In this article we are going to take a look at what is a conversion, how we calculate a conversion rate (CR) and why all that is important to your website or app.
Why is it important to know how many conversions your website has had?
Understanding your CR helps you to understand how well your site is performing. Of those people that visit, how many are doing what you want them to do?
A slight improvement to your CR can reduce marketing costs and increase sales significantly. Imagine you have a website generating 3000 sessions a month, increasing your conversion rate by 0.5% results in an additional 15 conversions. You will be driving additional conversions without spending any additional money.
Once you have your CR you can benchmark individual marketing channels, campaigns and technical implementations. It can also help with your budget forecasts and budget allocation.
Do you have a particular marketing channel that has a lower conversion to the rest, it would be worthwhile investigating why this might be. Do you have a channel that is converting really well? It may be worth allocating more budget to that channel as your budget will be working harder.
Improvement of your CR means that your business is going in the right direction, and you are making each user session more likely to convert.
It reveals how many of your visitors take a desired action, it may be placing an order, signing up for your newsletter, or engaging in any other action that aligns with your goals.
Understanding your CR isn’t just about metrics; it’s about unlocking insights into how well your site performs, highlighting what entices users to act, and, more importantly, what may be holding them back.
Type of Conversions
As we discussed above a conversion can vary from business to business depending on your priorities, here are some examples of the type of conversions that can be generated through your –
- Website order
- Contact form submission
- Telephone call
- Subscribing to your newsletter
- Live chat interactions
- Time on page
- Video plays
- Documents downloads
- Number of page views
How to calculate a conversion rate
Calculating a CR isn’t rocket science, but it’s a formula that wields immense power. It’s the number of conversions achieved divided by the total number of visitors or sessions, expressed as a percentage.
Conversion rate formula
(Number of Conversions ÷ Total Visitors) × 100 = Conversion Rate
Here\’s a quick example:
Let\’s say you had 500 sessions and 10 form submissions.Your conversion rate would be (10 / 500) * 100 = 2%.
Conversation rate formula for excel
The formula for excel is simple –
=(Conversions/Visitors)*100
If we assume that your conversions are in cell B2 and your visitors are in A2 your formula will be as follows
=(B2/A2)*100
Simple, right? This percentage becomes your compass, guiding you through the digital landscape as you navigate various marketing strategies and optimisations.
This is a really difficult question to answer, each industry and website will perform differently. Your industry will dedicate the average CR, but this will still vary on a site by site basis.
What you consider to be a conversion will also impact how easy it is to obtain a conversion; for example if you consider a brochure download as a conversion, your CR will be higher than if you consider an on-line purchase to be a conversion.
Some of the variables that impact CR include:
- Website usability
- Product Type
- Product cost
- Average order value (AOV)
- Website traffic source
- Device (PC, mobile, tablet)
- Platform (Windows, Mac, iOS, Android, etc.)
- Location
Benchmarking your conversion rate
As discussed above it is tricky to benchmark against your competitors. The best way to to this this is against your businesses CR from last year. If you don’t have last year’s data or your are a new website, then you could use month on month. You need to consider that comparing on a month on month basis will not take into consideration seasonality that year on year comparisons provide.
What else to take into consideration when considering your websites CR
When comparing your CR to previous time periods you need to take into consideration what happened this year that is different to what happened this year. A useful formula for this is a variance or change formula find out more here.
For example a recently one of my client saw a significant spike in the sales for a certain type of fibre optic cabling. The reason for this is that there is a stock shortage and luckily for them they have stock. As a result, their CR has seen significant growth. It is unlikely that next year the team will be able to anniversary this month’s performance in the same way.
Remember to keep track of changes, victories, and lessons learned. Creating a website diary will serve as a testament to your growth and keep track of those elements that may impact your CR.
In Conclusion:
Armed with the knowledge of what conversion rates are, how they’re calculated, and why they matter, you’re ready to embark on a journey of optimisation and what you can do to improve your CR. Whether you’re fine-tuning your e-commerce store, seeking engagement on your blog, or enticing enquiries through a contact form, your CR will be your barometer.
If you need any help to understand your websites performance get in touch.