How to Define Conversion Rate
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What is Conversion Rate?
If you’re confused about conversion rates, it’s understandable. After all, conversion means different things to different businesses. It starts, however, with a definition that fits your business goals. In this piece, we’ll look at some of the most common examples and share tips on increasing their effectiveness.
When someone visits your business website, your goal is to get them to do something. When they do it, you’ve successfully converted them. Here are just some of the most common conversion activities:
• signing up for email updates
• subscribing to your e-newsletter
• downloading your white paper or brief
• watching your video
• friending your business on Facebook/following it on Twitter
• buying your product
To determine your conversion rate, simply divide the number of people who do what you want by the number of people who visit your site. For example, if 25 of 2,500 visitors buy your product in a week, your conversion rate is one percent.
There is a lot of speculation on what percentage qualifies as a good conversion rate. The truth is, it really depends on your expectations. If 25 online purchases in a week are what you need to remain profitable, a one percent conversion rate is good. If, on the other hand, you need twice as many purchases, your conversion rate is lacking.
Factors impacting conversion rate
To increase your conversion rate, it helps to know two other important rates that can impact overall conversion:
• Bounce Rate: The percentage of visitors who landed on a single page of your site and immediately left. These are always one-page sessions.
• Exit Rate: The percentage of visitors who left your site from that page after visiting other portions of your site.
If you have a high bounce rate or exit rate, it’s usually an indication that something needs to change. It could be that your page layout is confusing, or that the flow of information isn’t leading the visitor to a natural point of conversion.
Conversion Rate Optimization (CRO)
There are varying ways to go about improving (Optimizing) your conversion rate. From the tactical side, you can rely on industry best practices, such as changing the color of a button or reshuffling tabs on your site. These are trial and error methods you can test and learn from quickly.
On the analytical side, you can use the collected data from your monitoring to form strategic plan for optimization. This typically requires working with an online analytics specialist and can take more time. Evergage includes several tips for improving conversion rates here.
Whether you’re looking for quick fix or a long-term solution, increasing your conversion rate starts with your own definition. Where it ends is up to you.