Understanding Conversion Rate
What is Conversion Rate?
Conversion rate is a metric companies can use to track how many customers completed the desired goal after visiting the site. “Conversion rates are calculated by taking the total number of users who ‘convert’ (for example, by clicking on an advertisement), dividing it by the overall size of the audience and converting that figure into a percentage” (Adjust, 2022). The desired goal can vary depending on the company. Some examples of desired goals include making a purchase, viewing an advertisement, or filling out a form. According to Main Street ROI, Conversions rates matter because they can:
· Conversion rates can predict success or failure
· Better conversion rates can save you money
· Focusing on conversion rates will improve your website
(Main Street ROI, 2022)
A great example of using conversion rate is a case study that was done on Majestic Wines. Majestic Wines, “redesigned their web page almost exclusively based on user feedback and surveys” (Suttida, 2017). After running many surveys, Majestic Wines found that their web pages were visually distracting for customers. So, Majestic Wines got together and redesigned their website by reducing the clutter and creating a minimal space that focused mainly on their services. As a result, “A 201 percent increase in conversions for their inquiry form submission KPI” (Suttida, 2017). Majestic Wines listened to what their customers wanted which allowed them to improve their conversion rate by 201 percent.
The average conversion rate can vary depending on your niche and target method. According to Adoric, “The average rate is between 1 percent and 3 percent” (Adoric team, 2021). This number might sound low but there are a lot of people that will visit a site without making a purchase, clicking on an advertisement, filling out a form, etc. Think about the last time you went to a site and exited out immediately; it happens a lot! “Let’s say you have 100,000 visitors and your conversion rate is 3 percent. This means about 3,000 of your visitors are making a purchase” (Adoric Tem, 2021). Conversion Rate is one of the most important metrics to keep track of because conversion rate is a measure of how often you meet your goal. Without a good conversion rate, it’s likely that your overall sales aren’t great.
This graph from 2018 shows what industries had the highest conversion rates. According to Smart Insights, the industries with the top conversion rates in 2018 were business consulting, travel, and vocational studies & job training. Those industries might be more successful than others because usually if someone is browsing the internet with those topics in mind it is likely that they are looking to make a purchase immediately.
Companies with good conversion rates are always testing their website to make changes and updates when necessary. According to Wordstream, “Companies whose conversion rates improved last year are performing, on average, 50% more tests and using 47% more methods to improve conversion” (Lister, 2021). Companies that don’t test and understand their target market are likely to see a decrease in their conversion rates. Overall, understanding what a conversion rate is and how to measure it can significantly help a business stay on track with their goals and keep their customers happy.
References
Adjust. (2022). The Adjust Mobile Measurement Glossary. https://www.adjust.com/glossary/conversion-
Adoric. (2021). What is a Good Conversion Rate and How to Improve It. https://adoric.com/blog/what-is-
Jones, R. (2018). Which industry has the highest conversion rate? Smart Insights.
https://www.smartinsights.com/conversion-optimisation/which-industry-has-the-highest-
Lister, M. (2021). 33 CRO & Landing Page Optimization Stats to Fuel Your Strategy. Worstream.
https://www.wordstream.com/blog/ws/2017/08/02/conversion-rate-statistics
Main Street ROI. (2022). Marketing 101: Why Conversion is Key to Your Success.
https://www.mainstreetroi.com/marketing-101-why-conversion-is-key-to-your-success/
Suttida. (2017). 10 Conversion Rate Optimization Examples to Copy. https://suttida.com/10-conversion-
Hello Alexa!
ReplyDeleteThis is a great overview of how a conversion rate can provide valuable information to a company. The case study you referenced was smart to use surveys in order to find out what was causing their conversion rate to be lower than they would have liked. If a company is seeing low conversions rates, the best way to figure out what is causing customers to turn away is to go right to the source. By changing their website to fit the needs and likes of the consumers, this help a company improve their conversion rate overall.
This is a great post Alexa! I love the graphics. I love how you mention the sites with the top conversion rates. That is a good idea
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