What is a conversion rate?

The formula works the same whether you’re measuring the effectiveness of your whole site, one page, or just one email. 

Why conversion rate matters

Conversion rates are more than just numbers. They are vital signs of the health and effectiveness of your business. 

Why care about conversion rate?

1. Revenue Growth: Higher conversion rates directly contribute to increased sales and revenue. By converting more visitors into customers, you maximize your marketing ROI.
   
   
2. Marketing Efficiency: Tracking your conversion rate helps you gauge how efficient your marketing and sales campaigns are. Which strategies are working? Which need adjustment? Knowing this helps you ensure your marketing budget is spent wisely.
   
   
3. Customer Insights: Analyzing conversion rates provides insights into your prospects and customers. What moves them to take action? Conversion rate testing and observations can help you align your products, content, website, ads, and other marketing elements with what your customers want.
   
   
4. Competitive Advantage: Optimizing your conversion rates can set you up to outperform your competitors. You can better address customer needs, make better use of your limited time, and generate more ROI on your marketing budget — all advantages which can help you attract even more customers.
   
   

What is a good conversion rate?

Determining what constitutes a “good” conversion rate can be challenging because conversion rates may vary widely depending on many factors. Industry, marketing channels, seasonality, and price point are just a few of the variables that can impact conversion rate.

Instead of focusing solely on industry benchmarks, it’s more effective to think strategically about your own goals and metrics. Here are some recommendations for determining what your conversion rate could or should be:

• Take industry averages with a grain of salt. It’s easy to Google “average Shopify store conversion rate”, but it’s not always clear how relevant the data is to your business (and your size, industry, pricing, strategy, positioning, budget, etc.).
  
  
• A niche product with a highly-targeted audience may have a higher conversion rate than a broad-marketing offering.
  
  
• Low conversion rates could be a function of low quality traffic – not a flaw in your website or sales material.
  
  
• Look at the conversion rates for different stages of your funnel, not just the sale. Getting a comprehensive view of user behavior can be more powerful – and actionable – than an overall score.
  
  
• Evaluate your conversion rates across different marketing channels (e.g., email, social media, paid ads). This will show you which channels are most effective for your business. (SegMetrics can help with this.)
  
  
• Use your own historical data as a benchmark. This allows you to compare current performance against past performance to measure improvements or declines.
  
  
• Once you have an understanding of how all the conversion rates in your marketing funnel impact sales, you can set conversion rate targets that align with your overall business goals. For example, if your goal is to increase sales by 25%, what conversion rate increases will you need – and at which points in your funnel – to hit that 25% goal?

By taking a strategic, holistic approach to conversion rates, you can develop a more nuanced understanding of what constitutes a good conversion rate for your business. This approach encourages flexibility and continuous improvement vs. blind comparison to opaque industry benchmarks.

Conversion Rate Optimization

Conversion Rate Optimization (CRO) is the practice of increasing the percentage of website visitors who take a desired action, such as making a purchase or signing up for a newsletter. 

The core idea behind CRO is simple:

1. Understand what your visitors are doing
2. Leverage those insights to make data-driven improvements

By optimizing various elements of your marketing, you can enhance user experience, reduce friction, and boost conversion rates — which ultimately should lead to more revenue.

Here are several techniques which are useful for optimizing your conversion rate:

• Improve your conversion rate levers: Start by addressing the low-hanging fruit in your marketing funnel — those simple changes that can have a significant impact. This includes optimizing headlines, improving CTA placements, simplifying forms, and enhancing site navigation. We’ll cover these in more depth in the next section. Straightforward adjustments can yield quick wins and set the stage for more advanced optimizations.
  
  
• Customer Journey Mapping: Map out your entire customer journey. This can provide valuable insights for CRO. Identifying key touchpoints and conversion rate drop-offs helps prioritize optimization efforts.
  
  
• Personalization: Tailoring your content to individual users can significantly improve your engagement and overall conversion rates. Personalization can include dynamic content, custom recommendations, and targeted messaging for different audiences or segments.
  
  
• A/B Testing: Once you’ve tackled the techniques above, consider A/B testing. This involves comparing two versions of a piece of your marketing funnel to see which performs better. For example, you might test different headlines, images, price points or even entire pages. Effective A/B testing requires you have enough traffic to generate statistically significant results. Not every test is a clear winner, but when you find one, it can provide a clear signal of what resonates most with your audience.
  
