What is Conversion Rate? How to Calculate and increase?

        The success of a web business is measured by several factors. A high conversion rate is one of the contributing factors to a thriving business.

This tells you that your marketing strategy and web design work together in a positive way.

In this article, we cover how to calculate, track, and optimize conversion rates to generate leads and earn revenue.

What is Conversion Rate?

A company's conversion rate or conversion rate helps determine the success behind its sales and marketing efforts.

This important metric in online marketing provides numerical insight behind website visitors and other actions in percentage form.

Business owners may have many different types of conversion goals they want to achieve.

Conversion rate records users who have completed the desired action. Conversion rate by taking the total number of users who ‘converted’ (for example, by clicking on an ad), dividing by the total audience size and converting that number to a percentage.

For example, let's say an advertiser is advertising a mobile ad campaign on Facebook that reaches 10,000 people. Of those 10,000 people, a total of 400 users have clicked on the ad (which is a conversion event in this scenario).

Therefore, the conversion rate for this campaign will be calculated as follows:

400/10000 = 0.04, or 4% conversion rate

Knowing that 4% of users who see an ad convert, marketers now have metrics they can try to improve for further growth.

Why is Conversion Rate Important?

Conversion rates are an effective way to compare and contrast the performance of multiple ad channels.

Like the example above, conversion rate is very important when running mobile user acquisition because it can measure the success of each campaign.

They can also be used to set ROI expectations when scaling a campaign.

Conversion rates don't always have to refer to clicks – they can also refer to conversion events at the bottom of the funnel.

For example, it is possible to calculate the percentage of users who continue to install an app or complete an in-app action.

This is important for advertisers and marketers as it helps them identify valuable users. This information can then be fed back into funnels to assist with targeting and optimizing campaign performance.

When used properly, conversion rate analysis can reveal which channels are most effective for promoting a particular app, helping advertisers determine the effectiveness of their copy and use it to guide strategic decisions.

If your data shows that conversion rates are lower than expected, it can also be used to find issues with your app's UX (for example, when users are having problems logging in) and highlight other areas of improvement.

No single conversion rate can be used to determine success across the mobile advertising industry, but research on industry benchmarks and vertical-specific conversion expectations can help.

You can use this research to compare these numbers with the performance of your internal advertising campaigns across different channels and advertisers.

How to Calculate Conversion Rate

Calculating the conversion rate is a fairly simple process that follows a basic formula.

Here are some simple steps you can take to calculate conversions related to purchases on ecommerce sites:

Step by step explanation of conversion rate calculation

• Use this formula as a reference point: Conversion rate = conversions / total guests x 100
• Divide the whole range of conversions by the whole range of tourists to your website.
• Divide the total number of conversions by the total number of visitors to your site.
• Multiply this number by 100.
• The amount you get is your conversion rate.
• Round off if necessary, then add a percentage sign.

Example step-by-step conversion calculation:

• Your business has 181 people who ordered concert posters on your site from 12,355 site visitors.
• Divide 181 by 12.355 to get 0.01464994.
• Multiply 0.01464994 by 100 to get 1.46499393.
• Round off if necessary. In this case, your number remains at 1.46.
• Your final conversion rate is 1.46%.

The conversion rate can be calculated manually or through the help of online analysis tools

Here are some additional examples of how the conversion rate formula variables can differ depending on how the business measures success:

• Conversion rate = total range of conversions / total range of sessions x 100
• Conversion rate = total range of conversions / total range of distinctive guests x 100
• Conversion rate = total range of conversions / total range of leads x 100

Deciding which formula is best for you depends on your ultimate goal.

Suppose you have an online site that sells personalized socks. Your main goal is to make sure that people find your site and buy your socks.

You have created a sales funnel that will direct them to a virtual shopping cart for their final purchase.

Example of calculating conversion rate

If you had 55,000 unique visitors to your site last month and ended up selling your personalized socks to 800 people, you would have a 1.45% conversion rate. The equation breaks down like this:

55,000 / 800 x 100 = 1.45%

How do you know if your conversion rate is considered good by industry standards?

