How do you know how good of a job you’re doing at turning prospects into believers?
And no, we’re not talking religion–we’re talking about turning your website’s visitors into customers.
Well, it’s through conversion rate.
Using a simple conversion rate formula, you should be able to gauge the effectiveness of every marketing campaign.
Because besides generating traffic, a marketer’s job is never quite complete without a respectable conversion rate. In other words, it’s important that many of the people landing on your website buy into your offer.
But first things first: Just what does the term “conversion rate” really mean? Read on to find out.
What Is Conversion Rate?
In the simplest of terms, your conversion rate is the percentage of visitors on your landing page that take the action you want them to take.
A conversion can be anything, depending on your business goals. Let’s see some examples:
- Checking out on an e-commerce website
- Filling out an inquiry form
- Calling the phone number provided
- Signing up for a newsletter
- Signing up for a free trial
- Downloading a freebie, like an eBook
- Using a software tool
There are a number of other actions that would still count as a conversion, but this list gives you a pretty good idea of what it means.
Also, keep in mind that every business will have its own unique conversion goals.
As an example, a news website may base its conversion calculations on the number of pages that each visitor viewed, or the total time spent on the site.
The higher the number of page views, or the longer the on-site times, the easier it should be to land advertising deals.
The Ultimate Conversion Rate Formula
If you want to increase your conversion rate, you’ll need to know the right formula to use.
Calculating your conversion rate is a fairly straightforward process, thankfully. Here’s the basic formula:
Conversion rate = (number of conversions / number of unique sessions) *100%
In our formula, “number of unique sessions” is just a fancy term for the number of people who came to your landing page to view your offer.
Let’s try that out in a breathing, living example, shall we?
Say you run an advertising campaign for your online store. You are selling t-shirts, with each design having its own landing page.
In the first month of your campaign, t-shirt A gets 1,200 unique visits. Out of these, 240 people buy the t-shirt.
So your conversion rate for t-shirt A = (240/1200)*100%
That’s an impressive 20% conversion rate.
It’s worth noting here that you may be tracking different conversion rates at the same time. You can be as broad or as specific with each type of conversion rate, such as:
- Overall conversion rate–going by our t-shirt example, this would be the total number of t-shirt sales divided by the total number of visitors to your site.
- Page-specific conversion rate–which page is converting the most traffic?
- Advertising channel conversion rate–between Facebook Ads and AdWords, which traffic converts more?
- Campaign conversion rate–how many conversions has a specific AdWords campaign yielded?
These are obviously just a few examples showing a variety of ways to look at conversion.
How to Track Your Conversion Rate
Driving traffic to your website is great. But without tracking different conversion rates, how can you tell which of your marketing campaigns could do with some improvement? How can you distinguish your most effective conversion strategies?
Say you are driving traffic with both Facebook Ads and Google AdWords. You’ll want to know the conversion rate from each of these campaigns so you can make more informed decisions on your ad spend.
The good news is that both Facebook Ads and AdWords have a tracking mechanism for your ads. You just need to set the tracking right, and you’ll be able to view your conversion rates directly, within the dashboards.
Using Google Analytics is one of the popular ways for tracking conversions. You can view your conversion rates for search engine traffic, social media traffic, ad traffic, etc. To set the tracking properly, you might need help from a developer.
There are other conversion analytics tools that provide deeper insights into your customers. KISSmetrics and Mixpanel are two solid options to consider, and for their value, you might find the extra fee totally justifiable.
What’s a Decent Conversion Rate?
As you’re probably aware, website conversion rates may vary significantly, depending on such factors as:
- Traffic source
- Quality of traffic
- Product or service on offer
- Type of business
While you can look at the findings for general conversion rates by industry, ultimately, what matters most is your marketing goals. It’s up to you to use the insights you gather from your analytics data to improve your marketing campaigns.
It’s also important to remember that a good conversion rate doesn’t always tell the whole story. For example, if you manage 4 website conversions out of 20 visits, the data might be too scant to arrive at an informed conclusion. What if one of those conversions was accidental?
How to Improve Your Conversion Rate
So, in a nutshell, how do you actually improve your conversion rate?
It’s quite an involved process, to put it simply. There are many steps you’ll need to take, and while we’ll not get into the details here, two things are worth noting:
Get Social Proof
Everybody wants to buy from the guys who already have people lining up to buy from them. It’s called social proof, and it’s arguably the most influential factor in a purchase.
No matter how good your other aspects of marketing may be, social proof provides potential buyers with the much-needed assurance that they’re making the right choice.
Test, Test, Test
You’ll need to do a lot of testing, plus some more. Run A/B tests to test different headlines, two different sets of ad copy, two design variations, etc. The more tests you run, the better placed you’ll be to fine-tune your campaigns.
One of the overarching goals of every marketing campaign is to optimize conversion rates. To be able to do this, you must first know your conversion rates by using the right conversion rate formula.
With good insights on your conversion metrics, you will be able to know which of your conversion optimization strategies need more work.
Check out our blog to learn how displaying social proof can considerably boost your conversion rates and, ultimately, your bottom line.