Unlocking the full potential of your digital marketing strategy begins with understanding the basics, including how to calculate conversion rate. A key metric that often puzzles beginners is the conversion rate.
This guide demystifies conversion rates, providing newbies with the knowledge to optimize online performance.
Let’s explore this fundamental concept.
What is a Conversion Rate?
A helpful little percentage tells you how many visitors took a leap on your website or digital platform and performed an action you wanted them to. These actions could be as diverse as buying a product, subscribing to a newsletter, downloading an eBook, or filling out a contact form.
By monitoring it, you can gauge how well your website design, marketing campaigns, and overall digital strategy are pulling their weight toward your goals.
How to Calculate Conversion Rate
Don’t worry — crunching the numbers for it isn’t rocket science. Calculating the correct rate involves dividing the number of conversions by the total number of visitors. Then, to turn that number into a percentage, we multiply it by 100.
It looks something like this:
Conversion rate = Number of Conversions /Total Number of Visitors x 100
For example: let’s say your website had 1,000 visitors daily, and 50 bought something (your desired action). Your conversion rate would be (50 ÷ 1,000) x 100 = 5%.
This formula is like a Swiss Army knife — you can wield it to calculate conversion rates for specific actions, individual pages, or even different marketing campaigns. Doing so will unlock valuable insights into your digital marketing strategy and spot areas ripe for improvement.
What is a Good Conversion Rate?
Well, the term “good” can be a moving target. It can swing widely based on a bunch of factors, including your industry, market size, and the specific action you’re measuring. Here are some average conversion rates across different industries to provide a general benchmark:
- eCommerce: 1.84%
- Legal: 2.07%
- B2B: 2.23%
- Finance: 5.01%
Remember, these figures are averages and fluctuate based on the aforementioned factors. A more effective approach is to continuously strive to improve your it in relation to your past performance. This method allows for consistent growth and improvement.
Ultimately, a good conversion rate shows progress and contributes positively to your overall business goals.
How to Increase Your Conversion Rate
Knowing your conversion rate is only half the battle — the next step is optimizing it. Here are five strategies to boost it:
1. Mix Up Your CTAs
Experiment with different calls to action (CTAs) to see which resonates most with your audience. A subtle change in wording or design could significantly improve it.
2. Try A/B Testing
A/B testing involves creating two versions of a webpage or ad and testing them against each other. This technique of conversion rate marketing lets you identify which version yields better rates, informing future design and decisions.
3. Craft Personalized Landing Pages
Creating landing pages tailored to different audience segments can enhance user experience and increase conversions. Personalization could involve modifying the design, publishing high-quality content, or CTA based on the visitor’s demographics or behavior.
4. Launch a Remarketing Campaign
Remarketing targets users who have previously interacted with your website or digital platform but haven’t converted. By reminding these users of your products or services, you can increase the likelihood of conversion.
5. Target End-of-Funnel Keywords
Change your marketing strategies, website design, or customer journey based on your analysis. Then, measure the impact of these changes on your conversion rates.
Factors Affecting Your Conversion Rate
- Product Price: An expensive item may lower customer conversion rate, as customers typically take more time to make purchasing decisions.
- Industry: Average rates can vary widely by industry.
- Funnel: The design and complexity of your funnel can impact conversion rates. A clear, intuitive funnel can lead to higher conversions.
- Channel: Different marketing channels (email, social media, search) may yield different conversion rates.
- Return Customer Percentage: Repeat customers often have higher rates, as they already trust and value your brand.
Conversion Analysis
Once you’ve calculated it and identified the influencing factors, it’s crucial to periodically analyze this data for insights. This analysis helps you understand your marketing strategies’ effectiveness and identify improvement areas.
Here are four steps to follow in your analysis:
1. Benchmark Against Industry Standards
Compare your rates with industry averages. If your rates are significantly lower, it may indicate that your marketing strategies need refinement.
2. Identify Patterns
Look for patterns in your data. Are there certain days of the week, times of day, or particular marketing channels that yield higher conversion rates? Use this information to optimize your marketing efforts and refine your conversion rate calculation.
3. Segment Your Analysis
Break down your conversion data by different segments, such as customer demographics or type of desired action. This granular analysis can reveal valuable insights about your audience and their behavior.
4. Test and Adjust
Change your marketing strategies, website design, or customer journey based on your analysis. Then, measure the impact of these changes on your conversion rates.
Final Thoughts
Understanding how to calculate conversion rate is critical for refining your digital marketing strategy. While a “good” conversion rate can vary, continuously aiming for improvement in relation to your past performance can drive consistent growth. Optimizing it involves testing, personalization, strategic marketing, and keyword targeting.
Keep in mind the various factors that can influence your conversion rate as you measure and enhance your marketing efforts.
Ready to take it to the next level? Book a consultation with Clicta Digital today!
