Conversion rate—sounds more like a religious metric than a marketing term, but it’s a crucial indicator of your advertising campaign’s success. Unlike click-through rate or cost-per-click, conversion rate gauges your marketing’s effectiveness in getting people to take desired actions, also known as “converting” in the marketing realm. Higher conversion rates signify superior marketing performance.

Join us in this article as we unravel the concept of conversion rate, guide you through its calculation, and, most importantly, offer insights on enhancing your conversion rate.

What is Conversion Rate?

In essence, your conversion rate represents the percentage of visitors to your website or landing page who perform a desired action. Depending on your business objectives, a “conversion” can encompass various actions, including:

• Making a purchase
• Submitting a form (e.g., contact us, lead gen)
• Calling your business
• Engaging with your online chat
• Signing up for a subscription (free or paid, like a newsletter)
• Registering on the site
• Downloading content (software trial, eBook, mobile app, etc.)
• Utilizing a feature (new/advanced feature on your software or app, using the software/app for a specific duration)
• Upgrading their service
• Engaging with your site in some way (time on site, repeat visits, number of pages visited)

While there are numerous other potential conversion actions, this list provides an overview of what a “conversion” entails—a measurable action that propels a potential customer towards becoming a valuable paying customer.

How Do I Calculate Conversion Rate?

Now, you may be pondering, “What if the same person converts multiple times? How does that affect my conversion rate? Should I count that as one conversion or multiple conversions?”

These are excellent questions. To tackle the “total conversions vs converting visitors” dilemma, marketers employ different terms for each scenario.

As discussed earlier, the conversion rate is the number of conversions divided by the number of visitors. To determine the percentage of visitors who converted, regardless of the frequency of conversions, you divide converting visitors by total visitors and multiply by 100%. This is commonly referred to as your “click conversion rate.”

Click conversion rate = (converting visitors / total visitors) * 100%

While many businesses find their conversion rate closely aligning with their click conversion rate, we’ll concentrate on conversion rate in this article. However, click conversion rate can be useful when dealing with numerous repeat conversions and aiming to ascertain the percentage of actual visitors converting.

Obtaining Meaningful Data

When calculating your conversion rate, consider the quality of your data. For instance, a campaign or page boasting a 100% conversion rate may seem impressive until you realize it had only one visitor.

It’s challenging to trust results with a small traffic sample. If 5% of 20 people convert on your site, and one conversion was accidental, your page may not be performing well. Conversely, if 5% of 10,000 people convert, and 5 conversions were accidental, your conversion rate drops slightly from 5% to 4.95%, providing more reliable data.

Due to the inherent randomness in every traffic source, assessing conversion rates effectively involves using a sufficiently extended timeframe. While many marketers prefer a month as a standard timeframe, larger sites like Wal-Mart might find a day sufficient, whereas sites with limited monthly visits might require six months for a comprehensive understanding of conversion rates.

What is a Good Conversion Rate?

Conversion rates vary significantly based on traffic quality, industry, business type, the product or service being sold, and the specific conversion action tracked. While general conversion rate statistics exist, what qualifies as a good conversion rate for your business depends on your unique circumstances.

Moreover, it’s crucial to differentiate between a conversion and a purchase. Although conversion rate is a valuable metric, the primary goal of marketing is usually to generate sales. For instance, if you’re a law firm with a $3,500 average revenue per new paying customer and a 50% profit margin, a campaign’s success may not solely hinge on its conversion rate.

Consider two campaigns with different conversion rates but similar return-on-investment (ROI) and return on ad spend (ROAS) values. In this case, the campaign with a lower conversion rate might still deliver a higher ROI, emphasizing the importance of considering both conversion rates and financial outcomes to gauge the effectiveness of marketing efforts.

In essence, while conversion rate data is beneficial, it offers only part of the story. A seemingly “good” conversion rate may not be advantageous for business if those conversions fail to translate into sales. For a comprehensive understanding of tracking and optimizing ROI and ROAS.

Conversion Rate Tracking

Although conversion rate may not serve as the ultimate metric for success, it remains a valuable tool for monitoring performance. To calculate your conversion rate, it’s essential to track conversions.

As mentioned earlier, with a bit of additional effort, you can directly monitor conversions within most advertising and analytics platforms.

While a detailed guide on implementing conversion tracking for various conversions and platforms is beyond the scope of this article, here’s a quick reference list for several prominent platforms:

• Google Ads
• Google Analytics
• Facebook Ads (includes Instagram Ads)
• Twitter Ads
• Pinterest Promoted Pins

Setting up conversion tracking is most straightforward with the assistance of a proficient developer, but justify the investment. Understanding your results is crucial for improvement, and without tracking the outcomes of your online marketing efforts, distinguishing between successful and ineffective strategies becomes challenging.

