The concept of conversion rates has long been on marketers’ radar. After all, your online marketing efforts should aim to increase the number of paying customers. This is why, as a tell-all KPI for digital marketers, conversion rates have become a crucial metric.
To help you navigate the concept of conversion rates, this article covers everything you’d need to know to optimize them.
What Is a Conversion Rate? What Are the Different Types of Conversions?
Amongst other marketing metrics, the definition of conversion rate is straightforward. Conversion rates refer to the rate at which customers (or website visitors) complete the desired action.
The actions that constitute conversions depend on what you are seeking from customers on particular pages. There are many types of conversions companies may want to assess; purchases aren’t the only useful conversions.
Examples of conversions can be: turning a search engine user into a website visitor, newsletter subscriptions, obtaining contact information, and making occasional customers become regular ones. What you classify as a conversion rate depends on your company goals and the marketing funnel you focus on.
The ultimate goal of all conversions is to turn potential customers into actual ones.
Why conversion rate an important thing to measure?
The value of your conversion rates spans beyond sales and a higher ROI. It could be a signifier of something more. One of the reasons why conversion rates matter is because conversion rates can help you determine long-term success. You can use conversions for insights into which parts of your business or website are generating the most conversions. This can provide you insight into which aspects of your business or campaign you need to work on.
Additionally, focusing on optimizing conversion rates can save you money. Knowing what works and what doesn’t work can help you divide financial resources more effectively. As such, you can stop spending money on activities that don’t generate conversions. This allows you to invest more money on novel marketing tactics, campaigns, and A/B testing. As such, understanding your conversion rates across your funnel can help you create a more effective strategy.
How Do You Measure Your Conversion Rate?
As mentioned before, conversion rates dictate what proportion of your visitors have converted. You can calculate this using the following formula:
Conversion rate (%) = (number of conversions / total website visits) * 100
To put this formula into perspective, say you’re trying to assess newsletter subscriptions. If you’ve had 50’000 visits on your newsletter landing page and 5’000 people signed up to your newsletter, then the conversion rate would be:
(5’000 / 50’000) * 100 = 10%. Out of this 10%, a proportion may go on to buy your product or service. This would need another conversion rate computation.
What should your conversion rate benchmark be?
When discussing desired conversion rate, it’s understandable to want all your website visitors to convert. Yet, this is highly dependant on factors such as the industry, country, medium, and traffic source you’re working with.
To give you an idea of the different conversion rates and how they vary, we’ll look into benchmarks across these factors. When considering industry-focused benchmarks, Growcode’s 2021 e-commerce data reveals these differences. For example, sales conversions span from 0.99% in the “Baby & Child” sector to 3.79% in the “Arts and Craft” sector.
Moreover, you should take into account the country you’re selling to. For example, Germany’s average conversion rate stands at 2.22%; meanwhile, Italy lags behind at only 0.99%. As such, it’s important to adjust your desired conversions based on language and country specifications. This can help you manage your expectations.
Additionally, different devices have different benchmarks for conversion rates. It’s worthy to note that conversion rates on desktops, tablets, and smartphones have their differences. For example, desktop conversion rates are almost double those of smartphones, and conversion rates on tablets come in second place.
Additionally, take a look into where your traffic comes from. This gives you insight into which traffic sources perform best, allowing you to place your resources into the most promising traffic sources. For example, according to Growcode’s research, referral and email have the best median conversion rates at 5.7%, while social media performs worst at 0.7%.
Having to take into account all these factors means that setting benchmarks for conversion rates can be challenging. Yet, the different factors can give you insight into your own performance relative to other companies.
Given all these nuances in conversion rates, the optimal conversion rate is the one that tops your current one.
How to improve your conversion rates
1. A/B Testing
Increasing your conversion rate doesn’t have to be difficult if you’re willing to innovate. One way to improve the conversion rates on your website is through A/B testing at different parts of the funnel. This may involve testing different headlines, means of navigation, media, and layouts.
Not sure which area of your website to run tests in? Consider what revenue each test in different areas may bring. This may help narrow down your options and distribute your resources most efficiently. Yet, remember only to test one hypothesis at a time. This can help you gain an understanding of which test makes an impact.
2. Increasing Trust
Potential customers may have hesitations when it comes to purchasing your product. This may create friction in the sales funnel. To decrease potential mistrust, address customer objections by alleviating possible concerns.
This may involve a little convincing on your part. Consider what hesitations your consumers may have and start by addressing these. This can require you to explain how your product or service alleviates pain paints, showcase your authority, and emphasize the value provided.
Another facet of trust includes social proof. This involves highlighting reviews, testimonials, case studies, and logos on your website. These can help put potential consumers’ minds at ease. As no one wants to feel like a brand’s first customer, adding these elements to your website can diminish uncertainty and increase trust.
Additionally, it’s important to address more granular details as well. Outdated websites, spammy links, and a lack of money-back guarantees can also harm consumers’ trust, consequently decreasing their willingness to purchase. Thus, addressing such details is essential.
3. Optimizing Your Call-to-Actions
When trying to generate conversions, create a sense of urgency by emphasizing (and tweaking) your CTA. There are three types of CTAs you can A/B test with: buttons, simple text, and more complex designs (using CSS or images). Consider adding these to relevant pages, reinforcing them throughout the website, and using compelling language.
Increasing your conversion rate may seem overwhelming. If you’ve never focused on it before, it can take a lot of time, resources, coordination, and internal organization. Yet, by leveraging the power of A/B testing, optimizing your website, and tweaking your copy, you can position yourself for success.
If you’re unsure where to start, you can seek help from external conversion rate optimization agencies. The right agencies have the expertise, software, and tools to help you optimize your conversion rate, ultimately increasing your ROI.