What is conversion rate?

Conversion rate is defined as the percentage of prospective or active users who complete a desired action. While completing a purchase is the most common conversion analyzed by digital marketers, “conversion” can also refer to email signups, form submissions, reviews left, or any other call to action (CTA) defined by a campaign. 

Why conversion rate is important?

Conversion rate is an important data point because it is a clear indicator of the success of any campaign, and is one of the most common key performance indicators (KPI) for judging the efficacy of marketing efforts.

How to Calculate the Conversion Rate?

Conversion rate is calculated by dividing the number of conversions by the number of potential conversions and then multiplying by 100 to express the result as a percentage. For example, if a product page receives 2,000 visitors in a month, and the product is purchased 20 times, the conversion rate would be calculated by dividing 20 by 2,000 (.01) and then multiplying by 100 for a conversion rate of 1%.  

What are the main factors that affect conversion rate?

There are many factors that can affect conversion rate, and only some of them are under a brand’s control. It is important to remember that a mobile audience is nearly always engaging with content while doing something else, so conversion efforts need to be incredibly clear in their value proposition and then provide a smooth path to conversion y eliminating any obstacles along the way. 

Although sales are just one type of conversion, they give strong insight into the main factors that affect conversion rates across channels. The top three reasons for cart abandonment are that extra costs (such as tax, shipping, and processing fees) are too high, needing to create an account to purchase, and that the checkout process was too long or complicated. These speak directly to common factors that work against conversions such as anxiety, confusion, and frustration. In order to increase conversion rate, any campaign should prioritize: 

• Clarity- Make sure that your value proposition is clear and that your audience has all the information they need in an easily accessible format. 

• Ease- The checkout process should be as smooth and quick as possible. 

• Assurance- providing social proof in the form of reviews and ratings, having a generous return policy, and an approachable copy can all help ease anxiety.

What’s a good conversion rate?

There is no standard for a good conversion rate that is consistent across industries and context, so it is best to compare your campaigns to similar ones whenever possible, taking into account factors such as location, audience, scale, industry, etc. Here are a few to start with:

Email campaigns: 2%

eCommerce: 3%

Google Ads: 5%

Landing pages; 2%

Food and Drink 5%

Wellness eCommerce; 4%

How to improve your conversion rate?

Improving conversion rate is often the result of multiple strategies, campaigns, and departments working together, and in some ways driving conversion rate could be the goal of an entire company. On a smaller scale however, there are some proven strategies for improving conversion rates. 

• Find Your Audience - It doesn’t matter how strong your message is if it’s not getting to the right people. 

• Focus on Clarity - In order to drive a desired action it needs to be absolutely clear what the action is, and why your audience would benefit from doing it. 

• Streamline the Journey - Once you’ve made your value clear to your audience make it easy for them to take action. (Stories are an ideal tool for this!)

• Troubleshoot technical issues - slow loading times, confusing checkout flows and processing errors can make users quickly abandon a purchase or sign up.