  
• Multivariate Testing: This is testing on steroids. Unlike A/B testing, which tests one element at a time, multivariate testing looks at multiple variables simultaneously to see how they interact. This approach can uncover deeper insights but requires a significant amount of data to be effective. This only applies to complex organizations with heavy traffic volumes.

Go deeper: SegMetrics can help you improve not just conversion rates — at any step of your funnel — but also track how each touch point impacts your lifetime customer value. Learn more about SegMetrics’ full funnel optimization. 

How to improve conversion rate

The key to boosting your conversion rate is understanding and optimizing the various factors that influence user behavior, engagement and action on your site. You can think of these as “conversion rate levers.” They are the 80/20, tactical improvements most likely to raise your conversion rates.

1. Traffic Quality

Focus on driving high-quality traffic. It’s more effective to have fewer, highly-interested leads than a large number of unqualified visitors.

• Are you focusing your ads on platforms where your buyers have come from?
• Are you targeting your ads or outreach on focused, relevant audiences — or marketing too broadly?
• Is your site optimized for search engines to attract organic traffic that is searching for what you have to offer?

   

2. Page Load Speed

Fast-loading pages are essential to keep visitors from leaving your site. If you’re too slow, they’ll bounce.

• Have you measured your page load speeds?
• Do you need to compress and/or resize images to reduce load times (without sacrificing image quality)?
• Can you use browser caching and/or server-side caching to accelerate your load speeds?

   

3. Content Relevance

If the content you’re sharing isn’t clearly relevant and compelling to your audience, your conversion rate will suffer.

• Does your content address the burning pain points and strongest desires of your target audience? 
• Is your content quality high enough to attract serious leads?
• When was the last time you updated your content to keep it relevant and timely?

   

4. Ease of Navigation

An intuitive and well-structured website design helps users find what they need quickly — reducing frustration and encouraging engagement.

• Is your site navigation clear and easy-to-use?
• Is your site mobile-friendly?
• Is your page layout easy-to-follow, naturally leading the user’s eye where you want it to go?

   

5. Clear Communication

Use clear, straightforward language to ensure your value propositions are easy to understand.

• Is it immediately apparent what your content is about and why the user should care? (Improving headlines is often the single fastest way to improve conversion rate.)
• Is your page scannable and are your key talking points understandable at a glance?
• Have you removed jargon (unless it’s absolutely necessary)?

   

6. Persuasiveness

When you offer a user something – a product, service, download, article, etc. – how valuable users perceive your offer will directly impact your conversion rate. Making your page more persuasive will increase your conversions.

• Are you using the exact words and phrases that your users use to describe their problems?
• Is it clear why your product or your business is the best solution?
• Are you making an emotional appeal or a logical argument?

   

7. Visual Appeal

A visually attractive design can capture the attention of your users, while a boring or confusing design will undercut even the most compelling content.

• Does your page or site align with your visual branding?
• Do you use images, videos and graphics that enhance the clarity and impact of your content — or are they just filler?
• Should you use more or less whitespace?

   

8. Effective Calls to Action (CTAs)

Conversions depend on your visitors taking an action. If that action is not clear, compelling and easy, your conversion rate will drop.

• Are your CTAs in prominent and convenient locations where users will see them?
• Does the offer of your CTA align with the promise of the headline?
• Are your forms short, simple, and easy-to-use?

   

9. Trust Signals

Building credibility with your visitors can address their reservations and improve your conversion rates.

• Are you prominently displaying testimonials, case studies, and customer reviews?
• Have you developed and maintained a brand image and messaging that feels cohesive, trustworthy, relevant, and appealing?
• Have you addressed common concerns in advance (such as guarantees, shipping information, contact details, and return policies)?

By understanding and optimizing these conversion rate levers, you can significantly improve your conversion rates. Each element plays a crucial role in influencing how visitors interact with your site and whether or not they take the action you want.

Conclusion

Optimizing conversion rates is essential for any business. By focusing on key factors like traffic quality, page load speed, relevant content, and ease of navigation, you can enhance your online presence, drive more conversions, and grow your business. 

Remember, CRO is an ongoing process of testing and improving. Use tools like SegMetrics to align your marketing data with conversion goals and make informed decisions.

Start optimizing your conversion rates today to grow your business.