In today’s highly competitive market, success isn’t only about driving more traffic to your website. Converting that traffic into action, whether it’s a sale or an email newsletter sign-up, is just as important as getting eyes on your content. The metric for tracking all of this? Conversion rate.
Every click counts, no matter the size of your business. But, what happens when you see an increase in other key performance indicators but not your sales? That’s when it becomes critical to assess how many people are completing the actions that you want them to take when they see your brand online. Understanding conversion rate, and how to optimize it, is essential for ongoing growth.
What Is Conversion Rate?
Conversion rate is the percentage of users who take a desired action on your website or on an ad that you might be running. This could be a purchase, but it could also be a newsletter sign-up, a digital download, filling out a contact form, or even watching a demo video. What’s considered a conversion will depend on your business goals, but it could look like an e-commerce store customer making a purchase, or a service provider receiving a booking for a consultation.
Ultimately, your conversion rate reflects how effective your website or ad campaign has been at turning interest into action.
Why Conversion Rate Matters
Conversion rate is more than just another metric to track, it’s a window into how well your marketing is performing. A high conversion rate means that your messaging resonates with your target audience, that the user experience on your site is good, and that you have a compelling offer.
On the other hand, a low conversion rate could indicate issues in your marketing funnel in moving users from the top to the bottom, that your ads aren’t targeting the right people, or that your creative isn’t that compelling.
Understanding and improving your conversion rate can generate an immediate increase in revenue if you do it correctly, particularly if you’re already driving high levels of traffic to your site or landing pages.
Conversion Rate Calculation
Calculating your conversion rate is fairly straightforward:
Conversion Rate = (Number of Conversions ÷ Total Visitors) x 100
For instance, if your website had 2,000 visitors last month and 100 of them made a purchase, your conversion rate would be 5%.
What Is a Good Conversion Rate?
There’s no one-size-fits-all benchmark for conversion rates — they can even vary within each industry sub-category. But, for some averages, these key industry standards can help you gauge where you are right now:
Gaming
Average conversion rates in the gaming industry are around 1.5-3%, with mobile apps converting at a slightly higher rate due to low-barrier-to-entry downloads.
Health
Health and wellness sites, particularly those selling fitness-related plans or supplements, average around 3-5% year round, with seasonal spikes at New Year and in the month leading into summer.
Automotive
Conversion rates for the auto industry are lower, around 4-6%, due to longer sales cycles and high-value sales. However, lead form conversions or test drive bookings are often slightly higher.
Tech
Tech products average around 2-5% conversion rates, but these can vary significantly depending on what type of tech you sell and what you’re tracking as a conversion. Demo sign-up conversions are often higher, and for top-performing campaigns can be around 10%.
Travel
Travel websites often convert around 2-4%, with mobile users typically converting at a lower rate than desktop users due to the complexity of travel arrangements and booking flows.
Finance
Insurance, loans, and banking sites typically see 4-7% conversion rates. This is particularly the case when contact forms are short and offers are personalized for the user.
Factors Affecting Conversion Rate
Website Speed and Mobile Experience
Slow-loading websites are one of the top reasons that users abandon a page before converting. Even a one-second delay in page load time can lead to significant drops in conversions. On mobile devices, where users are often browsing quickly and on smaller screens, this can be even more of an issue.
Optimizing for speed means compressing your images before you upload them, reducing scripts loading on the site backend, and using mobile-responsive design templates. Many tools for building landing pages that are tailored for this type of high-level performance can eliminate this technical guesswork for smaller teams.
Targeting Match
You can’t convert users who were never interested in your content to begin with. That’s why audience targeting is vital to get right. Switching to intent-based targeting, over identity-based, is one of the best moves you can make to increase your conversion rate. This means that your ads are more likely to reach users who are already in a decision-making phase of the marketing funnel.
Creative Fatigue
Even the best ad creative has a shelf life. When potential customers see the same creative over and over again, the performance naturally declines due to overexposure. Not only does this reduce your click-through rate and conversions, but it weakens the perception of your brand. Refreshing visuals and headline copy regularly means that you can offer something new to your audience.
