What is conversion and how to calculate it correctly

Every website owner is faced with the issue of analytics of their resource. Yes, such indicators as conversion, you can to count independently, if you study this issue in detail, but still, in the future, to save time and money, it is worth contacting specialists with experience.

In the article, we will analyze the main concepts regarding conversions site and why a businessman should have at least a general understanding of how it is to count.

What is conversion and whether the business owner needs it

Conversion is the ratio of the number of unique users to targeted actions they perform on the resource. These can be any actions: registration, leaving contacts for feedback, going to the necessary pages inside the resource, placing an application or order, subscribing to the newsletter, and others.

Conversion necessarily brings the owner site benefit, so you need to constantly monitor and adjust the web resource to see the best results of its work.

There are also such alternative names of the level on the Web conversions: CR, conversion rate, close rate. Sometimes equated and CTR, but this is a slightly different concept – an assessment of the effectiveness of advertising, not just sales. CTR indicator is usually important to keep track of when analyzing PPC campaigns.

Conversion in advertising

The ultimate goal of any PR company is to encourage a potential client to buy goods or order services. Indicator CR in advertising is expressed as a percentage and has the formula, according to which it is easy to count.

Average normal value conversions are 3-5%. Some believe that it is necessary to haveconversion10-25%, but these are overstated Indexes, because first of all it is necessary to take into account the specifics of the business, for example, the cost of the product and the field of activity.

For real estate conversion rates will be lower, and in B2B consulting – higher. The higher the price of the product, the lower the expected price conversion.

What is conversion sales

Conversion sales is the percentage of potential customers that have become real. That is, they bought a product, used a service or registered on yours site.

If we are talking about conversion rate sales, then here is more about conversions, which take place offline. And this means – to count it is much more complicated. The formulas are the same as in the advertisement, but here it is impossible to understand which one is accurate number potential customers came to you in a day.

Let’s assume the situation. You have an offline pet store in a large shopping center. 50-150 people can enter the premises visitors per day, but you will not be able to calculate the conversion rate, that is, how many of them are really potential buyers, because someone will purposefully come and buy, and others will simply stop by to waste time or pick up something for the future, compare prices. And a part will simply go shopping, pay attention to the sign and offers that are visible from the outside, and decide to come in another time and buy the desired product. So, conversion such sales to count maybe only very roughly.

Conversion site and its calculation

And here is the calculation indicator conversions becomes much easier because you can track number of visitors, their behavior on the site and whether they do target action. To get interest conversions we calculate the ratio of the quantity visitors, who made the right one for you action to the total number of user’s site.

Unfortunately, there are unscrupulous “SEO specialists” who deliberately increase traffic on site for good numbers in client reports. As a result, it not only does not give the desired result in the form of growth indicator conversions and sales, and can also affect ranking site. This means that the search engine will move your resource lower in the output when it realizes that the so-called “customers” just come in and leave almost immediately. Google considers such behavioral factor very negative, so bring it up site after such a promotion, it can be very difficult.

Pay attention! If you see that number of visitors is growing, but sales are not increasing, it is worth immediately looking at what stage in the work site something went wrong.

For correct calculation site CR indicator, it is necessary to take into account:

• not the number of sales, but the customers who committed action – on conversion it will not be affected if one person made several orders;
• number of visitors more important than number visits to the resource – frequent cases when a person enters and exits several times before purchasing something;
• the results conversions at least after a month of work, and not in one day – something changes every day and the calculations, most likely, will not correspond to reality;
• all stages of sales to track at which stage there is a problem and what triggered it.

Importantly! To get a real result from the increase conversion rate work with proven, experienced specialists. This is the only way to get the desired increase in sales, and not just spend money and time and get regression or even fall under Google’s filters.

The main types conversions

There are two basic types conversions:

1. Micro conversions. All are considered targeted actions of the visitor, but without taking into account the main, i.e., purchase, profit by the owner of the resource. These may include:

• newsletter subscription;
• views of the company’s contact page;
• registration on the resource;
• authorization on site through social networks;
• click on a pop-up banner, window, etc.

2. Macro conversions. Its indicator number of visitors, who did target action – bought something on the website. Action is considered complete after the customer has received and fully paid for the product.

Also, indicator macro conversions are possible to count for services or corporate resources. In this case, the final targeted action is receiving a lead (lead) – the user must leave his contact data for further processing of the order.

