Conversion Rate Optimization and How it Affects Marketing Goals
Every website exists for a purpose. When those purposes are clearly defined, their attainment is what is described as a conversion. So, conversion rate can be seen within that context desired defined actions and goals. So, every business, be it profit oriented or not for profit owes its success to the rate of conversion.
So while it is important to generate good traffic to your website, it is far more important to convert visitors into customers. Conversion is the primary aim of advertising and traffic generation. If your conversion rate is very poor, you will soon begin to suffer failure signs. Acceptable conversion rates depend on the industry. Generally, the higher the traffic, the higher will be the click through rate which results in a higher conversion rate.
Acceptable conversion rate will be inversely related to the click through rate. That is to say, the higher the click through rate, the lower will be the acceptable conversion rate. Again, what will be an acceptable click through rate will vary and depend on the industry. Notwithstanding, improving on click-through rates is what every business should aim for in every marketing campaign.
Conversion rate is important for you to know the number of people that visit your website and take a desired action. Whether email marketing or pay-per-click, the key target is to achieve a good website conversion rate. Generally speaking, the best results will come to those who know how to find a conversion rate that pays off for their industry.
How to Calculate Conversion Rate
Conversion rate is simply how often a desired action takes place on a website. If you take a sale as a conversion, it means how often a sale occurs on the website within a particular period. In a pay-per-click ad, it involves counting up the number of visitors to your landing page, ad, app, or site that perform the desired conversion, such as buying a product, watching a video, or signing up for a newsletter. You will divide the number of actions by the total interactions.
For instance, if you launch an advertising campaign that gets 1,000 visits or views, and 100 visitors take a desired action such as buying a product, the conversion rate is 100 divided by 1,000, or 0.10, and we can multiply by 100 for a percentage. That gives us a 10% conversion rate, not bad for most industries, but again, the term could apply to a great variety of businesses where conversion rates need to be lower or higher for the campaign to succeed.
Professionals in the e-commerce arena understand the ideal conversion rates for their industry and the type of conversion and advertising medium they are using, finding ways to improve wherever they can. One way to compare what works and what doesn’t is through comparing conversion rates.
Conversion Rate Goals
Conversion rates do vary, but the goals are relatively the same. Most websites do focus and track the following conversion goals:
- Upgrades from a free or trial subscription to a paid subscription
- Information submission such as completing a survey
- Newsletter sign-up for email marketing
- Signing up for webinars or live calls
- Creating a new user account
- Downloading assets such as a free e-book
- Participating in a contest or activity
- Engaging in some other way, such as commenting
- And, of course, buying a product!
Purchases or filled carts might be an ideal conversion goal to pursue for an e-commerce store, while some content sites, like online news blogs or papers, may prefer a goal like email sign-ups, Facebook likes on their page, content sharing, a click on an affiliate ad and a comment on a post. You will need to carefully evaluate the goals that help and grow your business and track them as your primary targets in a campaign. Let us consider your primary goal as leads.
Why Leads Matter
Within marketing or sales context, a lead is simply a person or entity that might patronize a business. It typically involves sales as the ultimate goal but doesn’t necessarily mean a sale will always occur or occur.
Sometimes leads are defined as some form of concrete contact information like phone numbers, social media handles, or email addresses. Generating leads that convert is a key conversion goal. Depending on the business, leads are very necessary for a follow-up that can result in a sale.
How to Calculate Conversion Rate
Calculating your website conversion rate is quite simple. Here is a formula to calculate conversion rate:
Conversion Rate = (total conversions / total number of visits or sessions) * 100
Let’s plug some real numbers in to test it out: if your site reaches 200,000 sessions in a month, and 20,000 orders were made, your conversions over total visits = (20,000/200,000), so 0.1. Multiply that by 100 and you have 10, so the conversion rate is 10%.
Sometimes your calculations can be misleading if a visitor pays a visit to your site more than once within the period you are considering. You need to consider multiple visits from one visitor as a single visit. Google Analytics can help you address this by giving you insights into the pattern of traffic. You can consider unique visitors as the metric when calculating conversion rates. By going with a unique visitor count, you do not count a single visitor more than once even though he or she visits multiple times..
Improving Conversion Rate
Conversion Rate Optimization, or CRO, is the process of achieving some improvement in a website's performance on the various metrics used in calculating conversion rate. In the context of advertising, such as a pay-per-click, it would mean the process of getting more conversions from the number of impressions.
One best way to improve conversion rate is to conduct some basic A/B testing. This involves creating two audiences that are simultaneously experiencing your ad or site. You can alter some variables and present the ads to different groups. You present group A with a particular version and present group B with another, running both at the same time. Then, observe which one gets higher conversions and that tells you which ad will be more rewarding by the higher conversions it gets.
What Will Be A Perfect Conversion Rate
The ideal conversion rate for any business will vary according to the industry. A good way to go about it is not to consider a percentage but to consider the industry average and aim at something higher than that. According to a study, the average landing page conversion rate across major industries is 2.35%. The top 25 industries achieve a conversion rate of over 5.31%. For finance, the median conversion rate is 5%, however, the median conversion rate for eCommerce is less than 2%.
