A conversion happens when a website visitor accomplishes an action that brings value to the business, such as clicking on a link, filling out a form, and making a purchase.
To gauge the success of campaigns, marketers will track different metrics, including the percentage of users that complete the desired action. This is called conversion rate.
What Is Conversion Rate?
A conversion rate refers to the percentage of website visitors that complete a conversion goal. Any action counts as long as it fulfills the campaign’s goal. Some common examples of conversion goals include:
- Downloading a free e-book
- Subscribing to a newsletter
- Answering a survey
- Leaving a comment
- Subscribing to software
- Hiring a service
- Buying a product
Actions that directly affect a company’s revenue, such as sales and quote requests, result in macro conversions. As for actions that don’t directly impact revenue growth, like surveys, feedback, and social media comments, they lead to micro conversions.
Alongside other important metrics, the conversion rate lets marketers gauge the performance of their campaigns. The higher the conversion rate, the more effective the campaign is at converting prospects to leads or customers.
Globally, the average e-commerce conversion rate ranges between 1% and 4%. These figures vary across regions, countries, seasons, devices, as well as marketing strategies. For example, in the second quarter of 2021, the average conversion rate in the US was 2.8%. In Great Britain, the average was at 4.4%.
What Affects the Conversion Rate?
Several factors affect a marketing campaign’s conversion rate. Understanding these factors should enable businesses to maximize the performance of their campaigns.
Identifying the areas where the conversion rate can be improved will help the business generate more sales with the same amount of traffic.
Say, a business spends roughly $2,000 monthly to acquire 700 unique website visitors. Marketers can get twice the value of their ad spend if they can double the conversion rate. Or, they can reduce their ad spend and still accomplish their conversion goals.
Here are a few factors that influence the conversion rate:
- Value proposal
Every campaign must have a unique value proposition to drive conversions. This is the value that the business promises to deliver to its consumers.
A solid value proposition should explain what the product or service is, what benefits it brings, and what makes it different from the competition. It should be clear, straightforward, and concise. It should also be compelling and urgent to motivate the prospect to take action.
- User experience
High-quality user experiences can drive more conversions. With minimal online obstacles, businesses can ensure a seamless buyer’s journey and guide their visitors towards converting. They can generate leads and convert visitors to paying customers.
A responsive and mobile-friendly web design can make a website navigable and accessible across a broad range of devices. It ensures high-quality user experiences for whoever visits the website.
- Page load time
Faster page speeds can help minimize customer drop-offs. Modern consumers can wait for about two to three seconds for a landing page to load. If the page load time takes longer than that, visitors will often abandon the site.
How to Calculate Conversion Rate
Knowing how to calculate the conversion rate is important in marketing because it tells marketers how effectively their campaigns are performing.
To calculate a campaign’s conversion rate, take the total number of conversions and divide it by the total number of unique visitors. Then, multiply the decimal number by 100 to get the percentage. For instance, a business receives 1,000 conversions from 2,000 interactions, their conversion rate would be 50%.
If marketers have multiple conversion goals, then they will have to track and measure each one individually.
Here are different variations of the formula:
- Conversion rate = (total number of conversions / total number of unique visitors) x 100
- Conversion rate = (total number of conversions / total number of new subscribers) x 100
- Conversion rate = (total number of conversions / total number of leads) x 100
The ideal formula depends on the business’ end goals. The numerator measures the total number of conversion goals generated within a specific timeframe, while the denominator measures the total traffic.
Conversion rates can be calculated manually or using an online tool. Many modern advertising and analytics platforms like Google Analytics, Google Ads, and Facebook ads can calculate the conversion rate for marketers.
