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Optimization glossary

Conversion rate

What is a conversion rate?

Conversion rates are a percentage typically used in digital marketing to evaluate performance of website traffic, marketing campaigns and conversions. To calculate a conversion rate, take 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 (CTA) to making a purchase and becoming a new customer. Websites and apps often have multiple conversion goals, and each will have its own conversion rate.

Why conversion rates are important

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.

Many factors can impact your conversion rate or cause it to go up and down. Something as simple as introducing new messaging, or doing search engine optimization (SEO) can make conversion rates fluctuate. While higher conversion rates are generally considered better, the more advantage you’re taking of the traffic you have, not all sources of traffic are created equal and can still contribute to more new customers even though their conversion rates aren’t as high. For example, organic traffic has higher conversion rates than display ads because people searching for something directly typically show more intent than people clicking a banner advertisement.

Measuring different kinds of conversion rates

  • General conversion rates can be based on form fills, downloads, clicks

  • Ecommerce conversion rates are add to shopping cart clicks, purchases

  • Organic search conversion rates can be measured using blog articles read (scroll tracking) divided by search traffic

  • Social media conversion rates might be calculated using direct messages divided by followers

  • Click-through rate is tracked using clicks on a banner or advertisement divided by impressions

What factors impact conversion rates

A lot of factors can impact good conversion rates, including but not limited to:

  • Source of app and website visitors, depending on channels and mediums

  • Types of conversions like form fills or purchases

  • Region, in some countries online purchasing is more popular than in others

  • Messaging on the landing pages

  • How well optimized your website or app is

  • Device types like mobile devices, desktop or tablet

  • User experience, the better the experience, typically the higher the conversion rates

That last one, user experience, is an important factor. Adding elements to your website or app that might seem like conversion rate improvements can hit a ceiling, where you’re taking conversions from one action and converting them elsewhere. So always keep an eye on overall conversion rates as well as individual action’s conversion rates. You want to end up with net-positive improvements, adding to the overall conversions, not taking away only to convert elsewhere.

Some elements we’ve found to have high conversion rates but can negatively impact user experience are:

  • Popups, increasing page conversion rates but reducing them elsewhere

  • Pervasive and intrusive interstitials, disturbing the visitor as they’re reading something like a blog

  • Dark patterns, where misleading messaging is used to trick visitors into converting

How to measure conversion rate

There’s multiple ways to do conversion tracking, but the generally accepted practice is to take:

total number of visitors / conversions

Let’s break that down. ‘Visitors’ in this case are all the people visiting your website, where as ‘conversions’ are the total amount of completed actions on said website. Dividing one by the other gives you a percentage, also known as the conversion rate.

Typical conversions are purchases, form fills, add to shopping cart, clicking a call-to-action or any worthy key performance indicators (KPIs) for your business like lead generation.

Some more complex websites might not have the goal to convert all visitors to the same type of conversion and need to adjust their marketing strategy. For example, if you have a large website with support, legal, a blog and other sections that don’t contain any forms, you can exclude metrics from the total visitors to get a more true conversion rate.

Keep in mind that although you can filter conversion rates by narrowing their scope, that also makes you lose some visibility into overall conversion rates. Higher conversion rates might make other conversion rates go down in other areas. For instance, we tested improving the chatbot on optimizely.com, increasing it’s conversion rates, but in the end it turned out it was cannibalizing on conversions for our other forms. Essentially optimizing the chatbot stole attention from the landing page and pushed people to convert elsewhere.

A more tailored and true conversion rate might look like:

Page views for “products” / shopping cart call-to-action (CTA) clicks

Landing page visits / form fills to download an ebook

To get started measuring your website’s conversion rate, use a tool like Google Analytics to set up a conversion rate tracking dashboard so its easier to monitor over time. Most web tracking tools come with many different types of conversion tracking events out of the box, and should start recoding visitor data as soon as they’re installed.

How to improve your conversion rate

The process of identifying conversion goals, calculating their conversion rates, and optimizing your site or app to achieve higher conversion rates is known as conversion rate optimization or CRO. Conversion optimization 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.

Start by identifying what your current average conversion rates are and comparing against a benchmark conversion rate. This can either be industry, device or technology specific, so it’s good practice to take the average for your business.

Then, take multiple data sources into account beyond the typical web metrics if possible. Consider taking heatmaps, ecommerce data, CRM data and other inputs to determine areas of improvement. These can often have surprising learnings you can’t glean from just looking at web metrics.

By continually identifying new conversion goals, identifying areas where your conversion rate can be improved, and implementing improvements to website’s templates, you can continuously improve the performance of your website or app and boost conversions with minimal additional traffic. Converting more potential customers into business.

Conversion rate optimization in action

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.

Boost your conversion rate with Optimizely experimentation

Optimizely is the leading platform for A/B testing and conversion rate optimization. Installing Optimizely is incredibly easy, and requires just installing a single snippet of JavaScript on your site.

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.