Conversion rate is the rate at which potential customers take action after engaging with marketing & advertising initiatives.
Conversion rate is calculated by taking the total number of conversions, divided by people that engaged with an experience, multiplied by 100%.
i.e. 10 conversions, from 100 people, is 10%.
This post includes:
- Why is conversion rate important?
- What is a good conversion rate?
- How to track conversion rates
- How to Improve your conversion rate
- Why is my conversion rate low?
- What other metrics are helpful to improve conversion rates?
- Trends in Conversion Rate
- Mapping out your customer journey
Why is Conversion Rate important?
Conversion rates are an important metric to track because they help demonstrate how effective a piece of the sales and marketing funnel is performing. Without knowing the conversion rate, it would be hard to identify problems or misalignment in the funnel that need addressing.
Example of a Conversion Analytics dashboard
In the above example, Conversion 1 is driving the most conversions and the highest conversion rate.
Conversion 4 is at a much lower rate, so it may need some attention to find where and how to improve it.
What is a good conversion rate?
Conversion rates are a byproduct of scale. You can have higher conversion rates to a more focused audience. Or lower conversion rates at a broader audience.
It is finding that right mix, that works for your business goals.
For high impact content, your conversion rates could be as high as 10-20%. For more general targeted content it could be 2-3%.
The question people are usually thinking about, is my conversion rate bad. If it is sub 1%, that’s where you want to think about improving it. It could be, you don’t have enough calls to action, the content may not be focused enough, the traffic sources may be poor performing.
And the call to action itself could be too onerous. Keep the hurdles for customers low and easy for them to complete. If the ask is too high, you will naturally have people drop off, as its too hard.
How to track conversion rates
You can track conversion rate with your analytics system. By tagging the events customers take, and this then informs the analytics system to record that action. And then automatically triggers all its own analysis for that conversion event.
This typically means you have already installed an analytics system, by placing code on your website. Then defined the conversion actions in your analytics set up. And used code, to measure that too.
How to improve your conversion rate
If you have a low conversion rate and want to improve it. Here is a 7 step process to work through and troubleshoot problems with conversion rates.
1. The proposition
The proposition is not appealing to the audience, it may be the wrong audience. Or it could be that the proposition itself needs improving.
Consider adjusting your traffic targeting, or fine tuning your headlines. To draw in the right audience with the right message.
2. Calls to action are too hard
Putting up massive hurdles, or hard to use experiences, will impede conversion rates as consumers find them too difficult. Think about breaking up your funnel into smaller, easier steps. The challenge and reward of each step can improve momentum of customers going through the funnel.
Customers like the a mix of challenge and reward. Long convoluted journeys can mean they give up, or get lost.
3. Not enough calls to action
You need to nudge customers through the purchase journey. And this can mean, having multiple calls to action, so they are seen and taken action.
4. Calls to action are in the wrong place
You can use your analytics to look at Average Scroll, and where people drop off, to see if calls to action are in the right place. It may be that customers aren’t seeing your call to action.
This is a common problem in content marketing, calls to action left to the bottom of content.
5. Traffic sources are ineffective
It could be that the traffic sources are not driving high quality traffic. You can use your analytics to compare the attention and bounce rate of different sources, to make sure they are driving quality, engaging visitors.
6. Slow page speed
Slow page speed can be the killer of conversion rates, because it immediately limits the amount of customers that could be making a purchase. This is an easy fix that can lift conversion rates immediately.
7. Always test your conversions
Make sure you have completed the actions yourself, to ensure that all the analytics and events are firing correctly. Catching problems before paid media is spend, can help avoid costly mistakes.
Why is my conversion rate low?
This is a commonly asked question, trying to figure out why a conversion rate would be so low or why the conversion rate is dropping.
Some metrics to look at could be:
- Conversion by traffic source, and conversion by traffic source by device
- Conversion by geography
- Conversion by time of day
- Conversion by piece of content, or URL/internal source
These should help you find where air is potentially leaking from the system – and in turn decreasing your overall conversion rate.
Read more here.
What other metrics are helpful to improve conversion rates?
Nudge has found that Attention is correlated to conversion rate. That is, more attention on a URL will increase its conversion rate. Thus if you need to improve your conversion rate, analyzing your purchase journey through attention metrics, will help find areas where conversions could be improved.
Supporting metrics like Engagement & Average Scroll can be very insightful too. It may be, that customers simply aren’t engaging enough to get to a conversion event.
An example is, a blog had a low conversion rate, because the calls to action were only at the bottom of the posts, and users often skipped over them or dropped off before they saw a call to action.
Common patterns in Conversion Rate data
Often conversion rates exhibit patterns in the data which are worth diving into.
Some common examples are:
- More conversions tend to happen on one device than others.
- More conversions tend to happen on one or two days of the week.
- Organic or earned traffics sources tend to convert at a higher rate.
- Poor performing pages, tend to convert at about the same amount (0.5%) this is often referred to as the unoptimized conversion rate.
- Increasingly customers want access to more information/research upfront, to make their purchasing decision. So often a lot of content is consumed before a conversion occurs.
- Retargeting or re-engagement methods, usually are the most cost effective. But really on prior efforts to generate traffic and build familiarity with the brand/company/experience.
- Conversions tend to be U shaped based on time of first engagement. That is a lot of conversions happen straight away then the other half tend to happen down the track.
Use your conversion analytics to dive into these for yourself, to find those trends. It may be you skew budget to these days, or increase bids on higher converting times/places.
It is also worth calling out, because more conversions happen on a day, doesn’t mean you should stop doing activity on those other days. You want to dive into the time to convert. It is often that half of conversions have already had a prior engagement, recently.
An example is, a fashion brand was promoting content around sneaker trends. They saw great engagement but a poor conversion rate, which was confusing. But later they found that the average time to convert was 7 days. People would engage, make the decision to buy and then come back on the next payday.
Pro Tip: Mapping out your customer journey
The full customer journey can be a lot harder to see when you navigate step by step and optimize in the same manner. Having a holistic or macro view, can help strategically.
Mapping out your customer journey, as it stands today. You can use this to redesign your funnel, and find areas where customers are dropping out of the process.
And that’s the important thing with conversion rate, always keep the customer front and centre. What makes sense for them. What is the next step in the process. Can they make a purchase at any time.
For troubleshooting conversion rates, these might be helpful:
If you are new to Conversion rates, you might find these posts helpful:
- What are conversion rates in marketing?
- How can I increase my conversion rate?
- Why conversion rate optimization is important
- How to get a higher conversion rate
- Conversion Rate Analytics
- What techniques can be used to improve conversion rates
- How do I optimize my conversion rate?
- Conversion vs Conversion Rate