What is Conversion Rate? Types, Formulas & Optimization Methods

ACTIVELY SHARE, Conversion Rate – When running an online marketing campaign on e-commerce, we need a clear parameter to measure the success of the campaign.

For business owners, it will be ridiculous to measure their online marketing campaign success simply based on intuition or personal opinion.

The term Conversion Rate consists of 2 words, namely conversion and rate. Conversion is a situation when a website visitor takes an action that benefits the business.

For example, by becoming a Youtube subscriber, registering as a member, downloading ebooks, subscribing to newsletters to buying products. While rate means ranking.

If you want to know more about conversion rates, it’s best to understand the definition of conversion first.

Conversion is a situation where a website visitor takes an action that benefits the business. Come on, read the article below.

If you pay attention to the analytic tools in digital advertising services, you will definitely find a matrix called conversion rate.

You should pay attention to this matrix to monitor how effective your digital marketing strategy is. This relates to the percentage of web visitors who take the action you are targeting.

What is Conversion Rate?

Before knowing what a conversion rate is, you must first know what is conversion.

In the context of digital marketing, a conversion is an “action” from an audiences / visitors that benefit your business, for example: subscribe to your mailing list, fill out forms, download content, contacting you via phone or live chat, or simply to make purchases.

Conversion rate is a matrix that shows the conversion ratio (in percentage) of all web visitors who successfully take the “action”.

Then what is the conversion rate function? You can use this matrix as a reference to analyze how effective your digital marketing tactics are.

And conversion rate can also be used to measure other marketing channels, not limited to website. For example, email marketing, paid advertising, and other types of channels your business is using to market your products.

In other words, you can use this matrix to measure broadly or specifically.

Types of Conversion Rate

As we mentioned above, conversion rate can be used to evaluate your digital marketing strategy. That’s where the different types of conversion rates come from. Disruptive Advertising divides it into several types:

  • Overall conversion rate. Measures how well your website can convert traffic from all sources.
  • Marketing channel conversion rate. You can check, which ad channel is generating more conversions. Are Google Ads, Facebook Ads, Twitter Ads, Tiktok Ads?
  • Page-level conversion rate. Each page on your website has a different performance. You can see which pages are interesting enough for your audience and can get a lot of conversions.
  • Campaign conversion rates. This matrix can be used as a reference to analyze whether your ad campaign has a positive impact.
  • Individual ad conversion rates. This is still in the realm of digital advertising. This matrix can help you analyze more micro things, for example, related to copywriting.
  • Keyword conversion rate. This type is very specific. You can analyze which keywords are effective in increasing conversions and are worth optimizing for.

The list above is just the surface. You can evaluate the performance of each aspect or digital marketing channel with this matrix.

Why Conversion Rate Matters

In this context, conversion rate (CR) is often compared to click through rate (CTR).

Between conversions vs. click through rate, which one is more important.

In fact, these two matrices affect different channels in the marketing / sales funnels.

Click through rate (CTR) is a matrix to measure how many people click on your ad and lead to your website or landing page. In other words, it is to measure audience action before entering the website.

CTR intersects with the top of the marketing funnels. You can refer to this matrix if you want to optimize your web ranking in search engines or increase traffic to your blog.

While conversion rate (CR) intersects with the middle to the end. This matrix will measure the audience’s actions once they are on the web.

You can refer to CR when you want to increase the number of subscribers, register for a free trial, download e-books, download or upgrade to a software, make purchases, or participate in webinars to make purchases.

Many think that it is useless to gain a lot of clicks but minimal conversions. But in reality, high clicks have the potential to boost conversions.

Higher CTR Higher Conversion Rate Picture
Higher CTR Higher Conversion Rate Picture / Source: Wordstream.com

In conclusion, both CTR and CRO are important aspects for your success, therefore you should pay attention to them and optimize them together.

How to Increase Conversion Rate

Conversion rate optimization (CRO) is a series of strategies to increase the conversion rate of a website.

The following are some CRO strategies that you can apply.

1. Change The Offer, Be Sure It’s What People Need

There are too many businesses that provide the usual offers on their landing pages. If you make the same offer, then what’s so special? Is “out of the box” just a slogan?

Try to get your audience’s opinion. Find out what they need and what offers you can meet.

You can also explore more and try out some unique offers.

2. Change Current

Don’t let the flow to conversion hit you with a “barrier”.

For example, to download an e-book, you ask for very detailed informationThat intricate form is a hindrance.

