The number of competitors who provide the same services or products as you do matters. Without starting an excellent treatise on market forces here, let’s connect two parameters: the number of competitors versus homogeneity (the degree to which they are similar to you).
1.Many competitors + homogeneous services
We all want to stand out, but if you’re sincere: how different are you? You can buy the same products at all supermarkets. They hardly differ when I want to buy food products for my business.
So many competitors are all more or less the same: your average conversion rate is often a lot lower than 50%. Rather between 10 and 25 percent. Are you higher? Then you are lord and master of the market. Are you below 15%: get to work on bid management; the competitor is running away with your customer?
2.Few competitors (max 3) + homogeneous services
Your customer isn’t happy about this. Because they have little to choose from. We all want to stand out, but if you’re sincere: how different are you? KPN and Vodafone are different companies, but to a customer, they are not. They hardly differ if I want to buy mobile phones for my business.
Here it would be best if you aimed for more than a 50% average conversion rate on your offers because only then will you outperform your competitor.
3.Many competitors + non-homogeneous services
The market is then still growing but already entirely developed. That means the customer has something to choose from. Here, your conversion rate is unlikely to reach 50%. The lower limit here is as much as 30%. If you get less than that, you are not good enough to explain what the customer should expect from you (or the customers don’t want it, but we won’t assume that).
4.Few competitors + non-homogeneous services
This market is somewhat dangerous for your conversion rate. This market is still immature, and thus the customer hardly knows what he should be asking for. Conversely, if you respond to a long-standing problem but with a different solution, that raises questions from the customer.
In this market, conversion rates are often meager. Companies issuing RFPs almost always look for certainty. Not to mention tenders. We advise answering as few RFPs as possible and focusing mainly on “normal” sales activities.
Do you get more than 25%? Then you’re sitting on a gold mine. Develop further in bid management as competition is on the way…
To understand your conversion rate well, it is essential to know some market data. With this market data, you can determine for yourself whether your conversion rates are reasonable or not.
Track your conversion rate over more extended periods. You can then see how it develops over time