You probably hear all the time how important the series of conversion rates are that make up your business. But can perfecting the mechanics around each step in the funnel really bring your digital identity to the next level?
Or is this just another one of those online marketing buzz words that feeds into internet giants and gets you further way from your best people?
And the answer is, well, a little bit of both. Read more to see how you can can finally use conversion rates the right way.
What is a Conversion Rate?
Your conversion rate is how often visitors to your site perform a desired action, expressed as a percentage. This desired action will vary depending on your industry and your marketing strategy. Some examples of conversions include:
- Downloading an e-book
- Signing up for an email list
- Purchasing a product
Conversion rates can actually be broken down into two categories: macro and micro. A micro conversion is a step towards a larger goal, like putting an item in a shopping cart to be purchased later. A macro conversion is purchasing that item. A micro to macro conversion path could also be signing up for a newsletter and then rsvp’ing to an event advertised in the newsletter.
Within these two categories, there are several types of conversion rates, explained here:
Overall: What it sounds like! The number of visitors to your site who complete one specific desirable action out of all of your website traffic.
Channel: Conversion rate broken down by the different ways a visitor could find your site. For example: did they click on a Facebook or IG ad? A Google ad? A channel conversion rate would be how many users coming to your site via Facebook converted out of all the Facebook traffic.
Ad: There’s a slightly different calculation rate for ad conversions depending on whether your visitors are in consideration, awareness, or conversion. But identifying the most successful one will allow you to focus on disseminating it more widely.
Page: Once you calculate which of your pages converts the most visitors, reroute visitors to that page from the other pages.
Keyword: This relates to SEO. Identifying the keywords with the best conversion rate will shape the content and focus of some of your landing pages.
How do I calculate my conversion rate?
There are three main formulas you can use to find your conversion rate. The one you focus on depends on your industry and the actions you are measuring.
- Total number of conversions/ Total number of visitors x 100
- Total number of conversions / Total number of unique visitors x 100
- Total number of conversions / Total number of leads x 100
So for example: if you had 2,000 visitors to your site in a week and 500 of them donated to your organization, your conversion rate would be 25%, according to formula number one.
In general, you should measure your conversion rate weekly or monthly at the least. As your business grows, you may want to track it more frequently.
How does my conversion rate affect my bottom line?
It’s amazing how a one percent conversion rate can massively increase your profits. Let’s use an example below:
Say we’re selling cute outfits for iguanas with a $50 profit margin.
We’re running a $50,000 ad to generate traffic to our website at $.50 CPC (cost per click). We generate 100,000 visitors to the website. Now let’s examine how much money we would make with a 1, 2, and 10 percent conversion rate:
Some people think they just need to increase the amount of traffic to their site to generate more leads, but this is untrue, as demonstrated by our calculations above. You can substantially increase your leads by simply optimizing your landing pages to engage customers on a deeper level.
Once you’ve invested in some CRO (conversion rate optimization), you’ll be able to:
- Optimize your ad spending
- Calculate profitability
- Allocate resources more efficiently
And the list goes on! So let’s dive in to how we can get our hands on some great CRO.
What is a good conversion rate?
But what IS a good conversion rate? Is there a magic number that I should be striving for, you ask? In this case, I must provide you with the ultimate cop-out answer. It depends.
Based on your industry, you’ll have vastly different ideas of what you want your conversion rate to be. Some industries, such as finance, have naturally higher conversion rates. And it also depends on what kind of conversion rate you’re measuring.
That being said, there is actually some advice that is applicable across the board. The companies in the top 10%, or those achieving conversion rates higher than 90% of other companies, are usually at a conversion rate of 12% across their entire account (as opposed to per landing page.)
Even accounting for industry differences, you want your conversion rate to be between 3-5 times higher than your industry’s average.
What is a good conversion rate?
There are many ways to go about CRO. Here are a few to get you started.
1. Consider your offer
It could be that what you’re offering is simply…blah. A free trial? Blah. A free consult? Blah blah. Get creative with your offers in order to stand out from the millions of free trials your customers could choose from. Give them something different. Not sure what to offer? Ask! Create a form or survey asking customers what they want and use that knowledge to shape your offer.
2. Change the flow
Sometimes visitors will simply abandon your site because it’s overly complicated or you’re asking for too much information before you hand them your product. Try asking for less info, asking for it later in the conversion process, or differentiating your process to segment out the different types of conversions you’re looking for.
3. Optimize your site’s appearance
We’re not telling you to A/B test five different shades of purple buttons. But considering the value of your CTA for example is paramount. Have you ever been presented with an offer to subscribe/click/etc. and been given the choice between “Yes” and “No, I don’t want to save the orphans”? That’s an extreme, but direct CTAs can have a big impact.
96% of visitors don’t convert the first time they visit a site. This is where remarketing comes in. Increasing the amount of “touch points” in your user journey can boost the effects of your advertising tenfold. Stay tuned for our blog on remarketing soon.
5. Test and test and test
Find your top performing landing page and focus on making that one even better rather than creating a bazillion and hoping one of them works. It’s the same philosophy behind CRO in general: work smarter, not harder. Focus on the traffic you already have.
I know this is a lot, but the best thing you can do TODAY to start on your CRO journey is to set up conversion tracking on your Website. Google Analytics is the best choice, and you can check out our beginners guide to GA here.
Once you’ve got the data, start using it! Once you start tracking your conversion rates, you’ll never look back.
This guide will be here when you need it to help you through your initial understanding of conversion rate optimization. Take it slow, and you’ll be an expert in no time. Happy Advertising! ☺
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