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What is the conversion rate?How to get high conversion in e-commerce?

Conversion rate is one of the most important parameters to track – not only in e-commerce, but also in digital marketing, or – even more broadly – ​​in business. The more conversions, the better, which is why one of the most important challenges related to running a business on the Internet is constant optimization of the conversion rate. Learn how to take care of it!
Read our guide to find out:

What is a conversion?


A conversion happens the moment a website visitor performs a desired action. And while conversion is most often talked about in the context of sales, it is not the only option. It’s up to the online business person to decide what will be a conversion for them at any given time. While the possibilities are almost endless in this regard, there are a few of the most popular examples of conversions that will give you the context you need.

Examples of conversions on the website

Buying a product or service – the moment when a customer finalizes a transaction for many stores is the most significant conversion. However, other opportunities should not be overlooked.

Adding a product to the shopping cart – it’s not always a simple purchase decision, and just knowing that a visitor has added a product to the cart is important. Such an action means that the person is interested in the product and is strongly considering buying it – so it is worth tracking this type of conversion.

Create an account – before a customer even completes a transaction, stores often require an account to be created. While not every new account is a guarantee of a sale, it’s an important conversion that opens up new opportunities for your company to promote products to that particular customer.

Ad click-through – if you display product ads online – for example, on social media – you can look at how many people interact with the banner. Implicit in this conversion is an important message about whether the ad is catching the eye and generating interest among Internet users.

Newsletter sign-ups – in the process of acquiring leads, it’s a good idea to create a newsletter that allows your company to inform potential customers about upcoming promotions. You can treat each newsletter signup as a conversion.

Event registration – if your company holds events, it’s a good idea to verify how much interest they generate. By tracking conversions from various sources, you will find out where people who are interested in an event come from most often.

Contact by form – in the process of selling some services, and sometimes more complicated or more expensive products, the best thing that can happen is direct contact from a potential customer, which will give your salespeople a chance to convince them to buy.

Phone contact – if you place a widget on your website for phone contact, be sure to monitor the number of calls from this source. After time, you can start experimenting with the placement of the widget to achieve an optimal conversion rate.

Sharing content – sometimes it’s not about sales, but about getting the word out about a contest, a promotion or a new product line carried around the world. In this case, it’s worth tracking the conversion of sharing – for example, a post announcing the start of a promotion. This way you can estimate the interest in the offer.

What is a conversion rate?


This parameter tells you how many of the visitors to a website or display ad decided to perform the desired action. We express it as a percentage, so if out of 1,000 visitors to your site, 20 people create an account, we will have a conversion rate of 2%.

Company A sells personalized greeting cards. The total conversion rate is about 4%, but this does not allow the company to achieve the required income to continue operating in its current form. According to the company’s current strategy, it will be necessary to optimize the conversion so that it reaches no less than 6% per year.

Company B acts as an intermediary in the sale of an information system, the cost of which fluctuates between several and several million zlotys. From each sale, Company B earns a large commission. In this situation, achieving a conversion (in the sense of a closed sale) of 1% is sufficient to run the business profitably, and achieving a 3% conversion would be a management dream come true.

Why is the conversion rate so important?


Monitoring conversions on an ongoing basis is one of the most reliable ways to measure the effectiveness of your websites, online ads, landing pages or forms. It is through a simple parameter – the percentage of people who responded to your message as expected – that you know whether each of these elements is doing its job. Success in e-business is the product of dozens or even hundreds of micro-conversions – that is, all those elements that lead to the final conversion, which is usually a sale.

The conversion rate is also crucial in planning an advertising budget. Knowing what the conversion rate is and knowing the costs incurred for advertising, you can draw a CPC (cost-per-click, or cost per click). If you successively implement measures to increase the conversion rate, you will thus lower the CPC, and you can invest the saved money in further business development.

In short: a higher conversion rate means lower costs, better user experience and more effective marketing efforts.

How to calculate the conversion rate?


There are many ways to measure conversions – but they all boil down to using a simple formula:

Conversion rate = (Number of visitors / number of conversions) * 100%.

A lot depends on what tools you use to create forms, landing pages or run an online store. Much of this type of software has built-in functionality that allows you to track conversion rates and even gives you access to historical data.

What elements affect the conversion rate in e-commerce?


In order to be able to estimate what kind of conversion rate we should expect, and to assess whether the current number of conversions is sufficient, it is worth paying attention to what influences conversions.

First: the type of conversion. Different assumptions and expectations should be made for each type of conversion. The conversion rate for downloading a free e-book will certainly be quite different from converting visitors to paying customers.

