Also known as percentage or conversion rate, the conversion rate is one of the most important metrics of performance-oriented campaigns and any e-commerce or web page whose objective is to generate sales, records or downloads.
It is the metrics responsible for measuring advertising efficiency, which indicates the percentage of users who end up making a conversion, which can be a purchase, a registration, become a follower in a social network or, if they are bold like us in Praise! even a test drive and driving!
All this depends on the brand strategy and the objectives of the campaign. That is why they are widely treated, discussed and negotiated in the usual interactions between agencies and customer marketing departments. It is one of the most important Key Performance Indicators (KPI’s) of any digital campaign and defining it properly is vital to be able to measure its performance. That is why optimising it (CRO = Conversion Rate Optimisation) should be a common practice to improve the performance of a campaign.
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How to calculate the conversion ratio?
Once you have defined in depth what the conversion will be, we can start making numbers. The conversion ratio is calculated by dividing the conversions by the total click volume.
Conversion Rate = Conversions / Clicks
For example, if an online campaign has generated 1000 clicks and 58 sales that campaign will have a conversion rate of 5.8%. Broadly speaking, if a website has, say, 900,000 monthly visits and an average 8500 conversions, the conversion rate of the site will be 0.94%. That is, of every 100 users of the site, 1 will end up performing a conversion.
CR = 8,500 / 900,000 = 0.0094444 = 0.94%
The importance of the conversion ratio is that, by optimising the site or campaigns to improve this metric, it will be possible to generate more sales or leads with the same volume of traffic and investing the same amount of money. If the conversion ratio is increased by 25%, in the same scenario, the cost per acquisition would be reduced by 25%.
The importance of the CRO
The optimisation of the conversion ratio will be the way forward for advertisers who need to increase their sales volume without increasing advertising investment, it is also always a KPI to be targeted and in which we should never stop working. The better the CRO, the more sales volume we will attract to our customers and the more we make the business profitable, which, interestingly, can mean an increase in advertising investment by becoming a profitable return channel.
Although how everything is not as simple as it seems. Sometimes the success of a campaign can always be coerced by the market of the sector, if we push well below the market average in our campaigns it is possible that CRO is better if the segmentation is adequate but that the volume of acquisition is see limited … there is the magic of the good optimiser! Always ensure that this indispensable KPI is aligned with the rest of the client’s markers to achieve their overall objectives.
How to optimise the conversion ratio
The conversion ratio optimisation is the set of practices aimed at improving the percentage of users who perform a conversion on the website.
Optimising conversion ratio is a cross-cutting task that must be addressed by focusing on different areas:
- Site and web traffic analysis
The first step to improve the overall conversion rate of a site will be to evaluate the conversion funnel and identify the points at which users are falling. For this, it is essential to have a web analytics tool and have conversion tracking and web page events implemented.
At this point, aspects such as the conversion funnel, the loading time of the site, the performance of the site content, traffic sources or analysis of geographic or demographic data should be analysed.
- A / B test
The A / B tests allow a comparative analysis of two different landing pages, with their corresponding layouts, to analyse which one has the best performance.
Through the A / B tests you can test from colours, CTA’s or Calls to Action, to copies, images or font types and sizes. The different versions of the landing page will be displayed randomly, each one at 50% of the visits, to statistically determine which version of page has the best performance.
- Analysis of recruitment campaigns
Other key elements to improve the overall CRO of a site are: the evaluation of the performance of the recruitment campaigns and the optimisation of these with the aim of improving the conversion ratio.
At the catchment level it will be necessary to attend to different aspects to improve performance:
- Campaign segmentation analysis: analyse the segmentation used in each of them and prioritise visibility in locations, audiences, devices and schedules in which the performance is better, will allow to focus and move the investment to the segments that best do they work.
- Ad test: Ads are another important element when it comes to improving the conversion ratio. It is convenient to test different ads, with various claims, copies or CTA’s, to see what type of ads can improve the conversion ratio.
- Landing pages test: testing the performance of the LPs in the different campaigns will be another key element to improve the conversion ratio. Testing different types of LPs or checking if the conversion rate of a campaign improves by sending the user to a product category page or to an individual product page will be key when it comes to increasing the number of sales without increasing Campaign investment.
With these simple tips you should see a real increase in conversions. Do not forget to document what you did, since that information is vital when making decisions.
Here at MLK Marketing we will define the most suitable strategy to ensure your goals are achieved and conversion rates skyrocket by driving more traffic to your website, traffic that is truly interested in the products and services you offer.