The encouraging news is that tracking and utilizing your conversion rate place you in a relatively exclusive group of online marketers, providing a significant competitive advantage. In audits of over 2,000 Google Ads accounts, blogmarketing found that 42% of Google Ads advertisers are not tracking any conversions.

This statistic emphasizes the significance of good conversion tracking. Additionally, of the 58% of Google Ads advertisers who are tracking conversions, only half have effective conversion tracking in place—tracking that facilitates meaningful improvements in online marketing.

If your competitors lack robust conversion tracking, they are unable to optimize their campaigns for maximum profitability. Conversely, with effective conversion tracking, you can fine-tune your campaigns and surpass the competition. Hubspot’s State of Inbound report underscores the importance of good analytics, revealing that 97% of inbound marketing campaigns fail without them. Consequently, if you leverage conversion tracking and utilize the data effectively while your competitors do not, you position yourself for long-term success in the competitive landscape.

Conversion Rate Optimization

Understanding what a conversion rate is and how to monitor it is one thing, but the real question is, what actionable steps can you take with your conversion rate data? More importantly, how can you enhance your conversion rate?

Enter Conversion Rate Optimization (CRO), a process dedicated to refining your landing page and website to generate more conversions from your existing traffic!

The beauty of CRO lies in its ability to maximize the potential of your current traffic. Consider this: even without increasing your site’s traffic, elevating your conversion rate from 1% to 2% effectively doubles your conversions.

Can you now appreciate why CRO is an indispensable component of your online marketing strategy? Neglecting to optimize your conversion rate essentially translates to wasted resources and missed opportunities.

Testing Your Website

Engaging in any form of paid advertising, be it through Google Ads, Bing Ads, or others, necessitates directing your traffic to a dedicated landing page. The advantages of this practice are numerous, with the foremost being page optimization. When investing in acquiring traffic for your site, it’s crucial to guide them to a page meticulously crafted for selling.

Furthermore, landing pages offer the most straightforward avenue for implementing Conversion Rate Optimization (CRO). If you’re currently directing your traffic to your homepage, this is where you should initiate improvements. To delve deeper into landing page creation and testing tools, refer to this comprehensive blog post.

1. Create a Dedicated Landing Page

When engaging in any form of paid advertising, such as Google Ads or Bing Ads, it’s imperative to direct your traffic to a dedicated landing page. This approach is underscored by several compelling reasons, with page optimization being the foremost consideration. When investing in acquiring traffic for your site, it is essential to guide visitors to a page explicitly designed for effective selling.

Additionally, landing pages provide the most straightforward platform for implementing Conversion Rate Optimization (CRO). If your current strategy involves directing traffic to your homepage, initiating improvements in this aspect should be your initial focus. For a more in-depth understanding of landing page creation and testing tools, refer to this informative blog post.

2. Come Up With a Hypothesis

Every effective Conversion Rate Optimization (CRO) test commences with the formulation of a hypothesis. Constructing this hypothesis requires making informed predictions about which elements on your site wield the most significant influence on your conversion rate and overall profitability.

Here are several key areas to consider initially:

1. Headline: The headline is a critical selling point, as approximately 80% of your audience may not progress beyond it. Even if you choose to test only one element, make sure it’s your headline.

2. Offer: Recognize that your audience may not respond as expected. Experiment with diverse descriptions and layouts to identify what resonates most effectively with your potential clients.

3. Call-to-action (CTA): Similar to your offer, finding the right CTA might require multiple tests. Experiment with more descriptive CTAs or vary button sizes to determine the optimal configuration.

4. Media: Sometimes, a new image or video can have a transformative impact.

Once your hypothesis is formulated, and you have two page designs for evaluation, initiating and running your test becomes the next step.

3. A/B Test

The most straightforward approach to initiate Conversion Rate Optimization (CRO) is through A/B testing. While multivariate testing is an option for those drowning in traffic, for the majority of companies, A/B testing proves to be the simplest and most efficient method.

Executing an A/B test involves creating two distinct variants of a page and dividing your traffic evenly between them. Variant A receives half of the traffic, while variant B receives the other half.

To accomplish this traffic split, you’ll need the assistance of CRO software. For those dedicated to CRO, there are excellent albeit costly options for A/B testing. However, if you’re just starting, here are some more budget-friendly alternatives to explore:

• Google Optimize: This tool is free, making it an accessible choice for testing. Keep in mind that it lacks real-time results, which may not be suitable for everyone.

