What is conversion rate?
Conversion rate, specifically online conversion rate, is a term used to describe the percentage of website visitors who take a desired action, such as making a purchase, signing up for a newsletter, or clicking on a product taking it from a Product Details Page to Basket/Cart. The marketing conversion rate formula is applied by dividing the number of conversions by the total number of visitors and multiplying by 100%. It’s a direct reflection of a website’s ability to persuade visitors to take that action. For example, if 1,000 people visit your eCommerce website in a day and 50 of them buy something, your conversion rate is 5%.
How to measure conversion rate: formula & calculation
There are many ways to measure online conversion rate, but the most common method is to divide the total number of visitors by the number of conversions.
In other words, the conversion rate is calculated as follows:
Conversion rate = (Total number of visitors / Number of conversions) * 100%
By dividing the number of visitors by the number of conversions, you get a percentage that represents the conversion rate. This percentage tells you how many of your visitors are taking the desired action on your website.
Why is conversion rate important for your business?
Conversion rate is an important metric for retailers and brands because it can be used to measure the effectiveness of their marketing campaigns and website design. A high conversion rate indicates that a business is successful at converting visitors into customers or leads. Conversely, a low conversion rate indicates that there are areas where the business can improve its marketing or website design. Understanding what is a good website conversion rate helps businesses set realistic goals and benchmarks.
A high online conversion rate is a testament to successful marketing and effective web design. It means that the message resonates with the audience, and the website’s design facilitates the user’s journey towards the desired action. On the flip side, a low conversion rate can signal potential issues that need addressing. It could be an indicator of a disconnect between the marketing message and the target audience, usability issues on the website, or even external factors like increased competition or market saturation.
Examples of eCommerce conversion rates to measure
There are many different types of conversions that businesses can track, depending on their goals. Some common examples include:
- eCommerce purchases: The percentage of website visitors who add items to their cart and complete the checkout process.
- Lead generation: The percentage of website visitors who sign up for a mailing list, download the app, or register for a webinar.
- Free trial signups: The percentage of website visitors who sign up for a free trial of a product or service.
- Account & loyalty reward scheme registrations: The percentage of website visitors who create an account, or sign up for loyalty and reward schemes on a website or app.
- Social media engagement: The percentage of website visitors who share the website’s content on social media or follow the website’s social media accounts.
What is a good conversion rate?
Understanding what a good conversion rate is, is essential for optimizing your digital marketing efforts. The ideal conversion rate is highly specific to your industry, business model (eCommerce, lead generation, B2B, B2C), and even your marketing channels. However, by examining relevant industry benchmarks, you can gain a valuable perspective on where your conversion rate website performance stands.
For US businesses, the average conversion rate in eCommerce is 3.35%, according to Adobe, but top performers can often exceed this. Likewise, benchmarks for lead generation and other specific actions vary considerably.
Factors impacting your website conversion rate
The digital landscape is nuanced, and a many elements can impact your online conversion rate:
- Website Design: First impressions matter. A cluttered design, confusing navigation, or slow page load times can deter potential online conversions. On the other hand, a clean, intuitive design can enhance the user experience, making it easier for visitors to find what they’re looking for and take the desired action.
- Content Quality: High-quality, relevant written and visual content can establish trust and authority. It’s not just about selling a product or service; it’s about providing value, answering questions, and addressing pain points.
- Offer Attractiveness: In a competitive market, what sets you apart? Exclusive deals, limited-time promotions, or a unique selling proposition can be the difference between a bounce and a conversion.
- Trustworthiness: In the age of data breaches and online scams, trust is paramount. Displaying security badges, offering transparent return policies, and showcasing genuine customer reviews can bolster a visitor’s confidence to take action.
How to improve conversion rates for your eCommerce site
Enhancing your online conversion rate isn’t a one-time task; it’s an ongoing process of analysis, iteration, and refinement. Here are some actionable strategies:
- A/B Testing: This is the digital equivalent of a science experiment. By creating two versions of a webpage (A and B) with varying elements, businesses can determine which version has the highest conversion, and proceed with that version in the future.
- Enhance Your Offer: Sometimes, it’s not about how you present but what you present. Re-evaluating and tweaking your offer can lead to significant improvements in conversion rates.
- Mobile & App Optimization: With a significant chunk of users accessing websites via mobile devices and via a retailers’ App, ensuring a seamless mobile experience is no longer optional; it’s imperative.
- Engage with Your Audience: Open channels of communication. Whether it’s through chatbots, surveys, or feedback forms, understanding your audience’s needs and preferences can provide invaluable insights.
- Social Proof: Increasingly, retailers and brands are leveraging social proof to reach their eCommerce goals. When shoppers see that other people are buying a product or service, they are more likely to invest in the product themselves, this delivers significant conversion rate uplifts, increased sales and stronger brand affinity.
For a deeper dive into practical techniques, explore our comprehensive guide on how to increase your conversion rate and start seeing better results.
Why choose Taggstar?
In the world of eCommerce, staying ahead of the curve is essential. As the leading experts in enterprise social proof messaging, Taggstar helps retailers and brands deliver more dynamic and engaging shopping experiences, build customer trust and increase online conversions and sales.
Powered by machine learning, Taggstar’s Conversion Messaging platform offers scalable real-time social proof solutions including social proof messaging, attribute messaging and dynamic badging. Join the growing list of leading global brands & retailers that trust Taggstar to elevate their shopping experiences and drive significant sales lift.