Audiences who don’t think it’s worth it to exchange their full identity with a simple e-book will definitely feel discouraged to continue.

Therefore, you must design a more efficient conversion current for your audience.

3. Optimizing CTA

A CTA or call-to-action may seem trivial, but it’s a pretty crucial aspect.

According to Hubspot, the most effective CTA for generating leads is “text” rather than images. You can also place it in blog articles.

To optimize it, you have to think about its placement and write a seductive sales copy (learn copywriting tips then).

4. Utilize Pop Ups

When you open a web, you must have seen ad banners that suddenly appeared. It is a pop up.

You can use it to convey your offer.

Optimized pop ups with attractive designs, with a  precise copywriting, and unique offers.

5. Utilize the Chat Box

The chat box will make it easier for your web visitors to connect with customer service. So when they need additional information, your customer service can immediately respond.

Sometimes a person needs more encouragement to be more confident when making a buying decision. With a chat box, you can convince your audience more easily.

6. Optimizing Potential Blog Posts

If you have a blog post that has a lot of visitors, you can optimize it by displaying a special pop up for that page or implementing a CTA on it.

In addition, prioritize these posts to always get updates so that the content remains relevant.

7. Remarketing Ads

Of course not all your web visitors will take action.

But most of them must be quite potential. To maintain their awareness of your business so that they are compelled to take action someday, you can take advantage of remarketing ads.

With remarketing, audiences who have just entered your website will see ads about your business on other websites they visit.

8. Test the Landing Page

In this strategy, you have to spend quite a lot of effort. Anyway, work hard like a horse.

To be able to find a landing page concept that is effective at generating conversions, you have to do a lot of testing.

You can present several landing page concepts with different flow, offers, messages, content, copywriting, and other elements.

You only need to test it on 10 landing pages. After that, find the most effective formula and optimize your landing page with that formula.

How to Calculate Conversion Rate

To calculate the conversion rate you can apply a certain formula called the “conversion rate formula” . You can see the formula from the following image:

Conversion Rate Formula Web
Conversion Rate Formula Web / Source: WPExplorer.com

So let’s say, you have 1000 visitors, and 400 of them hit the call button (Visitors who convert), so to calculate the conversion rate for this data is.

400 / 1000 x 100.

Conversion Rate = 40%

The formula above is generally to calculate the conversion rate on a website.

Those of you who do business in the marketplace can also calculate conversion rates with the e-commerce conversion rate formula. In general, the formula is the same, only the object is more specific to your store in the marketplace.

ECommerce Conversion Rate Formula
ECommerce Conversion Rate Formula / Source: Quora

Actually you don’t need to calculate it manually. There are already many conversion rate calculator platforms you can use, for example from Webfx.

Even various analytics tools can directly show the conversion rate in its interface.

So what is the ideal conversion rate?

WordStream did some research to find out.

The conversion rate for landing pages across all types of industries averages 2.35%. But 25% of all researched lists, can get a conversion rate of 5.31%.

Achievement of an impressive conversion rate of 11.45% or more. But that’s only 10% of the entire list.

If you take the average figure, 3% – 6% might be enough. But do you really want to be an average guy? You still have a chance to optimize it to above 11%.

Conversion Rate: A Matrix for Evaluating the Effectiveness of a Digital Marketing Strategy

When your business ventures into the world of the internet, you need to be familiar with data. Conversion rate is one of the important data matrices for you to observe.

The conversion ratio shows the percentage of the number of web visitors who take the action or actions you are targeting, for example: subscribedownload e-books, register for webinars, try trial products, to make purchases.

You can analyze this matrix to evaluate how effective your marketing strategy is.

Main Conclusion

By optimizing your conversion rate, you can increase the profitability of your business. Do trial and error until you find the most effective strategy to increase conversions.

Knowing what a conversion rate is is very important so that you have a clear vision in running digital marketing, especially if you have an online store.

The conversion rate marketing technique is a technique that can determine the success of an online marketing campaign.

Because if more people convert, the more profit you will get. This technique is suitable for you business owners to attract people who visit your website to make conversions.

For an effective percentage for your business you must get a conversion rate according to your target calculation. So you don’t get a loss when you use Google Ads, Facebook Ads, and Instagram Ads.

You can apply the conversion rate on your website and your business social media more effectively after understanding the conversion rate explanation

In addition, you should also use high-quality web hosting  to maintain the trust of your customers. With the web hosting that Hostgator offers, your website will always have high performance.

Hopefully this article can benefit you and add more insight about this field..

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