Most lead generation pages don't exceed a 12% conversion rate, so if you're at or above that, your business is doing well.

How to Track Conversion Rate

Calculating conversion rates isn't always about the final purchase. You may want to track the number of people who signed up for your newsletter or the number of leads generated from the free eBooks created by your team.

Most firms follow a weekly or monthly trailing programme to remain targeted on their conversion goals.

Increasing conversion rates is a top priority in digital marketing because more money for the business contributes to the overall success of the company.

Here are a few ways you can implement tracking methods:

• Web analytics service
• Session recording and replay tool
• Heatmap
• Satisfaction survey

Tracking conversions helps you stay informed when implementing your marketing strategy, which also helps you gain a competitive edge over others in your business who may not be paying attention to the metrics.

Consider hiring an experienced web developer to help you with analytics if you're unsure about how to properly track metrics on online platforms.

Web analytics service

Some online platforms offer free tools for businesses that help track their conversions, rather than going through a time-consuming manual process.

They track and report web site traffic in one easy-to-find place.

Session recording and replay tool

Some marketers have found valuable information about user experience by implementing session recording and playback tools on their sites.

By observing the behavior of site users linking to the page, they can determine areas of improvement and can even find the source of the high bounce rate.

Heatmap

The Heatmap tool shows the areas of the screen that visitors interact with the most. The colored heatmaps on the screen represent areas of the site that the user clicks on to varying degrees.

Darker areas represent heavy use while lighter areas indicate the opposite. Areas that do not have a heatmap represent areas of the screen that may be skipped or ignored.

Satisfaction survey

Asking direct questions to your customers or site users is a great way to measure customer satisfaction.

Decide what you most want to know when writing a survey and ask questions about user experience.

You will receive unique feedback that is not possible through the use of analytical tools, such as suggested improvements to the site and things that make customers happy.

Conversions happen when people are happy with their experience.

How to Optimize Conversion Rate

There square measure many ways in which a business will optimize its web site to get a lot of conversions.

Conversion rate optimization focuses on strategies that increase a site's conversion rate using existing site traffic.

To receive more conversions, you can do a few things to test your website:

• Prioritize your landing page
• Do A/B testing
• Build trust

Also, take extra time to test your website traffic.

Prioritize the appearance of your landing page

Before you spend money on paid advertising, it's important to know which website pages you want to target for conversions.

Many businesses use their homepage as the main landing page for their ads, though others focus on a custom made-for-sale page right now that displays all discounted items.

Do A/B testing

When your website is already generating a lot of traffic, A/B testing is a quick and easy way to do CRO.

Create 2 sorts of landing pages that you just can visit as choice A and choice B.Send half your traffic to page A and the other half to page B. Online CRO software makes this process very easy.

Once you've decided which elements of your site have the biggest impact, try experimenting with different CRO tests.

It's important to only change one element with each test so you know you can immediately attribute success to that change.

Some examples of elements you can change include the wording of the title, the layout and description of your offer, and the choice of words used in calls to action such as “buy now”, “shop today”, or “act fast. "

You can even do A/B testing by replacing your image or video assets for a better understanding of what is visually appealing to your audience.

Build trust

There are some simple things you can do to promote a trustworthy website. Make sure you put “About us” or contact information in a visible place.

Appoint someone who can answer questions online in a timely manner or implement a call center if your business receives a lot of questions.

Provide customer reviews, client stories, or case studies on your site so people have the information they need to confidently complete a conversion.

Conclusion

That's a complete discussion of conversion rates and how to maximize them in business.

Conversion rate is one among the foremost vital selling metrics.Unlike click-through rate or CTR, conversion rate tells you what percentage of your traffic actually does what you want them to do.

You can buy all the clicks you want, but if those clicks don't lead to conversions something must be wrong.

Now that you know what conversion rate is, how to calculate it and how to increase your conversion rate, it's time to use conversion rate data for you.

The higher the conversion rate you have, the more chances you have of making a profit on the business.