Any serious business should care about its conversion rate. For starters, a conversion rate represents the percentage of visitors who’ve completed the desired action.
Here’s how conversion works. Let’s assume that you own a cosmetic business. You decide to run an advertising campaign on Instagram that attracts 10,000 views.
However, out of the 10,000 views, only 400 users click on your ad. In such a scenario, your average conversion rate is 4%.
How Do You Calculate Conversion Rates?
According to Google, here’s how to calculate conversion rates.
“Conversion rates are calculated by simply taking the number of conversions and dividing that by the number of total ad interactions that can be tracked to a conversion during the same time period. For example, if you had 50 conversions from 1,000 interactions, your conversion rate would be 5%, since 50 ÷ 1,000 = 5%.”
That’s what Google says, but conversion rate calculations may vary depending on your goals.
Let’s go back to the cosmetic business for a minute. While your primary aim is to sell cosmetic products, you may also have other conversion rate goals, like getting more people to follow you.
Here’s how you’ll calculate the median conversion rate. Total conversion – Unique visitors divide by the number of visitors with any conversion. Subscriber conversion – Unique visitors divide by the number of new subscribers.
Shopper conversion – Unique visitors divide by the number of new subscribers.
As you can see, tracking the number of visitors is crucial to helping you keep track of your conversion process.
You can use a tool like Google Analytics to know the number of prospects coming to your website, including first-time visitors. With these numbers, it becomes easier to calculate your ability to convert visitors into leads.
So, What’s a Good Conversion Rate?
Conversion rate benchmarks vary depending on several factors, including your target audience, customer base, industry, and business model. The ideal conversion rate should be anywhere between 1 and 3 percent. Essentially this implies that a significant percentage of users will never complete your desired action.
After all, not every person who lands on your ecommerce website intends to buy.
Sure, that percentage of visitors seems insignificant. On the flip side, though, if your ecommerce conversion rates fall anywhere between the mentioned figures, you’re doing pretty good.
Let’s say you have a customer base of 50,000 users, and your current conversion rate is 3 percent. With such a percent conversion rate, it means that 1,500 of your target audience is buying.
As a business owner, your job is to create customers journeys that can help trigger an increase in conversion rate and the number of first-time buyers. Speaking of goals, your conversion goal should surpass the 3 percent threshold. In fact, 75 percent of advertisers struggle to maintain conversion rates of over 5 percent.
Ultimately, you want to hit 10 or 20 percent or more conversion rates. That way, your percent conversions will be three or five times higher than the average conversion rate.
Conversion Rates by Industry
As stated, your niche is one of the factors that determine the average landing page conversion rate. So, what if you’re in an industry with a low conversion rate?
Well, even in niches known for low conversion rates, you should hit 2 to 5 percent.
That said, here is a breakdown of the average ecommerce conversion rate by industry.
Bottom Middle Top
Ecommerce 1.84% 3.71% 6.25%
Legal1 07% 4.12% 6.46%
B2B2 23% 4.31% 11.70%
Finance 5.01% 11.19% 24.48%
From the stats above, conversion rates for ecommerce businesses are noticeably low when pitted against finance, especially when you consider the top tier. Likewise, B2B websites rates are higher than ecommerce conversion rates.
It is important to mention that ecommerce businesses with a 3.71 percent rate could be generating more revenue than a legal firm with a 6.46 conversion rate.
Because the legal niche doesn’t draw a lot of buyers compared to an e-commerce website.
Why Are Conversion Rates Important?
Conversion rates allow you to see how your online advertising campaigns stack against each other. E-commerce conversion rates are especially crucial when you want to monitor mobile user acquisition since you can use them to measure the success of marketing campaigns.
Keep in mind that conversion rates don’t always refer to your click through rate. They can also refer to what happened down the sales funnel.
For example, you can calculate the percentage of users who installed your app (assuming that’s what you’re marketing) or completed an in-app action. These figures are essential for marketing managers and business owners because they can pinpoint valuable users.
This data can be reconsidered in the marketing funnel to boost your campaign’s performance. When implemented correctly, conversion rate analysis can tell which promotion channels work the best and, by extension, guide your online advertising campaigns.
Staying with the app example, if your data indicates lower conversion rates than you’d anticipated, it could be that you need to improve the user experience.
How to Improve Your Conversion Rate
At this point, you know why conversion rate is essential and how to calculate it. The last piece of the puzzle is to know how to increase your average e-commerce conversion rate.
That said, here’s a rundown of conversion rate optimization strategies.
Revise and Personalize your Offer
Start by personalizing your offer …because that’s what your customers want.
So, be sure to collect data and give them what they want. Some of the ways you can gather information include cookies and forms.
If you have an ecommerce store that sells every product type, including cameras, USB cables, and such.
If a customer searches for “best cameras,” lands on your website but is met with a huge offering of USB cables at a discounted price. The customer may not necessarily convert since your ad wasn’t personalized.
On the other hand, there’s a higher likelihood of conversion if the ad promotes cameras.
Consider Cart Abandonment
One of the most common challenges most ecommerce stores have to deal with is cart abandonment. When a customer abandons a cart, they land on your site, choose a product, add it to the cart but leave without buying.
According to statistics, the average cart abandonment rate is 79.17 percent. However, just like conversion, your cart abandonment rate depends on a couple of factors, like your industry.
To experience increases in conversion, you must pinpoint what’s causing cart abandonment. Common problems include:
Lack of enough payment options
Website crashes or errors
Site looks unreliable
Complex checkout process
The customer can’t see the total costs
The customer has to create an account
Slow delivery or a bad return policy
Some basic optimizations to reduce card abandonment include adding an SSL certificate, simplifying the checkout process, and avoiding hidden charges.
First-time visitors hardly buy – they need to trust your online store before spending their money. In fact, a buyer can visit your website 7 times before buying.
You can, however, use remarketing to increase your conversion rates.
Remarketing involves focusing your marketing strategy around people who’ve already interacted with your brand.
You can target your former customers to prospects interested in your offer.
Because 43 percent of people who see your Google Ads are likely to convert.
Besides, the clickthrough rate for retargeted ads is ten times higher than the average display ad CTR.
The thinking behind retargeting is that customers are likely to be more interested in a product or business services they’ve seen before.
Implement A/B Testing
The surest way to determine what’s working and what’s not in your marketing campaign is to run A/B tests.
A/B testing is a rigorous process that requires patience. So, wait for a month or two to get a true picture of what’s happening. Also, you won’t experience a sudden increase in conversion. In fact, A/B testing may lower conversion, in which case you should revert to what was working before.
Polish Your Customer Support
A superb customer support desk website is likely to record high conversions.
Even though offline support doesn’t always necessarily translate to a positive impact on conversion, online support matters.
So, be sure to set up an FAQ page on your website covering all the basic concerns your customers may be having.
On top of that, consider integrating a live chat feature into your website.
Live chats can increase your income by 48 percent and boost conversion rates by 40 percent.
The Bottom Line
An average conversion rate of 1 to 3 percent isn’t enough. You should aim to achieve a rate of 5 percent – and we can help you ace your conversion rates.
Growth Generators offers conversion rate optimization services irrespective of your niche or industry.
Get in touch with us today to talk to our experienced digital marketing to help create and launch a conversion rate optimization campaign that’ll rake in the revenue you deserve.