CONVERSION RATE (CR) DEFINITION AND FORMULA
Find below the Conversion Rate (CR) definition and the correct formula to calculate your website conversion rate.
Brought to you by Mau, a Senior Digital Marketing Specialist at eDigital.
Need help or support measuring or tracking a digital marketing metric? Contact us
CONVERSION RATE (CR) DEFINITION
Conversion Rate (CR) Definition: The percentage of users % who have taken the desired action on a specific page. The desired action can take many forms, varying from site to site. Examples include sales of products, membership registrations, newsletter subscriptions, software downloads, or just about any activity beyond simple page browsing.
Every industry measures and compiles average conversion rates. For example, conversion rates in the retail sector are between 0.4% and 2% of people visiting sites; while some other industries might be lower or higher.
CONVERSION RATE (CR) FORMULA
Conversion Rate (CR) formula: Total Visits to your website / Total website sales.
Most view today > The digital marketing metrics your boss cares about
WHY CONVERSION RATE (CR) IS AN IMPORTANT METRIC TO TRACK AND MEASURE
- Conversion Rate gives you an indication of the quality of traffic you are bringing to your website and also how great, enticing and easy is for these users to buy from you.
- Major changes to audience segmentation or website new features might increase or decrease your website Conversion Rate (CR).
TIPS WHEN CALCULATING, MEASURING AND TRACKING CONVERSION RATE (CR)
- Conversion Rate might also spot seasonalities in your business or days and times people tend to convert the most. You can adjust your digital marketing dollars accordingly.
- You can track conversion rates to a specific banner creative level if you are tracking correctly all your banner advertising. The same applies to all your Google ads campaigns.
Trending > Average conversion rates by industry
OTHER KEY METRICS
- Cost per lead (CPL) definition and formula
- Cost per acquisition (CPA) definition and formula
- Return on ad spend (ROAS) definition and formula
- What is a return on investment (ROI) and how to calculate it
CONVERSION OPTIMISATION FOR E-COMMERCE
- 98 Dollars spend acquiring traffic, just $1 dollar spent on converting traffic. Source: eConsultancy and Redeye 2012
- Define just a few metrics: acquisition (how do users find us), activation (do users have a great experience), retention (do users come back), revenue (how are we making money) and referral (are users telling others).
- Test with one or multiple user personas
HOW TO IDENTIFY KEY CONVERSION OPTIMISATION ISSUES
- Start with your product pages and check information is the same across both mobile and desktop versions.
- Read competitors’ reviews to find what users want. Some issues can be problems with communication and/or delivery.
- Check if Google Analytics is set up correctly. In this class, the instructor mentioned that 90% of the time the GA setup is incorrect. Go to checkmyanalytics.com
- Check high exit rates on conversion pages close to the final conversion point and check what can be improved.
DEVELOP A CONSISTENT OPTIMISATION STRATEGY
- Define what your objective is more accurate than comparing it with the industry average.
- Only test something that will lead you to increase your bottom line (sales, calls, downloads)
- Use the lean startup process: test and learn faster.
- Top 10 factors for e-commerce conversion optimisation: Pricing, products, page load time, traffic sources, ease of use, speed of delivery, look and feel, marketing campaigns, competition, reviews/reputation.
BUILDING A CONVERSION OPTIMISATION PLAN
- Set up a baseline: so you can understand the impact of your work. Ensure you have a baseline against key goals (acquisition, activation, retention, revenue, referral)
- If you do not have enough traffic for testing: you might want to offer key benefits to users your competitors are not offering (free shipping) and test goals with better conversion goals first.
- Use Google or Spyfu to find your closest competitors and then start reviewing each competitor against each factor.
MAKE IT EASY FOR USERS TO FIND WHAT THEY WANT
Some days ago I was riding my scooter and noticed an ad at the back of a public bus advertising co-working spaces at Regus Australia. Two days ago I decided to google it and I easily found a Google Ad for Regus Australia co-working space / shared Offices in Sydney. As any user, I wanted to “easily” and “quickly” find out:
a) Deals, promos and offers or at least their current pricing
b) Locations in Sydney where Regus Australia has co-working spaces
The ad took me to the Regus Australia website. The landing page and other product pages show the price. The website offers the option of either calling them or filling out a form. I choose to fill out a form with my name, email, phone number, location and type of service.
ISSUE ONE – PRODUCT PAGES WITH NO PRICING!
Why Regus Australia pay for expensive Adwords visits if you do not offer what people want to find out?
Users want to easily find pricing straight away, do not waste their time!
ISSUE TWO – TOO MANY MANDATORY FIELDS ON THE FORM
Users are particular when sharing mobile numbers. Why you would make it mandatory? Let your users decide how they want to be contacted.
ISSUE THREE – NOT PROPER LEAD GENERATION AUTOMATION / FOLLOW-UP
When filling in their web form they have received my name. I have been sent two generic emails – they have not greeted me with my name or given me what I want: Pricing information
FIRST AUTOMATED EMAIL – MISSING PRICING AND USER NAME
Yeah, right! The CEO Mark Dixon cares about my enquiry! at least make it real, tell your users a customer service or sales rep will be emailing or calling soon.
SECOND AUTOMATED EMAIL – MISSING PRICING AND USER NAME
Now a new person comes called James Wicking (an SSC associate – expecting all users will know what an SSC means… still I have no idea) trying to seduce me with his generic automated email that again does not contain what I wanted: pricing! the email does not even use my name I kindly added it when I filled in the lead form (quick quote form on the Regus website).
THIRD AUTOMATED EMAIL – STILL MISSING PRICING AND USER NAME
OMG! James’s automated machine continues sending out emails with a generic ” Dear Sir” and no pricing!
ISSUE FOUR – LACK OF COMPETITOR ANALYSIS
- Sydney office renters have plenty of options to choose from and find key information straight away such as pricing, offering and locations.
- The potential client is not only lost but they will be likely to add your generic conversion optimisation email leads to their spam folder!
USER TESTING SOFTWARE & AD COPY TESTING TOOLS
Tip: You may also want to review some of the most popular buy-now-pay-later platforms to boost your online sales while ensuring your customers have the option to pay in instalments.
Trending > The best e-Commerce platforms – list
eDigital can help you conceptualise, plan, develop, run and optimise successful digital marketing campaigns that generate leads and sales for your brand.
Our digital marketing services include:
- Strategic planning for social media and other digital marketing channels.
- Online advertising management and optimisation (Search, Display, social media ads and re-marketing).
- Marketing training: social media training and digital marketing training.
- SEO strategy and execution. Including content development (articles, stories, eye-catching and SEO-optimised visuals).
- Celebrity and influencer marketing campaign strategy.
- Brand development. Logo creation, brand personality development and design of marketing materials.
- Consumer contests/competitions/giveaways.
- Email marketing. Dip sequence design and deployment.
- Conversion rate optimisation. It is also called “path to purchase” optimisation.
Contact us today and start boosting your leads and sales.
Final note: Want to reduce customer acquisition costs and dependency on paid media? eDigital‘s marketing strategy training will unmercifully review your marketing, help you build a marketing engine with channels and assets you own, stir your team’s thinking, bring new ideas for new conversion paths and boost customer lifetime value.
CONVERSION RATE (CR) DEFINITION AND FORMULA
Mau is one of the most popular marketing consultants offering the best marketing strategy training and the best social media training. Top marketers use Mau’s popular Digital Marketing Plan and Social Media Plan templates.