If you’ve just started a new online business or you're looking to increase your marketing to customers, then as you jump into learning about digital marketing, you'll often encounter the term "conversion rate."
This article will discuss what getting a conversion means, what a conversion rate is, and how to calculate it. We’ll also consider why it's essential and how you can improve yours. Let’s get started!
What Is A Conversion?
A conversion, in marketing terms, is when a user completes an intended action on a website. It could be anything from filling out a lead form to buying a product. Other conversion goals include:
- Submitting a contact form
- Downloading an ebook or whitepaper
- Registering for a webinar or event
- Completing a survey
- Watching a video
What Is A Conversion Rate?
A conversion rate is simply the percentage of visitors who complete an intended action to your site. So suppose you have one hundred visitors to your site, and five of them perform an action such as filling out a lead form. In that case, your conversion rate would be five percent.
In other words, a conversion rate is the number of conversions divided by the total number of visitors multiplied by one hundred.
This equation is like conversion in retail. A retail conversion rate is the number of people who leave a store with a purchase divided by the total number of visitors.
Sometimes, you calculate a click conversion rate instead of a website visitor conversion rate. In this case, the calculation is the number of clicks on the conversion button divided by the total number of clicks multiplied by one hundred.
This equation comes in handy when the same visitor clicks on the conversion button multiple times and is often used to test the effectiveness of your call-to-action. The conversion button could be anything from a “submit” button to a "buy now" button.
Why Is A Conversion Rate Important?
The simple answer is that a high conversion rate means more sales and more money in your pocket. But there are other reasons why your conversion rate is vital, too. For example:
- It can help you determine whether or not your marketing efforts are working.
- It can help you measure the effectiveness of your website design and layout.
- It can help you identify which marketing channels are most effective for driving conversions.
- It can help you determine how much to bid on keywords in paid search.
- It can help you calculate your customer lifetime value.
The customer lifetime value is an important metric that measures how much a customer is worth to your business throughout their relationship with you, considering the initial sale and all of the subsequent sales that a customer makes.
The conversion rate helps you calculate customer lifetime value because it tells you how many customers make more than one purchase. Knowing this metric can help you make more informed business decisions about how much to spend on marketing and allocate your resources.
How Can I Improve My Conversion Rate?
There are lots of things you can do to improve your conversion rate, but here are a few of the most effective:
- Make your call-to-action clear and easy to see.
- Make it easy for the customer to convert by making your website easy to navigate.
- Use persuasive copywriting on your landing pages and website.
- Test different versions of your website to see which design converts best.
- Use pop-ups and other forms of solicitation sparingly—too many can reduce your conversion rate.
- Offer incentives such as discounts, free shipping, or a free product for those who convert.
- Optimize your website for mobile devices.
- Make sure your website is fast and responsive.
- Use A/B testing to test different marketing elements on your website. For example, if you have a contact form on your website to bring in inquiries about your business, you can test two different versions of it to see which performs better.
The process of improving your conversion rate is called conversion rate optimization.
Conversion rates are critical for any business, but they can be especially essential for e-commerce businesses.
By taking the time to understand and optimize your conversion rate, you can increase your sales and grow your business quickly. Not only that, but optimizing conversion rates can also give you a deeper insight into your customers and ensure that you spend marketing resources on the right things.