The Importance of Conversion Rates

Of all the things to worry about on a website, the one at the very top of anyone’s list should be their conversion rate (CR). The conversion rate can be defined as the percentage of website visi tors that do what you want them to do. How many are buying your product, how many are giving you a leads, etc.  The CR determines how successful your website is, at least in regards to how well it contributes to your bottom line.  I usually calculate mine using like this: (Number of Sales) ÷ (Number of Unique Visitors) = Conversion Rate

And sure, some websites are meant just to be pretty, not necessarily to actually contribute to a company’s bottom line, but that is an exception to the rule. So here are my no-nonsense reasons why you should be aware of your conversion rate:

  1. The CR is the most efficient statistic to try to improve upon. If you look at the costs involved of your different options, increasing your CR is the easiest and least expensive thing you can do. It might mean something as simple as revising your web lead form by removing some of the fields on it (fewer fields on a form automatically increase the completion rate), or revising your web content. There is lots of help on the web to give you pointers – or of course, you can also hire a professional to do it (smile).
  2. The CR is the least expensive alternative.  Your problem is how to make your website more profitable, and this basically means doing one of two things: increasing the web traffic to your website, or increasing the conversion rates of the traffic you are already getting. The two things are not exclusive of each other – you should actually try to do both – I’m just saying that the efforts toward your CR give more bang for the buck. 
    1. For a real-world example consider this: you can take $1,000 dollars and try to get more web traffic like with increasing your Pay Per Click traffic in Google Adwords.  Say it doubles your traffic for the one month, and doubles your sales as well.  Great – a 100% improvement over last month!  But next month your traffic falls back to where it was and you are in the same boat you were before.
    2. Or you can take that $1,000 dollars and increase your CR. Say it increases your sales by 25% for the month (getting a %100 improvement is not unheard of).  25% is not as great a result for the month as the spend with Google, but it is actually much better if you look at the results at the end of the year. For the year you get a 23% improvement – while for increasing your PPC for one month only means an 8% increase for the year.
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