Lack of Clarity
If a user can’t tell within a few seconds what your offer is and why it should matter to them, they’re more likely to leave. Ambiguity in product descriptions, unclear pricing, or vague calls to action (CTA) can all reduce the likelihood of a conversion being made.
Checkout or Sign-up Issues
There’s nothing more frustrating than trying to check out or sign up for something and it doesn’t work. Long forms, surprise fees, or required account creation are all some of the biggest reasons that users abandon carts or leave a sign-up halfway through.
How to Improve Conversion Rate
Run A/B Tests
A/B testing allows you to compare different variations of elements in your ads or landing pages like heading, images, button placement, or product descriptions to see what resonates more with your target audience. For instance, changing the CTA from “Buy Now” to “Get Yours Today” might boost urgency and increase clicks.
Build Better Landing Pages
Your landing pages should be laser-focused on the specific goal you want a user to complete when they get to that page. Instead of sending traffic to your homepage, create campaign-specific pages that speak directly to your target audience and their intent. These pages should be as distraction-free as possible, load quickly, and they should also be visually aligned with the creative of the ad that brought the user to that landing page.
There are now numerous tools that can help you build landing pages quickly, from drag-and-drop options to AI-assisted page generators.
Leverage High-Visibility Ad Formats
High-visibility ad formats like full-screen vertical videos, interactive carousels, and rich displays often stop users from scrolling and draw attention to your offer. The most important thing here is to match your messaging with the creative and the format you’re using. For instance, motion to highlight product features in a video ad, or a carousel to create a narrative around your offer.
Use Trust Signals
People often trust other people more than brands, so including product reviews, testimonials, case studies, and user-generated content in your landing pages can significantly improve your credibility. Visual trust indicators like SSL certificates, secure payment icons, and media mentions also help reassure potential customers who have never worked with you.
Retarget Strategically
Retargeting campaigns can be highly effective and re-engage users who showed interest but didn’t convert the first time. To be effective, though, these ads must go beyond a generic reminder and offer something that the first round of ads didn’t. Use dynamic retargeting to show ads for the product that the specific user has in their abandoned cart or was considering. Offer a discount or an added benefit to entice them back and make the conversion.
Tools Used to Optimize Conversion Rate
Landing Page Builders
Tools that let you build and deploy custom landing pages, especially those that require no coding, allow small teams to test landing pages more quickly and generate new pages faster.
Predictive Targeting Platforms
Solutions that go beyond traditional interest targeting, instead targeting by intent, help get your message in front of users who are already in the decision phase of their sales journey.
Creative Optimization Tools
Platforms that are built with A/B testing capabilities usually offer options for you to rotate assets before creative fatigue sets in for your audience. Repurposing social content into new formats is one of the best ways to get more from assets you already have.
All-in-One Assistants
AI tools can help manage campaigns from creation to optimization, making it easier for your team to handle tasks that would typically require multiple platforms or specialists.
Key Takeaways
Understanding and optimizing for improved conversion rates is essential for any business. While traffic is still important, what you do with that traffic is ultimately what determines your profitability. By understanding what impacts your conversion rate and where you can make improvements, you can optimize existing and future campaigns to give you measurable impact within weeks.
Frequently Asked Questions (FAQs)
How do you calculate conversion rate for e-commerce?
You divide the number of purchases made by the total number of visitors, then multiply by 100 to give you an overall percentage for your conversion rate.
What are some common reasons for low conversion rates?
Low conversions often happen as a result of poor targeting, slow website load times or performance, unclear calls to action, or issues around the checkout or sign-up.
How can A/B testing help improve conversion rates?
A/B testing allows you to quickly identify which version of a page, or which on-page elements, are performing better. From there, you can make data-informed decisions that help you increase conversions.
What are the best practices for optimizing landing pages?
Using clear headlines, fast-loading designs, and strong calls to action are the best options for your landing pages. Matching the content to your ad also helps provide consistency.
How does mobile optimization affect conversion rates?
A mobile-friendly design is critical, as a poor mobile experience can lead to higher bounce rates on your site and landing pages, and lower conversions overall.
