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What is a conversion rate, why is it important, and how can you increase yours?

By June 16, 2017 October 9th, 2018 Business, Design

What is a “conversion rate”?

Definition: The conversion rate is the percentage of users who take a desired action. The archetypical example of conversion rate is the percentage of website visitors who buy something on the site.

Basically, it’s a measurable result based on your desired action for your website visitor to take. If you are a custom home builder, you may measure it by how many phone calls your website generates. If you run an e-commerce site, you may measure it by how many purchases are made online. If you are a fishing guide, you may measure it by how many bookings you get.

Your conversion rate is a way to track the success of your website and/or  your marketing campaign. You can define it by figuring out what percentage of your site visitors take the desired action you wish them to take. This is the best way to track how successful your website or online marketing campaign is.

Why is it important?

Let’s say you own a construction company and you run $1,000 a month worth of ads on Google. Your average sale is around $2k. If your $1,000 a month is getting you 250 paid site visitors a month and your conversion rate is 1% (assuming you are defining your conversion rate as “site visitors turned into paying clients”), then your conversion rate is paying you back (on average) 5x your investment in your Google Ads campaign. If your profit margin is 40%, then you have a good ROI on your Google Ads campaign.

But… what if your website had a conversion rate of 2%? What would that do for your bottom line? You could double your ROI! That would mean that your $1,000 in ads would be generating $10k in revenue! And, you wouldn’t have to spend another nickel on advertising. In fact, many people we work with actually increase their conversion rate and lower their ad budget. They spend less and make more.

How to easily increase your conversion rate.

There are innumerable ways to increase your conversion rate. You could adjust the terminoligy in your ad campaigns, be better at answering the phone, reply to emails quicker… etc. However, the simplest way is via your website itself.

  1. Know who your ideal client is and speak their language on your website. Identify who you are marketing to, speak to their pains, and they will gravitate to you.
  2. Have a primary call to action. Make it very clear on your website as to what you do and what your desired action is for the site visitor to take. If you are a salon, for example, you want people to “book now”.
  3. Have a secondary call to action. Some people just aren’t ready to buy “right now”. So, you need a way to keep in touch with them. Offer them a “deal” if they give you their email address so that you can “re-market” to them via email. You could offer a newsletter, a coupon code, an e-book…. etc. This gives you the permission to market to them via email so that you can keep your business out in front of them constantly. Every major company does this. You should too.

So, what should you do?

Get to work! Despite how it may seem, the world wide web doesn’t run itself. If you want to spend less, make more, and increase your conversion rate, it takes a little work. But the rewards are well worth it! If you need help, we’re here for you. Just drop us a note.

Clay Eavenson
Owner
SteamWorks