What is Conversion Rate?, conversion rate
The conversion rate is basicly the percentage of visitors that complete a desired action (call to action) on your web site or application. As understood from its name, this important marketing metric indicates the desired actions you want your visitors to take. As there are many points throughout the sales funnel, conversion rates may differ. For example, if you are interested in lead generation you can specify newsletter signups as conversions, while add to cart can be another conversion metric focused on sales. However, all conversion rates refer to the same ultimate goal of businesses: producing sales. Each of these conversions make your visitors one step closer to being a customer. Common conversions can be submitting a form, signing up, downloading whitepaper and bulletins, making a purchase, etc.
The simple calculation of conversion rate is:
Conversion Rate = Number of visitors took the call to action (CTA) / total number of visitors.
However, as business goals differ across industries, it is best to search for industry averages first. 3% conversion rate may be seen as perfect for car industry, while it may sign a problem for electronics industry.
Importance of Tracking Conversion Rates
Tracking conversion rate is important for 2 main points: to assess effectiveness of your marketing efforts and performance of your website. Conversion rates can be general or specific according to your needs. For example, you can track overall conversion rate to understand how much your website generates, in this case converts, traffic or track keyword conversion rate to decide which keyword to separate budget when advertising. Overall, each conversion rate shows the performance of your online marketing efforts. Assessed right, conversion rates help you to make right decisions throughout your online marketing process and take better actions.
There is no certain good conversion rate, as there are many important factors such as size of your data set, chosen timeframe and industry characteristics. After searching for industry averages, actual conversion rates must be assessed with ROI as well. At the end of the day, high click rate doesn’t mean anything if they don’t convert to purchases. ROI of the marketing campaigns actually helps to interpret the conversion rates since it shows the effectiveness and profitability.
How to Increase Conversion Rate?
There are 2 steps to increase the conversion rates: first, evaluating the offer given to visitors. It is a critical starting point, since a non-attractive offer or call to action (CTA) may be the simple cause of low conversion rate. The second step is designing and optimizing website or landing pages to improve conversion rate. The process is called conversion rate optimization. Conversion rate optimization actually helps to convert the traffic you already have, which in turn leads to more revenue or less marketing spending.
1. Landing Page Creation
To compete in highly competitive online market, businesses have so little time to show their unique values&offers. If your marketing efforts include paid advertising on different platforms, you should meet your paid traffic in a landing page that is created spesifically for them instead of your homepage. In this way, the traffic coming from paid advertisements can engage with your business without losing interest.
2. Building Hypothesis
When optimizing conversion rates, it is important to look at how well your website or application is designed. Apart from the offer, the website design also affects the actions your visitors would take. By building hypothesis about why the chosen conversion rate might be low, you can start to take actions to improve the conversion rate. For example, more apparent call to action or signup buttons might be needed. Overall, you should come up with potential reasons of any low conversion rate and come up with relevant implementations, such as catchy media, significant buttons, user friendly interface, etc.
3. A/B Testing
Last but not least, A/B testing helps to interpret the effectiveness of all conversion rate optimization efforts. First, set up two different versions of any element on your website such as headlines, call to action buttons, font sizes, colors, etc. and split your traffic between these versions. A/B testing basicly supports the evaluation of the hypotheses built on low conversion rates. If the control variant that includes the potential changes indicates higher conversion, then you can implement these changes to your website.
There are many online tools to track conversion rates and support conversion rate optimization efforts businesses can use. Although it may seem time-consuming and effortful process at first, conversion rate tracking and optimization are actually complementary steps of all online marketing process. Online marketing efforts are measurable but to gain competitive advantage, businesses must also take action based on the results they get. With conversion rate tracking, businesses can focus their marketing campaigns on most profitable areas and optimize what they already have. With the increasing use of technology, digital competition is taking place in every little action the potential customers take. While AI is becoming widespread in marketing world, businesses have also chance to collect and interpret personalised customer habits in their own unique ways. Understanding the customer and directing the marketing efforts towards what they want is the key to winning in online business world.