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Introduction to conversion rates: what, why and how?
What is a conversion rate?
In its most simple terms, the conversion rate is the percentage of visitors to your company’s website who end up taking the desired action that you want them to.
For example, you might want them to subscribe to your newsletter. The percentage of people who click through your website and end up putting their email address into the submit button is your conversion rate.
Of course, this applies to any desired action you want your website users to take. It could be engaging with specific pieces of content, placing a purchase, filling out a form or booking an appointment.
Consider a scenario where your website attracts 10,000 views per month through ads. However, if the user experience on your website is poor, or if your product descriptions fail to effectively communicate the value of your offerings, you might find that only a small fraction of that traffic actually converts into “paying“ customers.
Traffic alone doesn’t guarantee success; it’s the combination of enticing content, user-friendly design, and compelling value propositions that truly drives conversions.
Why is it important?
All websites generally have a purpose, whether it’s ecommerce or service based offerings.
Your conversion rate indicates how successful your website has been in achieving that purpose.
If your conversion rate is high, then your online presence is efficient in taking leads through your marketing funnel and having them turn into actual customers.
When it comes to specific digital marketing campaigns, you’ll want to know what your return on investment (ROI) is. I.e., how many dollars have you made for every dollar spent? The conversion rate is an indicative way of helping you determine just that.
What determines a “good” conversion rate?
There are different factors that can influence how successful a marketing campaign is online or a website.
1. Industry benchmarks
To gauge whether your conversion rate is ‘good’ or ‘poor,’ it’s important to compare it against the specific benchmark relevant to your industry. When you look deeper, it’s not just about the average conversion rate; it’s also about how long it takes for people to make an inquiry.
For example, a social media campaign designed to attract potential customers to a monthly food delivery subscription service is likely to attract a higher onsite conversion rate compared to a jewellery business promoting engagement rings.
High-value items like engagement rings or fine jewellery often involve a prolonged decision-making process, as numerous factors come into play before the investment is made.
Recognising these distinctions helps businesses gain a more accurate understanding of their conversion rate performance in the context of their industry.
2. Target audience
It’s important that your user experience is seamless to ensure that different conversion options, such as requesting a call-back, signing up for newsletters, or web chat pop-ups, are readily accessible and easy for potential customers to use.
If your website’s visitors are actively seeking a specific product or service during their visit, you can expect to achieve higher conversion rates. For instance, someone searching for an after-hours locksmith on Google is more likely to convert through tactics like click-to-call CTA’s or quick appointment forms, which tend to outperform longer and more detailed form submissions.
3. Funnel stage
At the top of the funnel (TOF), the aim is to capture a broad audience’s attention. Conversion rates here may be modest since the focus is on generating initial awareness. However, as prospects move further down the funnel into the Middle of Funnel (MOF), the conversion game intensifies. Here, prospects have more interest – they are actively searching for your product or service. At the Bottom of Funnel (BOF), you’re dealing with prospects who are close to making a decision, and your conversion rate is expected to be at its peak.
For example, in display advertising, a nuanced approach to these different funnel stages is essential.
Display advertising involves the use of visual elements such as banner ads, images, videos, and interactive media to promote a brand or product across various websites and platforms. These ads can appear on websites, social media platforms, apps, and more, reaching a wide and diverse audience.
A good conversion rate in display advertising is determined by several factors, including the nature of your product or service, the quality of your ad creative, the relevance of your messaging to the target audience, and the effectiveness of your CTA.
4. Traffic source
Visitors to your website can arrive from various sources, including direct visits, Google searches, paid Google ads, social media ads, email links, or referrals. Understanding the different traffic sources is central for optimising conversion rates.
For instance, organic and paid search traffic often generates higher conversion rates because individuals are actively searching for specific products or services and have likely clicked on a link directly related to their search term.
In contrast, social media and display ads are often used for prospecting new audiences who may not currently be in the market for your product or service. As a result, the conversion rates for these sources tend to be lower. These visitors may still become valuable customers, but their journey typically involves a longer consideration phase before converting.
How to evaluate if your conversion rate is good or not?
Consider your goal alignment
There isn’t a universally “good” conversion rate, and that’s because it should always align with how effectively it advances your business towards its specific objectives. This underscores the importance of evaluating your broader marketing goals and business aims when gauging your conversion rate. If your conversion rate aligns with these objectives, then you’re moving in the right direction.
Look at historical data
Jump onto Google Analytics and explore your acquisition reports and engagement reports. Looking at how your website has performed in the past can help you understand if it’s getting better or worse over time. You might notice patterns or changes that can help you set achievable goals to improve your conversion rates.
Commit to A/B testing
By experimenting with various elements like headlines, calls to action, layouts, content, and forms, you can pinpoint the optimised strategies for achieving higher conversion rates.
How we work to improve conversion rates
We know a thing or two about how to improve conversion rates. We focus on four main approaches.
Streamlined UX
A smooth website navigation, user-friendly forms, fast loading times, and mobile accessibility are key for a positive user experience. These factors directly impact the likelihood of visitors taking the desired action.
Compelling content
Craft persuasive, trustworthy, and relevant content that engages visitors and encourages them to act. Remember, always tailor your messaging to cater to your audience’s needs and interests.
Clear call to actions (CTAs)
Make your desired actions crystal clear. Use bold and concise CTAs to prompt visitors to take the next step, such as “Place Your Order Here,” “Subscribe to Our Newsletter Today,” or “Click Here to Learn More.” Clarity and directness in your CTAs lead to better conversion rates.
Build trust and credibility
Utilise social proof and secure payment options to instil confidence in potential customers/clients. Showcase testimonials and reviews, and if you’re in ecommerce, highlight the security of your payment methods. Building trust leads to higher conversion rates.
Ready to talk conversion rates?
Improving your website’s conversion rates is one-part science and one-part art.
Fortunately, you don’t have to tackle this alone. Our branding and marketing experts are always happy to have a sit-down conversation with you about your conversion rates.
If you’d like to talk about your conversion rates, just give us a call today.
David Metcalf
Director
Cam Dobie
SEO Specialist