What Is Conversion Rate?
by DJ Team, on March 24, 2020
In the marketing and advertising world, you may often hear people talking about conversion rate. Especially in digital marketing and advertising efforts, this is a vitally important metric, so it makes sense why some folks seem to be obsessed with it.
But what exactly is conversion rate, and how does it work? In today’s post, we’ll define and demystify this important marketing term.
Conversion Rate Defined
In a world of fluffy marketing terms with hard-to-understand definitions, conversion rate is a refreshingly simple term to understand. Conversion rate is simply the rate at which visitors to your site complete a particular action (conversion). It’s expressed as a percentage, factoring in the total number of site visits and the total number of visitors who completed the goal.
Want to increase your conversions? Check out DemandJump’s channel optimization product that uses AI to identify new growth opportunities for your marketing campaigns.
Most conversion rates fall into one of two categories: a lead conversion rate or a sales conversion rate.
Lead Conversion Rate
Many digital marketing efforts’ aim is to generate leads. This often includes capturing someone’s name and email address as they subscribe to your newsletter or download an eBook or other gated content such as webinars or free assessments.
So a lead conversion rate, then, is the percentage of page visitors that turn into leads by signing up.
Sales Conversion Rate
A sales conversion rate calculates what percentage of site or landing page visitors complete the sale you’re pitching. This is different and more direct than a lead conversion rate, because you’re cutting right to the chase. All marketers are selling something, and in many situations you can make your sales case right on the landing page.
An example of this is a social media ad for a product or course that directs to a landing page with a sales pitch. Conversions in this scenario are users who click the ad and follow through with a purchase. The sales conversion rate, then, is the percentage of site visitors driven from this campaign who actually buy.
Average and Above Average Conversion Rates
So what is an average conversion rate? Well, conversion rates vary widely depending on the industry and nature of your product or pitch, but one industry expert pegs recent average landing page conversion rates at 2.35%. The best 25% of sites have a conversion rate of 5.31%, and the best of the best (highest 10%) average at over 11%.
So (again, depending on industry specifics) if you’re reaching 3% conversion rate (that’s 3 conversions for every 100 site or landing page visitors), you’re slightly above average. If you’re approaching 10%, you’re doing fantastic!
How Do You Calculate Conversion Rate?
Calculating conversion rate is simple. The conversion rate formula is the number of conversions divided by the number of visitors. This results in a decimal, which is easy to convert to a percentage.
Just like you’d find any percentage, divide the number of conversions by the number of visitors:
34 conversions ÷ 1,000 visitors = .034
Then multiply the answer by 100:
.034 * 100 = 3.4%
So making the calculation isn’t particularly complicated. You just need to know the number of conversions and the number of page visitors for a given window. Often you’ll want to limit totals to the date range of your current marketing campaign.
If you’re looking for a conversion rate calculator or for help knowing how to pull the relevant numbers, you’re in luck. These days, just about any analytics platform will provide these numbers for you.
Quality platforms will allow you to stratify this data as well. You’ll be able to see conversion rates from various sources, like all web traffic or just those who clicked in from an AdWords campaign.
Conversion Rate Optimization Tips
Now that you know how to find your conversion rate and what a good conversion rate looks like, how’s it going? Do you wish your conversion rate were higher? Even if it’s doing pretty well compared to industry averages, wouldn’t your business benefit from increasing it even further? Of course it would! Because the higher your conversion rate, the higher your sales or leads go.
If you’re looking for some conversion rate optimization strategies, we can help.
Make your landing page responsive.
If you place an ad on Facebook and a mobile user clicks through only to find a site that’s “broken” or too tiny to read, there’s no way you’re converting that user. Make sure your landing page (and the conversion click through process) is responsive, optimized for mobile.
Make your call-to-actions clear.
Make sure that your conversion button is highly visible. Users could be skimming, scrolling or swiping—you don’t want them to miss the most important page element because it’s styled too plainly.
Conversion rate optimization is all about gathering data that helps you incrementally improve the performance of your webpages. One of the best ways to do that is by A/B testing various components on your site. When you make small changes to one variable, you can attribute increased conversions to that change. By doing a couple site tests a week, you ensure that your website is always improving, little by little.
Click here to find new ways to meet consumers in the most relevant time and place.