Conversion rate is a metric widely used to measure results, especially in Digital Marketing. An example is the conversion rate of Leads, which to calculate, just divide the conversions by their audience. For example: 300 leads / 1,000 visitors * 100 = 30% Leads conversion rate.
Many companies look at the conversion rate as a metric to be used as a thermometer to understand the real communication efficiency of the site or a specific page.
Some prefer to use this information purely for setting the goals of a commercial team or an ecommerce.
Others prefer to consult this data only once a year, to understand how the performance was throughout the year and define strategic actions on top of it.
And believe me: there are some who do not even look at this data, do not understand its importance or even know how to measure it.
But is it really that important to measure that data? Where does it direct us and how can I use it to my advantage?
What's a conversion rate, anyway?
The goal of this metric can be to understand how your company's return on each investment, be it time or money, is doing in relation to sales.
But it can also be a good way to measure the results of your Digital Marketing strategy.
It can also be the simple filling out of a registration, the request for a budget or even the subscription to a newsletter.
Understanding your conversion rate is very important, as it will make clear how efficient and mature the site is, and also of paramount importance to follow the results of the business as a whole.
The conversion rate can be calculated between all stages of the sales hopper and brings a diagnosis of where the bottleneck is, the weak point of the strategy and, above all, shows where we should act.
How does the conversion rate help to measure the results?
There is always some investment in money or even time in a company to launch a campaign.
Now imagine if you get ways to understand exactly the result of this work in the most accurate way possible.
You can, for example, create a Landing Page of a promotion and drive it in some media. People will start accessing the page, showing interest in the content.
Of all the people who access, those who are actually interested in the subject will fill out a form, according to their strategy to achieve the conversion.
Okay, one more conversion for your page!
Each period, each campaign, you will be able to evaluate the amount of people who converted versus the total amount of visits. Then you just chase that number to understand how many actually progressed to closure. This way, you will have a more precise understanding of the return on your investment, be it in cash directly or time.
This is just one example of how measuring the conversion rate can help your company better target its Digital Marketing efforts.
And we know from experience that an optimal conversion rate helps keep the funnel healthy.
How to calculate the conversion rate?
In a very simple way, we can measure the actual conversion of the site. We can measure the percentage between each stage, considering the following criteria:
- Visitors for Leads;
- Leads to opportunities;
- Opportunities for customers;
See the image below that better illustrates how the funnel looks:
This is just an example, but if in your company's strategy you find it interesting to "break" the funnel in more steps or reduce it, just adapt it to your reality.
Let's take a practical example, calculating the conversion of site visitors to Leads.
The goal here is to capture the contact of the person browsing the site, to understand who is the same to work further on their nutrition.
A site with the volume of visitors at 10,000 hits in a given period had 598 forms filled out, among conversion points that are strategically arranged on some pages and pop-ups.
In that case, we calculate as follows:
- Accesses: 10,000
- Number of Conversions: 598
- Calculation: 598/10,000 = 5.98%
We have here a 5.98% conversion rate of visitors to Leads.
It is important that you know which metrics to analyze at each stage and have a full diagnosis of your site's performance and thus direct your efforts to the right point.
How do I know if my conversion rate is good?
In the example above, we show a site that has a conversion rate of 5.98% in the period analyzed. Is that number low? That's relative! It will depend on your market, because there are comparisons between segments that can give a better direction.
Anyway, it is clear that more than 90% of the accesses of this site are being lost for some reason.
This is where all the work that your Marketing team can do comes in, to understand more precisely what happens to visitors who don't convert and to understand the conversion of the whole funnel.
Overall, the conversion rate is one of the most important metrics in a company and should be a latent concern.
It is a management number and of utmost importance, which will help in the direction of the company's marketing actions - without discarding the sales team, which will have the responsibility of bringing relevant insights related to the Leads that the marketing delivers, and thus understand the quality of these Leads and constantly work on the adjustments of criteria.
Track your conversion rate
If you want to achieve a good performance in your business, identify each weakness and the opportunities that can be worked on to improve your results, be sure to keep track of your conversion rate!
Want some help getting started? Need help getting started now to evaluate the performance of your site and guidance to take the first steps? Contact us!
