Conversion Rate

The conversion rate of a web page is measured by the number of potential visitors performing the desired action, whether the action is buying a product, filling out a form, or achieving some other goal of the web page. Very simply put, a conversion rate is measuring the ratio of conversions over a relevant denominator. This places a drastic importance on an organization spending the proper amount of time and resources on optimizing conversion rates. As conversion rate optimization becomes more popular, it’s important to learn the secrets, trends, techniques, and methods that are allowing businesses to massively improve their conversion rates. It is one of the most important growth techniques, because it allows a business to earn more revenue from existing customers, instead of paying more to acquire new customers. It is important to remember that conversion rate analysis needs to be used in conjunction with other analytics tools because the results are not always very telling. 

For example, an ecommerce site’s higher conversion rate doesn't always mean higher performance. Here are the statistics for two days of activity on an ecommerce site:

Day 1: 4% conversion rate. (5000 visits, 200 sales)

Day 2: 10% conversion rate. (1000 visits, 100 sales)

On day two, conversion was more than double the rate from day one. However, reading the actual numbers hidden behind the overall conversion rates, it's easy to see day one was a much better day for the business. This, of course, is operating under the assumption that all of the business’s OPEX remained stagnate over the two days. 

Conversion rates can also be skewed in that not every visitor has the potential to convert. Visitors could be doing a number of tasks such as checking an order status, sending links to friends etc. Another thing that is interesting about conversion rates is that conversion rate optimization is about simplicity. There is a lot of technical aspects to conversion rate optimization, but making your site more engaging will often times reduce conversion rates. This seems contrary to everything taught in advertising, public relations and any form of marketing, but many statistics have proven that a site that entertains its visitors will have a weaker conversion rate. 

Conversion Rate Optimization Is…

• A structured and systematic approach to improving the performance of your website

• Informed by insights—specifically, analytics and user feedback

• Defined by your website’s unique objectives and needs (KPIs)

• Taking the traffic you already have and making the most of it

Conversion Rate Optimization Is Not…

• Based on guesses, hunches, or what everyone else is doing

• Driven by the highest paid person’s opinion

• About getting as many users as possible, regardless of quality or engagement

Businesses of all sizes are beginning to look closely at their conversion rates as it is has a direct tie to sales or any focus of the site. This “simpler the better” methodology creates a very difficult task for marketers who are looking to do the next cool thing by innovating. 

References: 

Patel, N. (March, 2016) 6 Things You May Not Know About Conversion Rate Optimization. Retrieved from: http://www.forbes.com/sites/neilpatel/2016/03/07/6-things-you-may-not-have-known-about-conversion-rate-optimization/#7b2202cf4f0e

Barker, D. (April, 2013) Why Conversion Rate is a Horrible Metric to Focus On. Retrieved from: http://www.smartinsights.com/goal-setting-evaluation/goals-kpis/why-conversion-rate-is-a-horrible-metric-to-focus-on/

Qualaroo. (October, 2016) What is Conversion Rate Optimization. Retrieved from: https://qualaroo.com/beginners-guide-to-cro/what-is-conversion-rate-optimization/