That suggests that if you hit a conversion rate of 2.5 percent for any industry, you aren't doing badly. There is no perfect rate however because you have to strive to get better. It’s advisable to work towards the highest possible rate. Adjusting your ad copy and targeting different audiences can improve your conversion rate. Generally, you need to aim high and strive to continuously improve even though some conversion rates are simply unattainable.
What About Click-through Rates?
Click-through rate or CTR is simply a measure, in percentage, of the number of clicks gotten on a page or ad. Usually, it is calculated relatively to a keyword search. So, the click through rate could be good for a particular keyword and so so good for another keyword. It simply varies based on the keyword that is being searched for.
CTR could be affected by the quality score and the amount you pay when someone clicks on your ad because it will affect how prominently your ad will be displayed.
Quality score, if you are unfamiliar, is a term for “Google’s rating of the overall user experience that your ads and landing pages provide when users search for your keyword(s).” The better the score, the less your average cost-per-click will be.
Across the marketing community, 4-5% is generally considered a high CTR. On the flip side, Google search expectations have set an acceptable CTR at about 0.5%. With display ads, it’s doubled at 1%.
These are averages which means that for specific sites and keywords, the CTR could actually be higher. Keep in mind that the higher your click-through rate on Google ads, the lower your cost. This is mainly due to a better quality score, and the more juice you have going toward an organic search and SEO campaign.
Why Click-through Rate Matters?
CTRs are an indication of higher traffic, clicks and the potential to convert. Higher CTR also directly influences your quality score and therefore lowers your cost of advertising.
Here are Key Benefits of High CTRs:
- A high click-through rate usually means a high-quality score.
- A high-quality score enables you to achieve and maintain ad positions at lower costs.
- High CTR suggests (but doesn’t guarantee) you are likely attracting the maximum number of people to your offer as possible.
- CTR helps your business to monitor key events related to your site and landing page and offer pointers.
- CTR can often be tracked by split testing different title tags, ad headlines, calls to action, and more.
What If You Have a Low Click-Through Rate?
It can be very frustrating when the main landing page has a low click through rate. A low click through rate means high advertising expenditure with low returns. You will need to compare your average click through rate with your industry average to determine how well you are performing.
If your click-through is not up to your industry average, you need to make some tweaks to your page and improve content quality. You may need to look at:
- Title tags
- Landing pages for ads
- Product and offer
- Target audiences
We have found that tweaking these key elements of your web page helps you achieve a higher CTR.
Is High Click-Through Rate a Bad Idea?
A high click-through rate is good but an inflated CTR can indicate underlying issues with your strategy. For that reason, it’s good to consider the value earned per click. Maximizing CTR can indeed do a lot of good things, but it doesn’t mean you should chase those benefits if you are not receiving leads that offer the most value and make your business a success.
How to Monitor Click-Through Rate
CTR applies to many types of campaigns in the digital world. Let’s check few areas where you can monitor CTR:
- Pay-Per-Click Ads: As we noted, CTR affects many facets of your pay-per-click campaign, especially when it comes to concepts like quality score. Quality score combined with a high CTR from valuable traffic will feed itself and give you a strong return.
- Email Marketing: In email marketing, CTR refers to the number of users who click a link in your email. Email subscription is one of the most valuable marketing tools in many online ventures, and improving CTR there can mean squeezing even more value out of serving your subscribers.
- Social Media Marketing: Social organic posts or social PPC ads both should be tracked for their CTR and total impressions. Keep in mind that each social media platform has its own peculiar advertising system. Certain types of factors in an ad might be more important to raising CTR or views, depending on the site. Research the social media platform to see how their advertising programs work before using social media ads for your business.
How to Improve Click-through Rate
Improving your website click through rate performance will come with lots of advantages as earlier mentioned. One is that a good click through rate will reduce our advertising expenditure. So taking steps to improve your website click through rate is a good goal to pursue. Here are the steps we recommend.
Double Check the Audience
This is a first and important step to take. You could be targeting a wrong audience. The primary aim of your campaign is to target the right type of person. If you have a low CTR, you need to re-evaluate your target audience, and whether you might want to target different people, or target them differently.
You will need to check if your target audience demographic characteristics match the targets that should respond to your campaign. Particularly, you will need to check factors like age and gender, location and even go deeper to check income and educational qualifications. You must check that your campaign targets the right audience and not misplaced. Then you can proceed to check the other factors following.
Create Quality Content
When your content is rich, original, and stands out by providing the right answers to user queries and not just one of those spammy, irrelevant or insubstantial content, you will likely improve your CTR with such content.
You need to tweak your content to get the best performance CTR.
Employ Powerful CTAs
Calls-to-action are powerful ways to get your audience to click on your content. A good call-to-action is important to improve CTRs and it is recommended that at least a call-to-action should be placed within the Above-the-fold section of your website.