• Unbounce: Ideal for A/B testing landing pages, Unbounce is a powerful and user-friendly system facilitating the quick creation and testing of various landing pages.

• Optimizely: Although pricier than Google Optimize, Optimizely offers additional features providing enhanced CRO insights.

• Visual Website Optimizer (VWO): Slightly more economical than Optimizely, VWO boasts an intuitive interface, making it one of our preferred CRO platforms at Disruptive Advertising.

Each of these testing platforms empowers you to experiment with different versions of your website or landing page and determine which version yields the optimal conversion rate.

Testing Your Traffic

Besides evaluating your website, an effective strategy for enhancing your conversion rate involves examining your incoming traffic. While this may not be feasible if the majority of your traffic is derived from organic Google search results, it becomes a viable option when conducting pay-per-click campaigns. In such campaigns, you possess substantial control over the type of audience visiting your site or landing page and the motivations behind their visit.

This holds significant importance since even a flawlessly designed page may fail to convert the wrong type of traffic. So, how can you ensure that you direct the appropriate traffic to your landing page? Consider these four factors.

1. Do Your Homework

Before delving into ad copy or landing page creation, it’s crucial to conduct thorough research on your target audience. Consider the following factors:

1. Past Advertising Experience: Reflect on previous engagements with this segment. Understand what tactics proved effective and what didn’t.

2. New Audience Exploration: If this audience is unfamiliar, engage with individuals from your target demographic. Share a couple of ideas and gather feedback. Remember, what resonates with you may not necessarily appeal to your audience.

3. Effective Targeting Methods: Determine the optimal approach to reach your audience. Identify intent-based keywords, social media interests, income levels, fashion preferences, or any distinctive traits that can be leveraged for precise targeting.

Once these details are clarified, incorporate them into your targeting strategy. Strategic planning at this stage can prevent unnecessary expenditure and enhance campaign efficiency.

2. Create the Scent

Oli Gardner from Unbounce emphasizes the importance of maintaining consistency on landing pages by saying they should “maintain the scent.” This means that the content presented in your marketing materials must align seamlessly with the content on your landing page.

Conversely, the reverse holds true. When promoting a specific product or offer to a targeted audience, your advertisements should establish a connection between the needs and interests of your audience and the content available on your landing page.

In essence, you aim to “create the scent.”

Ideally, your messaging should be meticulously crafted to attract individuals genuinely interested in your landing page content. Clicking on your ad and navigating to the landing page should give them an immediate sense of being in the right place.

3. Get Granular

Building upon the previous point, it’s entirely acceptable to create distinct marketing materials and dedicated landing pages tailored to each type and subtype of audience.

Keep in mind that each audience segment has distinct motivations for visiting your landing page and will engage with the page in unique ways. Thus, the more targeted and audience-specific your ads and landing pages are, the higher the likelihood of achieving conversions.

Depending on your advertising platform, there are various strategies to achieve this: utilize single-keyword ad groups (SKAGs) for PPC, leverage social media targeting options, consider YouTube interests, among others. Always bear in mind that the more refined and audience-specific your ads and landing pages, the more positively it will impact your conversion rate.

4. Pay for What Works

Ultimately, when you pinpoint traffic sources with consistently subpar, especially unprofitable, conversion rates, it’s crucial to either make adjustments or cease allocating funds to that specific traffic source. There’s no obligation to continue investing in traffic that doesn’t yield favorable results!

Rather than persisting with less-than-ideal traffic, allocate a testing budget to explore new traffic or targeting opportunities. Concentrate the majority of your budget on proven winners.

Now that you’re directing the correct type of traffic to your landing pages, anticipate a substantial impact on your A/B tests. With the right audience engaging with your page, ensure that the user experience is truly irresistible!

Conclusion

Conversion rate stands out as one of the most pivotal metrics in marketing. In contrast to the click-through rate, the conversion rate precisely reveals the percentage of your traffic that fulfills the actions you desire. While acquiring numerous clicks is tempting, if those clicks fail to convert, something requires attention.

Now that you comprehend the essence of conversion rate, how to leverage it, and the strategies to enhance it, it’s time to harness the power of conversion rate data!

If you seek assistance in establishing conversion tracking or refining your conversion rates, feel free to reach out to us here or in the comments. We’re eager to provide support.

What are your thoughts on conversion rate? Do you consider it a valuable metric? Are there any additional tips you would contribute to this discussion?

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