Conversion Rate

The conversion rate describes the percentage frequency with which visitors to a website perform a specified action. Common conversion goals in online marketing or e-commerce are, for example, the purchase of products from an online store, the provision of contact data for lead generation or the conclusion of a subscription.

Using conversion rate, marketing departments measure the percentage of conversions on a company website or mobile app. Conversions are specific goals that a company defines. They usually subdivide individual phases in a customer’s buying process on the way to the company’s service or product. Thus, a company can define both the call-up of a website as a conversion and the final purchase of a product.

The conversion rate describes the proportion of users in a particular buying process who have carried out the previously defined action (conversion).

Example: A website offers an e-book for free download. In return for the download, the website operator wants the prospective customer’s e-mail address in order to be able to keep him informed about his content in the future. Conversion, therefore, consists of turning the website visitor into an interested party in the content and into a contact of the company.

The company measures how many visitors come to the landing page where the e-book is offered and how many contact records are actually received. The conversion rate in this case is calculated as follows: Number of contact records received / landing page visitors *100 = Conversion Rate.

Types of conversions

A company’s so-called conversion funnel maps the typical sequence of conversions in a user’s buying process on a website. Various types of conversion goals can be found in this funnel. Among the most common are:

Click/Traffic: Traffic describes the number of users who visit a website. The clicks of the users are usually differentiated according to their origin: for example SEO, SEA or referrals. Increasing traffic is a widespread conversion goal, although the quality of traffic is often a much more important factor. The more a company targets the right users, the higher the probability that they will not leave the conversion funnel again. Traffic can be increased above all with suitable advertising, for example with Google AdWords, good search engine optimization and with the help of good content.

Prospects: A website visitor who shows interest in a company’s products or services is already one step further than a user who merely visits a page to read an article and then bounces back. Interested parties can be identified, for example, by the length of stay or the number of pages visited. Good usability, a cleverly constructed page and, above all, good and helpful content all contribute to achieving the conversion goal of turning the visitor into a prospect.

Lead: A prospect who passes on his contact data to the company becomes a lead. Prospects provide their data, for example, in exchange for a download, to register for the company newsletter, or simply because of a request for a quote. Marketing or sales can then contact these users to achieve further conversion goals. Generating leads requires interesting and high-quality content or a good product.

Registration: A prospective customer or a lead who is convinced by the products or the service of a platform or who wants to test them registers with his own account. The user is thus already so far advanced in his purchase intention that he considers a company as the provider of his product. Good usability, clearly formulated content and a good website structure help to persuade the interested party to register.

Purchase: When a user, having opened an account, finally purchases a product or service, he becomes a customer. The sale or sale is the most important and final conversion goal for many companies, although it can be defined in different ways (just like most other goals). From the shopping cart, to the payment methods offered, to the shipping terms: In the actual buying process, a great many factors can be optimized to help turn a prospect into a customer. At the same time, the risk of abandonment is relatively high here, as the customer usually comes to the point where they have to enter sensitive data such as address or even account details.

Influence on the conversion rate

Not every user has to go through every step of the conversion funnel. Some users skip steps, others drop out before or get in later. It is the task of the company to get the user into the individual stages of the conversion funnel with the help of various measures or to accompany him through the funnel as effectively as possible.

Many factors influence how well the conversion works in the individual steps and how high the conversion rate is. The range of influencing factors can basically be divided into uncontrollable and controllable influences.

The uncontrollable factors include seasonal or weather-related fluctuations. For example, the marketing department can only react to a small extent to the annual summer slump and can only optimize conversion here to a limited extent. Legislation or political influences can also hardly be controlled by individual companies.

The controllable factors, on the other hand, are those that a company can influence. Often, even small changes on a website or in the purchasing process can bring about major changes in customer behavior. The usability of the website, a clear structure and also the appropriate content are important conversion drivers. Technical shortcomings of a website, on the other hand, can have a negative impact on the conversion rate. Other factors include

  • the design of the website
  • the product range
  • testimonials and trust seals (elements that inspire confidence)
  • Prices
  • images and videos

Testing and conversion optimization

Meaningful tracking and, above all, effective testing are among the basics of conversion optimization. Usability specialists test everything – from colors to structures to content on websites and in online stores.

To do this, marketing experts formulate a hypothesis for improving conversion. They test this hypothesis, for example using different versions of a website, and measure the results. Based on their measured and tested data, they optimize their applications and websites and then test again. Conversion optimization is therefore an iterative process that serves as a basis for continuous improvement.

Measuring the conversion rate

Measuring conversion rate is often a major challenge for website operators. In order to be able to correctly track the actions and conversions of customers, a functioning tracking system must be implemented, the right goals defined and, finally, the data interpreted correctly.

Usually, users are tracked with the help of cookies, small snippets of code that are stored on the computer of the visitor of a website and thus make him recognizable. However, many other tools exist that can record user behavior in various ways. Whenever measuring and recording user data, website operators must consider data protection guidelines. For example, especially in Germany, data may not be recorded, stored or analyzed as desired.

Basically, conversions can be measured and expressed in numbers with tools such as Google Analytics. Heat mapping software such as CrazyEgg records where users click and how often and thus helps with conversion optimization. Tools such as Mouseflow also show where there is potential for optimizing a page by recording the user’s screen and thus making usability problems visible.

Many software providers have specialized in testing. The Visual Website Optimizer, for example, is a tool for testing and optimizing websites against each other. Unbounce, among others, is a helpful tool for quickly and easily building different landing pages and testing them against each other.

The conversion rate describes to what percentage a goal in online marketing was achieved. Conversion goals are diverse and range from increasing website traffic to generating repeat customers. A conversion funnel shows the individual goals and their typical sequence.

Many factors influence the conversion rate, some website operators can influence, others not. However, in order to be able to optimize the website and the conversion rate at all, effective tracking and measuring is necessary and exact and structured testing is recommended.

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