Conversion

Conversion is the percentage of site visitors who complete a desired action by clicking a CTA, signing up for an email newsletter, filling out a form on a website, etc. It helps businesses understand how effective their marketing efforts are and identify potential issues that prevent people from completing specific actions.

In this article, we’ll explore conversion rate in detail, why it’s important, and what a good conversion rate is. We’ll also provide a formula to calculate the conversion rate and strategies to increase it.

Conversion rate

Conversion rate is a metric that demonstrates the percentage of people who perform a desired action compared to the total number of users who received the message. This indicator is essential for marketing, e-commerce, and sales. A high conversion rate testifies to the effectiveness of marketing campaigns.

The level of conversion helps evaluate the performance and effectiveness of your marketing efforts. By calculating it, your company can compare different marketing channels, campaigns, strategies, and website elements to identify those that encourage the most actions. A conversion can be any action that is targeted for your business, for example, app install, email signup, email click-through, etc.

Now that you have a more comprehensive understanding of conversion rate, it’s time to find out why businesses should know it.

Why is conversion rate important?

First, measuring conversion rate helps evaluate how effective a specific marketing campaign is. It shows how well people interact with your company, whether many of them complete a desired action, and how quickly a business achieves its goals. We’ll discuss more reasons for you to track your conversion rate.

• More customer insights. The metric is useful for understanding what works best with your target audience. It can be anything from CTAs, website design, content, loading time, or user experience in general. Tracking your conversion rate allows you to identify poor website performance, ineffective call-to-action buttons, or content overload. When you have all the necessary data about the performance, you can effectively solve problems and improve the effectiveness of your marketing efforts.
• Cost efficiency. When you have a high conversion rate, it means that you get the maximum from your investments. Having enough clients enables you to reduce your costs on acquiring new ones. As a result, you can allocate your budget to more critical areas of your business, including user experience, customer service, customer loyalty, and retention tactics.
• Consistent improvements. While monitoring the conversion rate, your business can continuously optimize crucial elements of your website, marketing strategy, engagement, etc. You can A/B test different versions of your landing page, CTAs, design, and website style. When you notice a drop in conversion rates, you can focus on improving specific areas such as your checkout process, website speed, loyalty or referral programs, or other promotional offers.
• Competitive advantage. By monitoring your conversion rate, you can promptly respond to customer engagement and enhance their experiences. Quick reactions improve customer satisfaction and encourage more significant interaction. Additionally, tracking conversion rates enables you to adapt to shifts in customer preferences, behavior, and marketing trends, allowing you to adjust your strategy as needed. This approach helps you stay competitive and consistently meet customer needs.
• Sustainable growth. A high conversion rate indicates that your company is operating sustainably. When prospects complete specific actions—such as installing an app, subscribing to email newsletters, or filling out a form—it shows they are more likely to convert into paying customers. This leads to increased sales and provides the confidence to make further investments to achieve even better results.
• Higher revenue. You can increase your company’s revenue by focusing on your conversion rate. Optimizing your website elements, offers, and content helps boost your conversion rate, which in turn drives increased sales.
• Goal tracking. Monitoring your conversion rate helps you determine whether your audience is responding as expected. If everything aligns with your goals, it indicates that you're on the right track toward achieving your business objectives. However, if you notice any deviations from the plan, it signals that your strategy may require adjustments.

Now that you know the benefits, it’s time to unveil what a good conversion rate is.

What is a good conversion rate?

Businesses can have different conversion rates depending on the industry. To find out whether you are moving in the right direction, we’ll provide you with the percentages considered to be good conversion rates.

According to Statista, online beauty and health stores have the highest conversion rates in 2024, amounting to 3%. Businesses involved in selling food and beverages online have a slightly lower indicator of 2.4%, while the average conversion rate for this industry is around 1.9%.

Regarding general apparel and footwear, the conversion rate is around 2.2%, while the measure is lower for clothes for active sports, amounting to 2%. If your company sells home appliances, the rate might fluctuate between 1.5% and 1.3%. These numbers are considered good for this specific industry. For businesses selling electronics and accessories, it’s good to have a conversion rate of 0.9%.

Now that you know what a good conversion rate looks like for a specific niche, it’s time to jump into the calculations. Only after estimating your conversion rate you can say whether it meets your expectations and helps achieve your final goals.

