If you are investing time and money into digital marketing, you naturally want to know: is it actually getting people to take action? Conversion rates can help you look under the bonnet and peer into the engine.
A conversion rate helps you understand how often people who visit your website, landing page or campaign complete a desired action.
It is a useful metric for measuring whether your digital marketing is turning interest into something more valuable, such as an enquiry, sale or booking. But what exactly is a conversion rate, and how do you calculate it?
What is a conversion rate?
A conversion rate is the percentage of people who complete a desired action out of the total number of people who had the opportunity to do so. The action is known as a conversion.
What counts as a conversion depends on your business and your objectives. It could be:
- Making a purchase
- Filling in a contact form
- Booking an appointment
- Requesting a quote
- Signing up for an email newsletter
- Downloading a guide
- Registering for an event
- Making a phone call
So, a conversion does not necessarily mean making a sale. It is any action that represents a valuable step towards your marketing objective.
How do you calculate a conversion rate?
The basic conversion rate formula is very simple:
Conversion rate = (Number of conversions ÷ Number of visitors or interactions) × 100
For example, imagine your website receives 1,000 visitors in a month and 40 of them complete your contact form: 40 ÷ 1,000 × 100 = four per cent conversion rate.
That means four per cent of your website visitors completed the action you were measuring. The same principle can be applied to individual marketing campaigns, landing pages, adverts or other channels.
Why is conversion rate important?
Website traffic can look impressive, but traffic alone does not necessarily mean your digital marketing is working. Imagine one website receives 10,000 visitors but generates just 20 enquiries, while another receives 2,000 visitors and generates 100 enquiries.
The second website is attracting fewer people but is producing more enquiries. This is why conversion rate provides useful context. Rather than simply asking how many people visited your website, you can ask ‘what did those visitors actually do?’
What is a good conversion rate?
This is where it gets a little more complicated. There is no single conversion rate that every business should aim for. Conversion rates vary considerably depending on the industry, type of website, product or service, traffic source, audience and conversion being measured.
For example, buying a low-cost product online is a very different decision from requesting a quote for an expensive service. Rather than obsessing over an arbitrary benchmark, it is often more useful to monitor your own conversion rate over time.
If your conversion rate increases following improvements to a landing page, for example, that could provide useful evidence that the changes are working.
Conversion rate vs click-through rate
Conversion rate is sometimes confused with click-through rate (CTR), but they measure different data. CTR measures how many people click on a link or advert after seeing it.
Conversion rate measures how many people complete the desired action after reaching the relevant page or stage of the journey. An advert could therefore have a strong CTR but a poor conversion rate.
People may be interested enough to click, but something on the landing page could be stopping them from taking the next step. This is why looking at the whole customer journey is important.
What can improve your conversion rate?
If your conversion rate is lower than you would like, there are several areas worth investigating. Start with the page itself. Is it clear what you are offering? Can visitors quickly understand what they should do next?
Your calls to action should be easy to find and understand. Forms should not ask for unnecessary information, particularly if a shorter form would be enough to start a conversation.
Website speed and mobile usability matter too. If a page is slow, confusing or difficult to use on a smartphone, potential customers may simply leave.
Trust can also make a difference. Clear information, reviews, testimonials, case studies, guarantees where appropriate and straightforward contact details can all help reassure visitors.
How does SEO affect conversion rates?
SEO and conversion rate optimisation are closely connected, but they have different jobs. SEO helps attract relevant visitors to your website.
Conversion rate optimisation, often shortened to CRO, focuses on making the website more effective at encouraging those visitors to take action. There is little value in generating huge amounts of irrelevant traffic if those visitors are unlikely to become customers.
This is why quality and relevance matter as much as traffic volume. The search terms bringing people to your website should reflect what you actually offer, while your landing pages should answer their questions and make the next step obvious.
Conversion rates and paid advertising
Conversion rates are particularly useful when measuring paid advertising. If you are spending money to generate clicks, you need to know what happens after someone arrives on your website.
For example, an advertising campaign might generate plenty of traffic but very few enquiries. That could indicate an issue with the targeting, advert messaging, landing page or overall customer journey.
Looking at conversions alongside metrics such as cost per click and cost per conversion gives you a much clearer picture of campaign performance.
Keep measuring and improving
Your conversion rate is not a number you calculate once and then forget about. Digital marketing is an ongoing process, and small changes can affect how people interact with your website.
Keep an eye on your conversion rates across important pages and campaigns. If something changes significantly, investigate why. You can then test different headlines, calls to action, page layouts, forms or messaging to see whether they improve results.
Turn more website visitors into customers
Understanding your conversion rate gives you a much better idea of what your digital marketing is actually achieving. It moves the focus beyond traffic and clicks and towards meaningful actions.
Want to get more from the traffic your digital marketing is already generating? Get in touch with our team to find out how they can help you analyse your website, campaigns and customer journey to identify opportunities for improvement.