Your Conversion Rate is an essential metric to help you measure how well your ad campaigns are performing. It’s a great day when your Conversion Rate is up, but if it’s trending downward, you’ve got some work to do on your marketing campaigns. We’ve got everything you need to know about the Conversion Rate Meaning and how to make it work in your favor.
Conversion Rate Meaning and Understanding
Let’s start with the basics: how does one define “Conversion Rate”?
Simply put, it’s the percentage of users that take a desired action. In the case of an ad campaign, a desired action means they bought something on your website.
A conversion event is a little different from your Conversion Rate. The difference lies in the fact that a conversion event could be a sale, or it could be something like one of these actions:
- Submitting a contact or lead generation form
- Calling your business number
- Starting a chat with one of your reps
- Signing up for a free or paid subscription
- Registering on your site
- Downloading material or an app
- Upgrading their service
- Engaging with your site by spending time on it, making repeat visits, visiting multiple pages, etc.
On the other hand, your Conversion Rate tells you how many prospects are on the way to becoming a bonafide, cash-paying customer.
You’ll need to pick a specific period of time to establish a baseline to measure your conversion rate. It can be a month or longer. Try to choose a period that represents an average sales period. If you haven’t built up your sales yet, you might want to choose a longer period so you get more accurate data.
OK, so now that that’s out of the way, what is a good Conversion Rate? The not-so-great answer is...it depends.
These are some of the factors that impact your Conversion Rate:
- The quality of your traffic
- The type of industry
- The type of business
- The type of products you’re selling
- The conversion action you’re tracking
To be perfectly honest, a good Conversion Rate is one that’s right for your company, which is why you need to establish that all-important baseline. Generally, marketers aim for something in the 1% - 10% range.
As a note, your goal should be to optimize the Conversion Rate, not maximize it. Be leery of spending so much on conversions that you’re eating into your profits. By tracking your Conversion Rate, you'll be able to modify your campaign design so it aligns with a good customer experience, which is a key to strong competitiveness.
Conversion Rate Optimization Tips for 2021
Ok, now that we've discussed the Conversion Rate meaning (and how to differentiate it from conversion events, let's ask another important question: why such a big focus on Conversion Rate Optimization (CRO)? The answer is quite simple: working hard to bring traffic to your website is, obviously, quite important. But if you want to run a successful business, that’s just not enough.
Those sweet dollars start rolling into your accounts when you actually convert all that traffic. Conversion Rate data tells you whether or not you are getting your visitors’ interest (enough for them to spend money on your site by adding products to their shopping carts and completing the checkout process).
Following some basic Conversion Rate Optimization best practices, you could potentially boost the number of conversions. It’s not an exact science, but it’s as close as it gets when you want to make sure all your marketing efforts are really paying off.
For example, here are 10 tried-and-true CRO best practices.
- Follow CRO best practices in a general sense. We’d love to give you an exact formula for Conversion Rate Optimization, but the truth is everyone’s data is different. Data tells you how your visitors are using your site, and that’s going to be different from every other company. The key is to learn from your data, use it to optimize your conversions, and be sure to test out your strategies.
- Always use data-driven strategies for Conversion Rate Optimization. Data is available to you in the form of web analytics, lead data, customer survey data, and more. Use it! It informs you about consumer behavior, what they want, and why they don’t check out after putting an item in your shopping cart.
- Check out the competition, but rely on your own data. It’s not a bad idea to check out the competition, but just because they have a flashy website doesn’t mean their Conversion Rate Optimization is working well. Rely on your data and strategies, not theirs.
- CRO is not one and the same asl A/B testing. A/B testing is one way to validate your hypotheses and theories, but CRO optimization is much more than that. It provides a way to conduct quantitative and qualitative analysis to gain insight into how your users interact with your website.
- Conversion Rate Optimization begins with a hypothesis. For example, let’s say you think that customers aren’t completing the checkout process because the discount you’re offering is too low. Your hypothesis might be that a 15% off discount will net more conversions than a 10% off discount. Run two scenarios and check your conversion rate. Once you’ve established brand loyalists, a 10% offer might be sufficient. Other areas to test are your headline, call-to-action (CTA), and images.
- Set specific goals. This will give you a way to determine whether your experiments are successful and the data you gain from them could give you insight for further testing. The bottom line is to set one primary goal for each test so you know exactly what you’re measuring.
- Track your goals in Google analytics. You get to decide what goals you want to track, so be sure to set them up before you launch every experiment so you know whether your experiments worked. If you forget, you’ll have to re-do an experiment and that wastes time.
- Invest time in creating a quality dedicated landing page. You’ll get the most out of paid advertising campaigns when you're sending traffic to a dedicated landing page in lieu of your home page. It’s a simple, easy way to do Conversion Rate Optimization.
- Improve your website with these Conversion Rate Optimization tips:
- A/B test different elements on your pages.
- Create headlines that clearly communicate your value proposition.
- Use a strong CTA.
- Change the size or color of your CTA button to make it stand out.
- Keep your CTA and other important stuff above the fold.
- Consider adding a video.
- Use only high-quality product images.
- Optimize your pages for mobile.
- Devise a way for customers to call or chat with you.
- Don’t make edits in the middle of an experiment. It will skew your results. Here’s a better plan. Stop your experiment, make a copy of it and edit it, and then start a new campaign.
- Create multiple landing pages and segment them for specific transactions. Design each landing page to match the user intent and/or test out different hypotheses. Here’s a rule of thumb for you — match the user intent right where they’re at and make a conversion.
- Base your CTAs and offers on user intent. If the user intent is informational, feed them content. If their intent is commercial investigation, give them as many details as possible to demonstrate why your product is superior to the competition.
How Does Intent Optimization Help with CRO?
As you pursue Conversion Rate Optimization, intent optimization is one of the important matters to keep in mind. Yes, indeed, CRO is larger than Google Ads intent optimization, but the two are intrinsically connected, as intent optimization allows you to fine-tune your ads for better conversions (and thus, better ROAI).
In essence, intent optimization helps you determine things like:
- How much time people spend on your site before they convert
- How many pages they visit
- What IPs or Geolocations converting users come from
- What ad placements work best
- What devices they convert on
How does this help you improve your CRO? When you know what things work well with your ad clickers (i.e. what converts them into buyers), you can focus on that and eliminate all other sources of wasteful clicks that don’t bring the ROAS back to you.
In case it’s not already abundantly clear, tracking your Conversion Rate allows you to get inside your site visitors’ heads (metaphorically, kind of). You get clarity around how they think, what attracts them to your brand, and most importantly, what gets them to hit your CTA button.
As a final piece of wisdom, it’s nice to see your click-through rate go through the roof. However, it doesn’t mean anything if all those clicks aren’t converting to sales.
The good news about this is that if something is broken, you can fix it, and intent optimization can definitely help. We’re pretty good at this (no false modesty here), so check out what we do, sign up for our newsletter, and let’s stay in touch if you want to find out more about making the most out of your Google Ads.