription. Rather, B2B buyers make a thorough research about your product and the purchase decision isn’t made by a single executive, but a decision-making unit or DMI, an ad-hoc team of executives, managers, and key employees who share their inputs to choose the right product.  

Somewhere along the product research and across different individuals who are making the research, a B2B conversion is better defined as a contact registration signup, an action that gives you, the vendor, a quality lead that can be nurtured into a sale down the funnel.

Therefore, B2B conversion spans a range of specific customer actions, from downloading a white paper to watching a webinar, and to subscribing to a free trial or receiving a customer inquiry.

Let’s take a look at notable B2B conversion rate studies, which tackled the subject from different perspectives, such as, by industry, lead channels, critical visitor volume, and comparison with B2C rates, and see what insight you, the SaaS vendor, can get.

Studies on B2B conversion rates

A Marketing Sherpa study on B2B web conversion rates showed the following results by industry:

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What do these stats tell you as a SaaS vendor?

We can deduce from this study that professional services and education/healthcare ranked highest because they’re a needs market. Customers visit these websites, for example, a legal firm, university site, or medical center, because they’re already looking for a specific service and it’s just a matter of clicking for the right terms. It’s similar to going to a pharmacy, you already made the decision what medicine to buy before entering the drugstore. Compare it to dropping by a grocery, a wants market, where purchases depend on how much brands can influence you while you shop for things that fancy your senses.

As for media and publishing, they have a high conversion rate simply because they rank high in SERPs. Search engines reward media sites with high SERPs because they are often visited by many people and their topical content is widely shared via social media and backlinks.

Consequently, buyers who conduct a generic product search can easily encounter a featured product that has appeared in a high-traffic media site like CNN, Forbes, HuffingtonPost, etc. In short, a product can ride on the popular ranking of a media site and, hence, earn a conversion.

SaaS vendors can learn two things from these high-conversion industries. First, SaaS should further reinforce their position as a necessity, not an option. The upward trend in SaaS demand–IDC predicted that 27.8% of the worldwide applications market will be SaaS-based by 2018 vs. 16.6% in 2013–tells us that more businesses find the benefits of cloud solutions as a competitive necessity, rather than an alternative to on-premise applications.

Second, search is still king when it comes to lead-to-conversion. In the Google/Millward Brown report (March 2015), 71% of B2B buyers are found to start their product research with a generic search. We won’t be surprised if they land first on a media site that tackles your product or category.

Meanwhile, another study calculated a broader average B2B conversion rate, which applies to service vendors, including SaaS. Blue Corona, a web marketing and conversion optimization agency, believes that B2B service vendors should have at least 5%-8% conversion rate to remain competitive. Conversion is defined by the agency as a verified lead, prospects that can be reached via contact information. The study findings are clearly within the mean range of the Marketing Sherpa graph.

Equally significant, the study estimated that a business website should have at least 1,500 visitors a month to measure conversion more accurately. If you have less than a thousand monthly visitors, it’s recommended that you focus on how to drive website traffic before worrying about conversion rate.

Where do leads come from?

HubSpot released a graph in its 2013 State of Inbound Marketing Report showing the top lead sources for B2C and B2B companies:

leads

The report showed that the top three lead channels for B2B are: SEO (14%), email marketing (13%), and social media (12%). On the other hand, the worst three lead sources are: traditional advertising (3%), PPC (6%), and direct mail (6%).

However, the “Other” lead source threw a monkey wrench in this study (the highest bar in the graph). B2B marketers are still unsure where most of their leads come from. The best insight that we can get from this, as CrazyEgg put it, is to understand that when it comes to B2B conversion we don’t have a full understanding of the picture. At the least, we can see that search tops the lead sources with email marketing and social media, while PPC and traditional advertising are at the low end. To that extent, we know which basket to put most of our conversion strategy budget.

Why review sites are a good source of leads

The Google/Millward Brown study found out that buyers are making at least twelve searches prior to visiting a product site like yours. Specifically, the study reported that buyers are comparing products, watching product videos, noting ratings, reading comments and reviews, and only after factoring all these inputs, will they decide to visit a product site that they like. Here’s how the study represented the buying process:

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Take a closer look at top B2B review websites and you’ll realize that the buyers’ actions cited in the Google study are happening on these websites. For example, at a B2B review platform FinancesOnline, you can compare software by different categories (4), read user comments and reviews (10), check product ratings (8), and browse different product videos (6). In short, B2B review sites play along the buying behavioral habits of B2B buyers today.

Here's how a product review page looks like in one of the B2B directories: FinancesOnline.com

Here’s how a product review page looks like in one of the B2B directories: FinancesOnline.com

Another useful role of B2B review sites is in search results. Technically, review sites are classified as media outfits since they provide content as a service, plus they feature helpful articles. In fact, many generic software searches churn out review websites on SERP page one. As with media outfits, review sites are widely used by researching buyers and host a rich content related to B2B topics.

Increase conversion with B2B review sites

Being present in one of top 3 B2B review directories isn’t enough though, considering that your competitors are also on these websites. Instead of being content that you’re published on a review site, leverage your presence there.

Many of these platforms offer marketing tools that help you generate more leads for your website. For example, at FinancesOnline, you can utilize lead-generating services, such as, adding Free Trial and Visit Website buttons on the review page of your softwares. The buttons link the review site directly to your landing pages and will send potential customers to your website.

Likewise, you can have your software featured as a suggested alternative on the pages where your competitors appear.You can also highlight your software in the comparison matrix, at the critical moment when buyers are matching your software against two other competitors. This is a good tactic to undercut the competition’s market. 

Here's how a product can be highlighted when a client is comparing his or her options

Here’s how a product can be highlighted when a client is comparing his or her options

Moreover, you can submit your product to the review panel and get the chance to earn a quality trust mark and special awards based on your software’s key strengths. For instance, the Verified Quality Seal recommends your product for its quality features and your reliability as a vendor. There are also many industry-specific awards and quality certificates that your product can win to distinguish itself from your competitors even further.

These lead-generating tools can tip the balance to your favor. In a tight environment like SaaS, every small advantage that you can get should be optimized.

Takeaways

  • Position your software as a necessity, not an option, the reason why professional services are getting high conversion rates
  • Search is still the leading source of conversion in B2B and media sites and review platforms are one of the highest ranking websites
  • Buyers are making at least twelve searches to read reviews and comments, note ratings, watch videos, and compare products, according to the latest Google B2B study. These buying behavioral trends are present in review sites.
  • Leverage your presence in review sites by utilizing their marketing tools
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