The conversion rate is the number of conversions divided by the total number of visitors. For example, if an ecommerce site receives 200 visitors in a month and has 50 sales, the conversion rate would be 50 divided by 200, or 25%.
A conversion can refer to any desired action that you want the user to take. This can include anything from a click on a button to making a purchase and becoming a customer. Websites and apps often have multiple conversion goals, and each will have its own conversion rate.
Tracking conversion rates allows you to measure the performance of your web pages and apps. Understanding what percentage of your users are completing the goals that drive your business allows you to gauge the success of your site or app and identify areas for improvement.
Improving your conversion rate also allows you to get more sales with the same amount of traffic. If you are spending $1,000 a month on advertising to drive 500 visitors to your site, if you double your conversion rate you essentially double the value of your ad spend. You can then cut back on your ad spend and get the same benefit as you were getting before, or invest the additional revenue into new ad programs.
The process of identifying conversion goals, calculating their conversion rates, and optimizing your site or app to improve conversion rates is known as conversion rate optimization or CRO. CRO is done by formulating hypotheses for why visitors aren’t converting and coming up with ideas for improving conversions, then testing those ideas through a process called A/B testing, in which two versions of a page are tested against each other to see which one performs better.
By continually identifying new conversion goals, identifying areas where your conversion rate can be improved, and implementing tests of new features, you can continuously improve the performance of your website or app.
A real world example of CRO is captured in this case study from ComScore, a web analytics company that provides marketing data to enterprises. The company started by setting a conversion goal from their product page (leads generated), determined the conversion rate, then set up an experiment with different ideas for improving the conversion rate of the page.
The hypothesis that they came up with was that they suspected including testimonials on the page would increase visitor trust and lead to more conversions. They also tested a version of the page that included both testimonials and the logos of the companies providing the testimonials.
Through this A/B/n test, they found that the version of their page with testimonials and logos performed 69% better than their original page. This is a clear example of how a company was able to improve their conversion rate through testing and have a measurable impact on their business.
Once Optimizely is enabled, the visual editor allows you to make changes to your website or app without any coding or developers required. Launching experiments is as simple as the click of the button, and Optimizely will automatically display visitors different versions of your site to visitors.
Once an experiment is set up, Optimizely’s advance stats engine will tell you when a test has reached statistical significance, so that you can confidently report whether a change performs better or worse than the original.