What are Conversion Rates?
Conversion rates are the rates at which visitors to your website complete a pre-determined action. For retailers, this action is usually when the visitor makes a purchase. Conversion rate is influenced by many internal and external factors. Testing, personalization, and optimization can help determine which factors are helping your conversion rate and which are hurting it.
Calculating Conversion Rates
To calculate conversion rates, consider the following formula:
Conversions/total number of visitors = conversion rate
Tracking Conversions by Industry
Conversions can vary across industries and can be different from business to business. Below are some examples of conversions your company can track:
For ecommerce companies, conversion rates may include the following:
- Add to Cart rates
- Purchase Rates
- Newsletter sign-ups
For organizations focused on business and leisure travel, the following can be tracked:
- Trips booked
- Social shares
- Newsletter sign-ups
- Product Demonstrations booked
- Leads generated
- Email sign-ups
- Webinar registrants
Conversion Rate Benchmarks
Understanding conversion rate benchmarks can help you understand how you rank among the competition. In the US, conversion rates generally range between 2-3% and in Great Britain conversion rates tend to range between 3-4%.
Although these are the average conversion rates, the top 25% are experiencing conversion rates of about 5.31%. To qualify for the top 10%, landing pages should be seeing conversions of 11.45% or higher.
How to Improve Conversion Rates
When discussing conversion rates, many often look at button colors or the font for the headline. While this may influence a consumer’s decision, these are likely not the key areas to optimize. The first step to really improving conversion rates is to identify the area that presents the most opportunity. This could include optimizing high-value pages with best selling products, areas that are not converting, or specific website pages to drive a predetermined action. Once these areas are identified, consider the following:
Personalization is correlated with higher revenue due to its ability to connect with pre-existing and new customers. In fact, 77.4% of companies with a personalization program, reported revenue growth in 2018. In contrast, only 45% of companies reported growth, when they didn’t have a personalization program in place. Personalization increases revenue through better customer engagement or conversion rates and many companies are enjoying success through this new trend. For example: BMW personalized MMS messages to its customers which drove a 30% conversion rate and delivered $500,000 in revenue.
Product recommendations should be a key part of your personalization strategy if you are an ecommerce business. When product recommendations even inspire minimal customer engagement, they lead to a 70% increase in purchase rates. However, they don’t only deliver on short term revenue, but they also drive more customer loyalty. When these customers who received product recommendations return, they have a 55% higher chance of making a purchase. Additionally, when comparing a session where a consumer abandoned their cart with a recommended product and comparing a session where a consumer abandoned their cart without a recommended product, return sessions for those served product recommendations are 45% more likely to convert.
Optimize Landing Pages for Conversions
Optimizing landing pages to drive conversions can help increase the number of downloads or other predetermined actions. To do this, make it clear what you are offering especially in the headline, so users are sure they are in the right place. Aim for clarity and eliminate jargon from your headline and body copy.
Landing pages should also highlight benefits and selling points for your product. Consider what differentiates you from your competitors and add these into the body. Additionally, if you have testimonials, you can consider adding these to your landing page as social proof.
Also, make it easy for users to convert. A clean design with plenty of white space and a CTA that is easy to find can cater to a successful landing page.
If you are a newer company or don’t have much brand awareness, it is important to include trust signals on your website or landing pages. Testimonials or certifications can serve as social proof for your products and company. Additionally, offering free trials for your software solution or featuring thought leadership in industry publications can offer credibility for your brand.
In an A/B test, you create two versions of a webpage or app screen to discover which performs better. By testing different elements of a page or different designs, your team can gain insight into what resonates better with customers and apply those learnings to future campaigns.
When preparing to launch their newest version of SimCity, EA created two landing pages: one with a banner to preorder the game without an offer, and another that had a banner at the top of the page offering customers a promotion for $20 off their next purchase. The second variation of the landing page drives over 40% more purchases. Even though a test may seem like the results would be intuitive, they often aren’t, so be creative with what you and your team test.
Offer Something New
If you’re still not seeing conversions, changing the offer itself can help drive up conversions. Software companies typically offer free demonstrations or free educational content. To tackle this issue more creatively, Wordstream created a landing page encouraging users to grade their AdWords performance. Testing various offers to see how they perform could help drive conversions and leads.
Find out more
TheMonetate Personalization Engine’s powerful decisioning capabilities can make complex decisions in real-time. Our machine learning algorithms decide which data is most relevant and which action will have the highest probability of achieving a specific outcome such as increased average order value (AOV) or conversion rates.