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.
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.
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%.
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:
There is no standard for a good conversion rate that is consistent across industries and contexts, 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%
Google Ads: 5%
Landing pages; 2%
Food and Drink 5%
Wellness eCommerce; 4%
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.