Companies pay close attention to calculating and improving their conversion rate because of the value generated by mastering this KPI. In fact, it's a key marketing indicator that highlights the performance of your marketing and communication strategies, your online visibility, the appeal of your products and services, and even a better understanding of the expectations of your core target audience. So what exactly is the conversion rate, and how can it be optimized?
Conversion rate: definition
The conversion rate is a KPI expressed as a percentage, mainly used by marketing experts to analyze the impact of an online campaign on different pages of their website. Conversion refers to a final action, the one targeted by the objectives of a company's communication or marketing campaigns, such as the purchase of products from the online store by its customers. In this example, a visitor to a website is considered to have converted to a buyer.
In web marketing, conversion can also take the form of becoming a lead. This is the case when a visitor to a site fills in a contact request form, wishes to download a white paper or registers for an online conference. By doing so, they give the company the opportunity to contact them, converting their status from visitor to lead. The action that leads to the conversion of a customer is therefore defined by the company's marketing teams in different ways - depending on its sector of activity, the objectives of its promotional campaign, its product and its customers. It can take the form of a purchase, the opening of newsletters, registration for an online event, etc.
Calculating the conversion rate
To obtain a certain conversion rate, a company needs to follow a simple process:
- Add up all conversions over a given period.
- Add up the total number of visitors to your site.
- Divide the number of conversions by the number of visitors.
- Multiply the result by 100.
It's important to remember that conversions vary according to the company's situation, strategic goals and the quality of marketing campaigns. For example, if a company launches a white paper and, out of 700 visits, 28 customers download it, its conversion rate will be 4%.
Why estimate and improve your conversion rate?
Calculating the conversion rate provides an objective, quantified estimate of the impact of your e-marketing campaigns. It sheds light on the profitability of your actions, and enables you to identify areas for improvement. As such, conversion rate has become an essential KPI in the growth marketing sector, and can also be an important factor to consider within a business plan.
In fact, when setting up a business, it can be a good idea to present a positive (or fast-growing) conversion rate to a banking institution in order to obtain financing for a better launch. A start-up that demonstrates a good conversion rate from the very first years of its existence thus presents an attractive profile to investors and lending institutions.
It's difficult to define exactly what a good conversion rate is. Conversion rates vary according to business sector, objectives, traffic source, landing page or even the very definition of the conversion action. For example, for a company operating in B2B (whatever its sector), conversion is a one-off event. Its average conversion rate is therefore naturally low, and it's the comparative analysis that helps us understand whether the percentage obtained is "good" or not. As for a SaaS company for instance, its freemium product conversion rate is often high: website visitors are often interested in a free trial, which subsequently converts them into customers. In this case too, the key to using the conversion rate effectively is to estimate its evolution.
Since the conversion rate varies according to the definition of conversion, it's important to carry out a precise, in-depth KPI analysis. For example, some channels on the same site may perform better than others in terms of conversion rate. This difference can be explained by the netlinking and SEO strategies implemented by the company: web users who visit the site by chance are less interested in the company’s proposals than visitors who arrive on its platform via a specific channel. This explains why the average SEA conversion rate must necessarily be higher than for native pages.
Tips for optimizing your conversion rate
CRO, or conversion rate optimization, is based on analyzing the percentage of conversions achieved in order to increase them. To achieve this, you can start by analyzing the traffic on your website or online store. This technical audit enables you to determine where do the regular or one-off visitors to your web platform come from, estimate the time customers spend browsing and map out their behavior:
- Connecting to the web from your mobile.
- Site discovery itinerary.
- Use of Google search to get to the store.
- Prior product research, etc.
This process is an excellent way to understand the state of your traffic, your online visibility, your customers' expectations and to get an estimate of your bounce rate.
In short, to improve and optimize your conversion rate, you need to be able to handle professional-level data analysis tools (Google Analytics, for example).
Silvr offers its loan beneficiaries access to its business analysis tools. Customers receive support and advice to help them decipher their metrics and draw the best strategic insights from them. For example, a high bounce rate on certain pages followed by a mediocre conversion rate indicates that visitors attracted to the site are not finding what they're looking for. They're not part of the campaign's core target audience or business model, or the product isn't suited to them: the SEA campaign is probably too poorly oriented to obtain good conversions on all or part of the site's pages.
This example explains why marketing professionals are keen to get to know their personas in order to develop their conversion rate. Personas are broad consumer profiles, grouped according to age, expectations, online behavior and so on. These categories are obtained using specific software tools, online surveys, forms, etc.
The creation and analysis of personas is linked to improving the user experience, which is also a factor in increasing conversion rates. Based on UX Design methods, optimizing the user experience on one's platform is a good way to encourage web users to stay on the Internet store and explore its features and products.
Users are quicker to leave a site that loads slowly, doesn't function properly, is poorly organized and not very engaging, or is unsightly and messy. On optimized web platforms, conversion rates are higher, and visitors stay longer on the platform. Internet users enjoy discovering the site, navigating easily from one page to the next, benefiting from comfortable tools (search bars, chat help solutions) that accompany them through their purchasing journey.
That's why it's also a good idea to adapt the content of your website to your target customer, in order to improve your conversion rate. Offering personalized content that is consistent with the brand's image, products and values helps to create an attractive buying experience, build customer loyalty and arouse the curiosity of prospective customers. The content of a website must be designed to support the surfer at every stage of the buying process, which has an impact on the conversion rate: discovery, evaluation, purchase and loyalty.
This means optimizing SEO for each page of the site, and proposing CTAs (call to action) that are clear, fun, effective and adapted to the product and the customer. It's also essential to create a routine for monitoring KPIs. These performance indicators give you an overall view of your strategic online performance and enable you to improve your products.
