If you have been catching up the wave of Digital Marketing Ocean, you probably have heard about the power of conversion rates. Though many digital marketers don’t see digital marketing as an important metric to track to see the success of digital campaigns, this technique is paramount to analyze where you stand in the market. Let us get into what makes this metric so great, and how do we calculate it in relation to your own marketing efforts?
Conversion with regards to digital marketing is an interaction of a consumer with your website, contributing to online business goals, per say, signing up for an email, making a purchase, or clicking on a call to action. Whereas Conversion Rate is the overall percentage of visitors that make a purchase, click on a CTA or sign up for an email on your website. Knowing the rate is important if you want to know whether your business objectives are met or not.
How To Track Conversion Rate!
Analytics will help you determine your website’s conversion rate and track them so you can use the insights to gain more conversion rate on your website. However, there is math involved too. The formula for calculating conversion rate is the division of the number of times goals is met by the number of people who were responsible to complete that goal.
For example, you have a services website and you want the people who arrive on your website to contact you via a business inquiry. Through analytics, you can gain insight into how many people landed on your website, and how many of them have clicked on your contact page; whether it is about contacting you, clicking on a click to action, making a sale, downloading something like the whitepaper, or sharing something from your site. Visitors completing preferred tasks are called ‘conversion’. You could determine how many of them fill out the contact form available on your website and click ‘send’.
Now, to the math, to determine your conversion rate:
You find that the total number of visitors on your website was 500 last month, and 20 of them actually completed the contact form. If you then divide 20 by 500 and multiply by 100 to determine the percentage, you would get the conversion rate of your website.
20/500* 100 = 4
Out of 500 visits, your conversion rate is 4%, which may not seem too good of a number, but the average is close to 2-3%. Now you may find it satisfying!
The conversion rate is an ideal method to analyze the value of multiple audience channels and segment. It’s relatively easy to measure success using the total number of conversion generated for each channel; however, it results in many missed opportunities. Let’s say, you are running a Google and Facebook ad campaign, and have put $1000 into both of them. Assume, about 500 people reach your website via Google campaign and 1000 people via the Facebook campaign. Out of this audience, Google ads gave you 5% conversion rate and Facebook gave 8% conversion rate. You can use such analytics to find out which ad campaign gives you more benefit and move forward accordingly.
Google Analytics is a tool that makes this calculation even simpler for you. This tool offers default reports such as acquisition, conversion reports, and audience reports to show the analysis of the conversion rate of your website.
The Importance Of Conversion Rate
The importance of such a metric could be credited to the measurement of impact your website has on the business goals of your online presence. While pageviews and visitors also define the success of your business objectives to a certain limit, determining conversion rate can be really paramount if your business goals are more pertinent to generating leads or driving sales. Not only you can set benchmarks success for your site, but can also measure the impact of the change in your conversion rate when you update a product description or something of that sort.
The Bottom Line
Conversion rates can help a business owner understand which audience segments and channels are generating more value, and which one is worth the investment. Analysing a total number of conversions is often not beneficial as you sometimes get stuck investing in the same channel repeatedly, but conversion rate helps you switch your focus to yield better results. Indubitably, the conversion rate has its own set of cons too, which you should consider reading before getting started with it. To assess the impact of your digital campaigns accurately, make use of the best tool to track the conversion rate of your website.