How to calculate the conversion rate?

To figure out whether your conversion rate is good, you should calculate it first. You can do it fast using a formula. For this, you need to know how many people interact with a specific piece of content and how many of them perform the desired action. For example, they subscribe to your email newsletter, register for your webinar, or reserve a spot for your product presentation. When you know these numbers, you can use the following formula:

Conversion Rate = (Number of Conversions / Number of Visitors) x 100%

Say, you’ve sent an email campaign informing about your holiday sale to 700 subscribers, and 50 of them clicked on the link in your email and claimed the offer. Let’s calculate the measure.

Conversion Rate = (50/700) x 100% = 7.1%

Let’s also have an example from e-commerce to understand that conversion rates can be estimated for different situations. For instance, you have an online clothing store, and 1,000 people have visited your store this month. 150 of them successfully converted into customers after performing a purchase. So, let’s find out the conversion rate.

Conversion Rate = (150/1000) x 100% = 15%

If, after completing your calculations, you find that your conversion rate falls short of expectations, you can focus on improving it. For guidance on doing this effectively, we invite you to explore the next section, where we’ll share proven strategies for boosting conversions.

How to increase conversions?

When you have a low conversion rate, you can change the situation by incorporating some techniques. We’ve listed the most effective of them for you to consider.

• Ensure mobile-first design. Focus on creating email campaigns, landing pages, and websites that look good even on small screens. You should also take care of easy navigation and ensure that CTAs are visible and easy to click. Seamless experience on smartphones will contribute to higher conversions.
• Improve your website speed. Loading time plays a crucial role in customer decisions. When prospects are about to complete a desired action, but the website speed is too slow, they are more likely to change their minds. That’s why you need to check your website speed and focus on its optimization. You might need to compress images, limit the number of HTTP requests, use Content Delivery Networks, etc.
• Add visible and compelling CTAs. Consider using action-oriented words to drive action, like “Shop Now,” “Reserve a Spot,” “Claim the Deal,” or “Get Started.” Besides, these buttons should include contrasting colors and have a good placement so that site visitors instantly notice them. Additionally, it’s better to add one prominent CTA rather than overwhelming prospects with multiple buttons.
• Simplify the checkout process. People should enjoy shopping both on smartphones and laptops. This means that you need a checkout process that is short and doesn’t require customers to provide too much information. Also, ensure that people can complete purchases as guests using any payment method they prefer, including Apple Pay, Google Pay, PayPal, etc.
• Use the minimum number of fields in forms. Make sure the forms on your website include a few fields. Sometimes, people don’t convert because they need to provide too many details. Prospects are more eager to complete an action when they don’t need to spend too much time on it.
• Send emails about abandoned items. Since 70% of site visitors abandon their carts, you should remind them about items that haven’t been checked out. Those who really wanted to complete a purchase but simply forgot about it will do it once they remember. With SendPulse’s automation, you can deliver messages about abandoned items on autopilot using its pre-built flow. You’ll only need to schedule these campaigns based on your specific requirements.
• Use A/B testing. The best way to identify what resonates with your target audience is by conducting A/B tests. By comparing different versions of headlines, copy, colors, CTAs, and layout, you’ll be able to choose those that drive the most engagement.
• Include customer reviews. Since 98% of customers say that customer reviews influence their purchasing decisions, it’s necessary to include them on your site. You should also establish a presence on popular review platforms so that consumers can share their feedback about your brand. With social proof like customer testimonials, feedback, and reviews on your site, leads won’t even have to search for third-party platforms to get the information.
• Provide prospects with incentives. By providing prospects with some enticing offers, gifts, promo codes, and discounts for the first purchase, you increase the chances of conversion. You can send different incentives based on potential customers’ preferences, browsing history, and behavior. If you want to deliver 100% relevant offers, consider conducting surveys to find out directly from potential customers.

Overall, the conversion rate is a metric vital for every business striving to track how close they are to the key goals. It helps evaluate the performance and effectiveness of marketing efforts, allowing marketers to find space for improvement. By tracking this indicator, companies can identify issues with their website, landing pages, email campaigns, and sign-up forms and optimize them to achieve better results.

Last Updated: 29.11.2024