Whether you’re new to the ever-evolving world of digital marketing or trying to boost the performance of your marketing campaigns, learning about conversion rates is of the utmost importance.
So, what is the conversion rate in digital marketing? Why is it important? And how do you calculate conversion rates? This quick guide will answer all your burning questions, so stick around!
- The conversion rate is the percentage of visitors that complete the desired action on a website.
- The action can be anything from making a purchase to subscribing to a free trial.
- Conversion rates are key indicators of campaign performance. A high conversion rate means that the campaign is effective in bringing visitors closer to becoming customers.
- There are various factors that affect conversion rates, such as industry, product type, and sales cycle length.
- There are several ways to improve conversion rates, including adding reviews and testimonials, using dynamic calls-to-action, focusing on pain points and solutions, and offering incentives.
- What is a Conversion Rate and Why is it Important?
- How to Calculate Conversion Rate
- High vs. Low Conversion Rates
- Five Tips That Can Improve Your Conversion Rate
- The Takeaway
What is a Conversion Rate and Why is it Important?
Your conversion rate is the percentage of visitors that complete your desired action on your website. The action linked to a conversion can be anything from making a purchase or registering on a site to submitting a form or subscribing to a free trial.
To put it differently, the rate of conversion is the percentage of responses to your call to action (CTA), whether it’s a direct or indirect response.
Your campaign’s conversion rate is a key indicator of its performance. If it’s high, it means your campaign is effective in bringing visitors a step closer to being customers. It’s worth noting that when a visitor converts, you’ll be able to target them more effectively because they should now be in your Customer Relationship Management system (CRM).
On that account, generating more conversions should be at the top of your priorities as a digital marketer. You can do so by using Conversion Rate Optimization strategies (CRO).
How to Calculate Conversion Rate
To calculate the conversion rate, all you need to do is divide the number of conversions by the total number of visitors. Then, you multiply the result by 100. Here’s the equation:
Conversion rate = (the number of conversions / the number of total visitors) x 100
For example, let’s say you’re running an email marketing campaign that’s targeting 50,000 customers, and 5,000 out of those 50,000 recipients respond to your campaign’s CTA.
You can calculate the conversion rate by dividing 5,000 by 50,000 and then multiplying the result by 100. The conversion rate measures up to 10% in this example.
You’re probably wondering, “Do I need to carry out calculations every time I want to know my conversion rate?” The answer is no.
Most, if not all, online advertising platforms like Facebook Ads and Google Ads highlight your conversions in their interface, along with other meaningful data. The same is true with most analytics platforms, such as Google Analytics.
High vs. Low Conversion Rates
Conversion rates vary among industries. For example, in one industry, a 5% average conversion rate might be low. Meanwhile, it might be an excellent rate in another industry.
An example of an industry that tends to have a low website conversion rate is the industrial equipment industry. Alternatively, an industry that tends to have high-performing websites is the electronics industry.
Generally speaking, the more significant the purchase and the longer the sales cycle, the lower the conversion rate will be. This is evident in businesses like car dealerships, where the product (car) costs a lot and might require several loans to cover the cost.
Now, if you look at a clothes store, where most of the products are relatively affordable and easy to attain, you’ll notice higher average conversion rates compared to the car dealership.
So, to determine if your conversion rate is high or low, you have to do some research that’s specific to your industry. You can’t compare cars to clothes and expect an accurate assessment.
Five Tips That Can Improve Your Conversion Rate
Now that you know what conversion rates are in the digital marketing world and how you can calculate them, it’s time to talk about how you can improve them.
1. Add Reviews and Testimonials
Word-of-mouth recommendations, which come in the form of reviews and testimonials in the world of digital marketing, can be highly effective in boosting your conversion rate.
Reviews and testimonials make your product or service come across as less risky compared to similar products within your niche. So, you should certainly add some reviews to your website.
2. Use Dynamic Calls to Action
Another way to increase your conversion rate is to make your calls to action more compelling and dynamic. This can be done using action verbs such as “Sign Up,” “Join,” and “Buy” on your landing pages.
Another way to make your CTAs more dynamic is to phrase them in a way that reflects the visitor’s point of view. A good example would be replacing the typical “Sign Up” CTA on your landing page with something along the lines of “Sign Me Up!”
3. Use Fewer Form Fields
If you’re trying to get more leads and sign-ups, you should make sure that your forms aren’t exhaustive. If your forms have too many fields, website visitors are more likely to bounce. So, keep form fields at a minimum. Also, make sure they’re easy to fill through mobile devices.
4. Focus on Pain Points and Solutions
If you’re looking to increase your conversions, you have to convince unique visitors that your product or service can help them overcome the struggles they might be facing.
The way you do that is by focusing on your target audience’s pain points. These pain points are the link between your product and potential customers.
5. Make Use of Incentives
Using incentives such as coupons and bonus downloads can be pretty enticing, as they trigger the fear of missing out in your visitors. This is a powerful online marketing strategy to use.
However, different industries have different types of incentives. So, you need to figure out the types of incentives that’ll resonate with your target audience.
Your conversion rate is the rate of visitors that fulfill the desired conversion events, whether they involve purchasing a product from your eCommerce site, filling out a form, subscribing to a service, or even engaging with your online chat.
To figure out your conversion rates, all you have to do is divide the number of conversions by the number of total visitors. You then multiply the result by 100. It couldn’t get any easier, right?