Some internet marketers only want to get macro conversions. But it should be understood – a competent specialist is able to build a working strategy that goes from small to large.

The absence of successful micro-conversions is a road to nowhere. If the potential customer makes small actions on site or at least one of them – he is already interested in the product. Only in this way there is a great chance to get a macro conversion, and even repeatedly.

In addition to the basic one’s conversion rates, there are several more species CR:

1. Straight CR – when the customer purposefully entered, selected and bought.
2. Cross-device – action tracking visitor, which he performs from various devices. For example, subscription via smartphone, and product search and purchase via laptop.
3. Associated or multi-channel CR – analysis of the last element interacted with visitor before implementation targeted action.
4. CR according to the testimony – Indicator general quantity of ad views, which is divided into highlights conversions.

As to count conversion

A universal formula that makes site conversion calculation, looks like this:

For example, let’s take a popular online store for children’s clothing with an average price level. 3,035 were recorded for the day visitors, from which 204 people bought things. To get site conversion for this day, we substitute the data in the formula CR = (number of targeted actions ÷ number of visitors) × 100% and we get:

204 ÷ 3035 × 100 = 6%

As already mentioned above, the average is normal conversion 3-5%, but taking into account the specifics of this store, indicator % conversions went even higher. And with any other initial data, it could be from 1 and even up to 10%. This would also be the norm. According to various sources, today in Ukraine the average conversion in online stores, it is 1-5%, and it depends on the features of the product and the quality of the marketer’s work.

Basic conversion formulas

In addition to the main formula that we have considered, there are additional ones that help to count other types conversions.

1. Conversion site or Interest Level visitors

The whole number of conversions ÷ number of sessions × 100%

2. Conversion of sales or Interest rate of new users

The whole number of conversions ÷ number unique visitors × 100%

3. Coefficient conversions or Leads’ level of interest in buying

The whole number of conversions ÷ number leads × 100%

4. Price conversions

The sum of all price’s conversions for a certain period ÷ number these conversions

For clarity, let’s take an example where the online store had 5 conversions, the cost of which is 450 UAH, 360 UAH, 630 UAH, 210 UAH and 500 UAH. Substitute in the formula and we get:

(450 + 360 + 630 + 210 + 500) ÷ 5 = 430

So, the average cost conversions for this store 430 hryvnias.

Yes, this is the most primitive example and, as a rule, the volume of numerical data is much larger. So that calculate the conversion for different periods, it is not necessary to do it manually – there are convenient services, which we will talk about below.

Norm conversions for different types of sales

Few of the business owners understand the issue of the norm CR for own business. The more that affects indicator conversions many factors. A lot of Internet marketers with little work experience can also get confused, so it’s worth it contact professionals in his business.

Even Google isn’t always sure about the norm conversions, but according to the latest data, it gives numbers of 1-5%. However, this is very generalized and it is worth looking at the niche with which we work.

Average conversion rates on the market are:

• eCommerce (online stores) – 1-5%;
• business consulting and other b2b services – 5-20%;
• ice generation – 10-30%;
• subscription services – 5-15%.

Keep in mind that these Indexes – average, and it is not possible to clearly navigate by them. The CR threshold can be both lower and higher than specified. They are suitable for reference, but it is best to compare your own conversion rates for the past and previous period. In this way, you can draw conclusions about where and what should be improved on your web resource

Site conversion rates: what should be paid special attention to

There are a lot of factors, but we will highlight the most significant ones that are worth paying attention to when very low conversion rate.

1. Advertisements.

Advertising campaign must be configured correctly, because even trivial mistakes can lead to the absence of a result. For example, contextual or targeted advertising will not work to its full potential if it is first of all incorrectly defined targeted audience or unspecified UTP (Unique Selling Proposition). If CR do not bring a satisfactory result, it is worth revising the strategy from the very beginning.

2. Position site in issue.

The higher site ranks in the search engine – the more potential customers will see it. That is why organic traffic in Google is a very important source conversion. It is best if your resource will be displayed on the first page of the search results, and the most profitable is to be in the TOP-3. For this, you need to use SEO promotion, which works in the long run, unlike contextual advertising.

3. Design site and content.

To get a constant increase in interested audience and convert them into customers, your resource should be:

• visually attractive;
• easy to use and intuitive;
• adapted for smartphones and tablets.

