Online businesses, especially e-commerce stores, often rely on acquiring customers by driving traffic to their websites. But getting numerous visitors and generating leads alone are clearly not enough. You need to be able to convert them into paying customers. After all, making a sale is the ultimate goal of every marketing strategy.
However, when we talk about conversion, it does not always mean buying your offered product or service. The term refers to the completion of your set goals. For example, you want the visitor to click on your Google ad and go to a landing page where they can download a handy guide. Doing this desired action is considered a conversion.
Here are other ways a conversion can happen:
- When a visitor signs up to your email newsletter
- When an online user installs your app after seeing your ad
- When a visitor purchases something from your online store
- When someone registers for your event
- When someone subscribes to your service
Conversions can also happen in simpler actions such as downloading an e-book or adding an item to cart.
You can optimize your ads and other marketing efforts to reach a certain goal. You will want your target audience to take action, and the action should be measurable. Of course, not all the people who saw your ads and clicked on the link can be automatically converted. Sometimes, they can leave your site or page without taking your desired action.
This leads us to the subject of conversion rate.
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What is Conversion Rate?
We cannot talk about conversion rate optimization without touching on conversion rate. The term refers to the percentage of visitors or target users who completed an action out of all the visitors your site acquired. A conversion rate can be determined by dividing the number of visitors completing a goal by the total number of visitors.
On the other hand, Google ads conversion rate can be calculated by dividing the number of people who took an action by the total impressions your ads generated. A conversion rate is one of the most important metrics in your marketing efforts. With a high conversion rate, you can rest assured that your ads are doing well. It means your efforts bore fruit, and people pay attention to your offer.
In e-commerce, the average conversion rate is between 2% to 3%. It is good to note that online store conversion rates are defined differently. It is about how many people actually see your products as opposed to those who actually buy them.
Conversion rates can be influenced by various factors, including the following:
The industry you are in
Conversion rates can differ from industry to industry. Inside the e-commerce industry, some micro-industries do so much better. For example, arts and crafts has the highest conversion rate, and baby and child has the lowest.
The type of products on offer
The products on offer can affect your conversion rate. It has a huge effect on the realization of your goals. For example, food and drinks convert more buying customers than e-commerce products.
The country where you do business
Your conversion rate can depend on which country you sell your products. Some countries like Germany are more open to online buying. Others are more skeptical. You need to factor in the location of your buyers when you are trying to gauge the success or failure of your marketing campaigns.
The source of traffic
One of the most important variable when looking into your overall conversion rate is the traffic source. Google Ads and other top-of-the-funnel channels do not easily convert customers because they are not considered warm traffic sources. You often need to gain them as leads and take extra steps to nurture them and convert them into paying customers.
On the other hand, email traffic can achieve much higher conversion rates because customers have already demonstrated their interest in your brand and products by signing up to your email list. They are more accommodating when you try to sell them something because they already know who you are.
The device your visitors use
The type of device your visitors use can also influence the conversion rate. Many sites are not mobile-optimized, so some find it easier to use desktops when surfing through e-commerce sites. But since more and more online users are using their smartphones, it will only be a matter of time before the latter takes over and dominate all the other devices.
Understanding Conversion Rate Optimization
Now that we have a better grasp of conversion and conversion rates, it’s time to delve deeper into conversion rate optimization. This term refers to the process of devising ways to increase conversion rates. In short, you want to see more results, so you are going to optimize your ads or other marketing efforts to give you the best chance of persuading your target audience to complete your set goals.
To understand this concept better, you need to look at the following important considerations:
- Conversion rate optimization is not simply based on hunches or the latest trends. Just because everyone else is employing the same strategy does not mean you will get the same results if you follow them. It is better to think of conversion rate optimization as a structured and systematic approach to improving your marketing efforts.
- In conversion rate optimization, you base your decisions on insights you gained from your analytics and user feedback.
- Conversion rate optimization is not all about acquiring as many users as possible. No matter how huge your website traffic is, your efforts will be futile if they are not taking the actions you want them to accomplish on your site.
- Conversion rate optimization is defined by your business’s unique objectives and needs.
Why do you need conversion rate optimization?
It can enhance your customer insights
When you harness the power of conversion rate optimization, you are allowed to gauge your potential customers’ preferences and behaviors. Their actions on your website, or lack thereof, can give you a deeper insight into their psyche. Are there sections they are interested in? What pages did they click on? Did they gain a positive website experience, enough to convince them to convert?
The more you try to improve your conversion rate, the more you will understand your prospects. These insights can help you make informed decisions, whether it’s creating better customer personas or tweaking your marketing strategy to reach high-quality leads.
CRO can help lower your acquisition cost
Acquiring customers is not only hard. It is also quite expensive. You must pour in a lot of time, money, and effort to acquire a lead. For example, you spend $100 to drive 50 visitors to your website, and only 10 customers convert. This will give you a customer acquisition cost of $10.
With optimization efforts, you might still spend the same to get 50 visitors, but you may be able to convert at least 30 of them. Each customer will only cost you around $3. This cuts down your customer acquisition cost significantly.
Make lead-to-purchase time shorter
Your conversion rate optimization strategy can help shorten the time it takes for your potential customers to become paying customers. For example, your efforts extend to turning your website into a more intuitive platform that users can easily navigate. This can greatly help reduce the time it takes for your visitor to get into your shop, add to their carts, and proceed to checkout.
You must make all elements of your website work together toward a common goal. If you want them to buy from your shop, you need to give your visitors the nudge toward the right decision. It can be in the form of recommended products under a related product they are viewing or a prompt to add the product they viewed to their cart in one easy click.
Now, to the most important question: what can you optimize? Here are some of them:
- Add website pop-ups
- Make forms simpler by removing unnecessary fields
- Remove distractions on your e-commerce site
- Make the steps to checkout easy
- Create effective calls to action
- Consider placing a countdown timer to communicate urgency
- A/B test your website elements, whether it’s the headline or product description
Wrapping it up
Employing conversion rate optimization tactics can help you reduce friction and optimize your conversion funnel. This makes it easier for you to acquire customers at less time and cost. Keep in mind, however, that success does not happen overnight. Conversion rate optimization strategies need constant effort and consistency.
If you want to grow and transform your business, you need to be patient and determined enough to reinforce your efforts, evaluate the results, and tweak your tactics to achieve the best results.