Second: the industry and type of product or service. As we described in the example above, the same conversion rate may be sufficient for one industry, but be far too low for another.

Third: the conversion path. The shorter, the more effective.

Fourth: content on banner ads, landing pages, etc. Short, specific messages and clarity of message are two elements to focus on when creating advertising content to induce conversions.

Fifth: Call-to-action, or call to action. This is usually a button whose form is of considerable importance. The shape, color, placement and content on the button all have a real impact on the conversion rate.

Sixth: responsiveness of the site on mobile devices. At a time when many Internet users primarily use smartphones (less often: tablets), designing your store page and product pages for display on devices with smaller screens is an absolute must.

Seventh: the marketing activities you undertake. You can implement different types of marketing activities, including email, SMS or content marketing. You can use pop-ups on your website, banner ads on search networks, or run a chatbot to help customers search for a product they are interested in. All these marketing activities can have an impact on the conversion rate. To get the best result, try different solutions and monitor the effects. Don’t put everything on one card – diversify your activities so that if one fails, another can work for your business.

All of the above points relate, more or less, to UX (user experience). Even elements that are easy to overlook, such as the loading time of a website, simple navigation or a small amount of content to digest, affect users (including the rejection rate).

The above will also include the clarity of the site or the additional elements that appear on it. Users often complain about the multitude of additional messages they can’t ignore to move on. While we can’t abandon certain elements – such as the cookie notification – it’s worth considering whether adding a promotion banner to the homepage of an online store, a pop-up informing about new products, and a widget with a contact form and livechat are actually necessary actions.

Conversion rate optimization – how to increase the average conversion rate?


So what can you do to increase your website’s conversion rate? The answer is simple – implement optimization measures. What is CRO (conversion rate optimization)? While there is no one-size-fits-all way to optimize, here are some good practices to follow.

Step one: try to diagnose the problem

Ask yourself some questions. Why don’t visitors convert? Which element is the biggest obstacle to conversion? What can be changed to improve the conversion rate?

In order to properly formulate a hypothesis, it’s worth tracing the entire process – analyzing the banner ad, the construction, design and content on the landing page, and finally the offer (product sheet) itself.

At this stage, you can use additional tracking tools – for example, heat maps, conversion data for your industry, etc.

Mr. Rafal runs an online computer store and is currently holding a promotion to sell off older laptop models. It has launched a social media promotion, but users who click on the promotion are taken to the store’s homepage, where they have to search for the covered products themselves.

Although the conversion on the ad itself was satisfactory (the banner was prepared well and the advertising slogan was encouraging), sales did not increase. So Mr. Raphael needs to analyze the conversion path and see what retains customers.

Step two: select the item to change

You need to decide where you want to start making changes. Note that we are talking about a single element – only by changing one thing at a time, you will be able to determine whether the change affected conversions positively, negatively, or had no effect at all.
At this point, consider using A/B tests, or comparison tests. They will allow you to accurately measure the effectiveness of the changes you have made, and above all, compare two or more variants under similar conditions, displaying them to an equal number of users at the same time.

Mr. Raphael noticed that many users, after going to the home page of an online store, leave it after a while. So the solution in this case may be to shorten the conversion path and lead the customer not to the homepage, but to a specific product category.

Step three: launch the planned changes

Time to implement improvements. At this point, however, keep in mind that it will take some time to see the results of your work. So give the new ad, form or landing page “work” for a while. Set a time limit – for example, for 7 days – or an entry limit – for example, 1,000. When one or the other is achieved, proceed to the next step.

Step four: check the effects of the changes made

That’s a formality – since the conversion rate is expressed as a percentage, it’s not hard to tell if the improvements made have actually improved conversions. If so, you can congratulate yourself (but absolutely not rest on your laurels). If not, it’s time to restore the previous state and try a different approach.

Mr. Rafal optimized the advertising. Banner remained the same because it recorded good results. This time, however, instead of taking visitors to the main page, the new version of the ad takes them to a subpage prepared specifically for this promotion when they click. The new subpage only includes the computers included in the promotion, making it significantly easier to choose and having a positive impact on the conversion rate, which increased from 1.4% to 2.6% in just one week.

Step five: optimize further

The hallmark of conversion optimization is that the process doesn’t actually end. If you can improve one element, it’s worth reaching for another, and then another. Conditions are changing, and so are customer needs and tastes, so the work of improving conversions should continue.

It is not, of course, about the relentless grinding of one element. However, it’s worth revisiting running ad campaigns or forms from time to time and verifying their results. The next step is to see if anything can be improved, and the next step is to make those improvements.

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