If this does not happen, visitor will simply go to competitors, where it is clear how and where to find the desired product or service and how to order it.

The content rules are as follows:

• lyrics – Interesting, readable and those that fully reveal the issues target audience, but simply contain dozens of keywords;
• photos, pictures and videos are unique and of good quality and not copied from others sites regardless of their expediency and appearance.

4. Download speed site

Statistics show – If yours site loading more than 3 seconds is a big risk. The potential client will not wait and will simply close the tab.

5. Technical serviceability site

404 pages, broken links, photos that do not load, lack of responsive design for any device, design errors and any other technical issues negatively affect the behavioral factor visitor. So, from time to time it is necessary to do a technical audit.

How to increase conversion rate

For promotion indicator equal conversions and budget savings for promotion, it is necessary to constantly analyze the results of its work.

Here are some tips on how to do it:

1. Know your target the audience These should not be general characteristics, such as “men aged 18-60 who work in large cities”, but a more detailed analysis. Age, position, interests, pains, dreams, etc. are taken into account. Having a complete picture of a potential client, it is much easier to find “warm” clients and get more conversions and sell faster.
2. Optimize site, so that it is clear and convenient for any user. Also, make the path to checkout as short as possible so the customer doesn’t have to go through many steps to make a purchase.
3. Make the goal more than just getting bigger quantity traffic, and its quality. This can be achieved with the help of experienced specialists in setting up contextual and targeted advertising, SEO specialists.
4. Monitor the quality of the content. Photos, videos, infographics, texts should be current, useful and relevant.
5. Add on site Call-to-Action (CTA) buttons that will encourage purchase or others targeted actions. These can be: “Buy a course”, “Buy now”, “Free consultation”, “Subscribe to the newsletter”.
6. Build trust in site by posting customer reviews, as well as expert recommendations, if possible. Add cases, logos of well-known companies with which you have cooperated.
7. From time to time, make special offers in the form of temporary discounts. This will attract additional attention and bring in more new customers.
8. Keep an eye on your download speed site and if you see a problem, solve it quickly. For example, the work of the resource is slowed down by dirty code, too large images. At low speed, the number of failures increases and decreases conversion.
9. Regular A/B testing elements on pages and calculation results for the selected period is mandatory. When identifying gaps and eliminating them, do additional analytics for confidence in the result.

Tools and services for conversion calculation

Considering the number of formulas, which need to be analyzed regularly CR on the site, you should pay attention to services that help automate this process.

1. The first and most popular among professionals is the Google Analytics service.

In your personal account, you can quickly get all the necessary statistics for selected periods conversions, its changes depending on various factors and conduct A/B tests. It is also used for integration with other Google products.

In order to correctly use this tool, you need:

• register on the platform;
• set a counter (namely, its code) on each page of yours site.

Because we are interested Indexes CR, then Google Analytics will track exactly them on yours site Default. You can change this in the settings indicator on anything else, for example, clicks on a phone number.

2. The next most popular is Google Ads.

This contextual advertising platform tracks the level conversions on targeted ads that are displayed visitors, who are looking for a specific service or product. The functionality also includes creating goals for different actions, for example, placing an order.

3. Other useful powerful platforms for business analytics: ClickMeter, Piwik PRO, OWOX BI, Matomo.

Allows you to track events, goals, actions of visitors on site, heatmaps and sessions, run A/B tests and create multi-channel reports.

4. Separately, let’s note Plerdy.

This resource not only helps count conversions, but also gives recommendations on how to increase them. This greatly facilitates the work of a specialist.

5. The omniac platform eSputnik closes our list of interesting supporting platforms.

With its help, in addition to standard analytics, customer data collection and conversion calculation you can create unified customer profiles, automate mailings, get detailed reports and much more.

Conducting regular analysis CR site with the help of specialized services, you will see the effectiveness of the advertising strategy. As a result, you will be able to adjust it so that each new period brings more sales to your business, with the optimal level of investment in its development.

To summarize

Conversion is one of the main metrics that reflects the quality of traffic. To not calculate conversion rate is to work blindly. It is necessary to know it in order to understand how and when to improve business processes. With its help, you can determine if the changes on the site are effective. In our article, we just told you what types of conversion rates there are and how to calculate them correctly.

Olha Tyshchenko

Editor

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