The percentage of users who have completed the desired action known as the conversion. The formula for conversion is as follows: you take the number of conversions and divide that by the number of total ad interactions during the same time period (that can be tracked to the conversion).
What is a Conversion Rate?
Conversion rate refers to the percentage of viewers who take a desired action, such as registering for an event, making a purchase, or clicking a link. This metric is used to measure the effectiveness of a campaign or content. The higher the conversion rate, the more successful the campaign is considered. Average conversion rates vary by industry, but typically range in the low single digits, such as 2% for app downloads leading to a purchase. A small change in the conversion rate can have a significant impact.
The importance of conversion rate
Conversion rate is crucial because it indicates how effective a page or content is in achieving its marketing objectives. While metrics like page views or impressions are informative, they do not provide insight into whether the content is achieving its purpose of driving users to act. For example, a good click-through rate (CTR) for a digital ad campaign may indicate that the ad is grabbing people’s attention, but if few people download the app, the campaign is not performing as it should. By tracking conversion rates, marketers can identify weaknesses in their marketing funnel and improve their landing pages or promotional offers.
How to calculate conversion rate?
Conversion rates can be calculated by dividing the number of conversions by the number of interactions with the content and multiplying by 100 to get a percentage. Many analytics platforms, such as Google Analytics, automatically calculate conversion rates once goals are set up. For example, a landing page with 1,000 views and 25 resulting purchases would have a conversion rate of 2.5% (25/1,000 = 0.025 or 2.5%).
Conversion rate factors
When it comes to online buying decisions, users are faced with a complex array of factors to consider. From product compatibility to pricing and company trustworthiness, there are multiple objections that must be overcome in a very limited time window. In order to increase conversion rates, it is essential to not only showcase the value of your product or service through messaging and imagery, but also to create a seamless user experience with a strong call to action.
There are several factors that can impact conversion rates, including page load time, page design, differentiation, pricing and offer, and the call to action message. Ensuring that your website or landing page loads quickly is essential, as research shows that slow loading times can lead to user disinterest and a lack of trust. A well-designed website with a mobile-friendly interface and optimized content can also improve conversion rates, and differentiation strategies can help your offering stand out among competitors.
Pricing and offers are also important factors to consider, as users may be turned off by high prices or unappealing promotions. By benchmarking your pricing against competitors and offering special deals or limited-time promotions, you can create a sense of urgency and incentivize users to convert.
Perhaps most important of all is the call to action message. Effective messaging should prompt users to take action and provide a clear next step. It is important to choose the right words to convey the value of taking action, and to test different CTA messages to find what works best. By following these best practices and continually testing and refining your approach, you can improve your conversion rates and achieve greater success in your online marketing efforts.
How to Optimize and Improve Conversion Rate
- Measure the Right Action To optimize your conversion rate, you need to ensure that you are measuring the right action. For bottom-of-the-funnel content, the goal is typically to complete a purchase. However, for top- or middle-of-the-funnel content, you may want to measure lead generation and nurturing conversions instead. Examples include downloading a resource, subscribing to a newsletter, or following your social media page. Once you have added someone to your email list, you can measure conversions according to your next goal, such as signing up for a free trial.
- Avoid Asking for Too Much Information Lengthy lead generation forms can cause people to abandon them before completing them. Consumers abandon nearly 70% of eCommerce shopping carts due to cumbersome checkout processes. To avoid this, keep the checkout process short and sweet. Customers abandon conversions when they feel that the time investment or experience outweighs the benefit they anticipate.
- Localize Your Content It’s essential to localize your content if you have a global audience, especially if you’re running paid campaigns in multiple countries. Localize your messaging to account for language, dialect differences, and cultural references. Creating country-specific web pages and app listings can help you accomplish this. Localize your images to ensure they resonate with the demographic you’re talking to, and ensure that the functional aspects of your conversion like currency, shipping, and product availability are localized upfront.
- Sharpen Your Messaging If your ad is seeing good engagement but your conversion rate is lagging behind, take a closer look at your landing page content. Does it grab attention? Is the value of your offering clear? It’s smart to hire a professional copywriter or agency to optimize your page content. Use market research or A/B testing through dynamic content to uncover which message resonates best with your audience.
- Create a Sense of Urgency Creating a sense of urgency makes people feel like they’re winning by saving money or getting something for free. Inversely, you create a sense of scarcity that they may miss out on something by not acting. Use phrases like “Claim your special offer by Dec 1” or “Register today to save $100” to create urgency. Even if you don’t have a discount or freebie to offer, you can still use this tactic by highlighting when inventory is low or by positioning value in a direct way.