Conversion Rate

The conversion rate shows how many visitors perform a desired action (purchase, lead, registration). Conversion optimization increases this value through analysis, better usability, suitable content, faster pages, and A/B tests - measured.

Being found through SEO is one thing. However, having as many visitors as possible on a page is useless if they don't perform any actions there. That is why traffic is not the only important aspect in online marketing, but also the conversion rate. It is one of the most significant key performance indicators (KPIs). Improving it is called conversion optimization. The goal is to lead as many users as possible to a transaction.

What is the conversion rate?

In the conversion rate, the number of all page visitors is related to the number of all transactions. It is not to be confused with the click-through rate, which represents the ratio of clicks to page impressions and is the basis for the conversion rate. Thus, in a campaign without page views, no transactions can be recorded, although a click does not necessarily lead to a conversion, but the reverse does. The completion in this context can take different forms without affecting the conversion rate. Therefore, it does not matter whether the online marketing measure (for example, an advertisement or banner ad) aims at a purchase, a newsletter sign-up, a contact, or a registration. In short, the metric provides insight into the number of visitors to a website who have become customers.

What is the difference between lead and conversion?

A lead is when an anonymous site visitor becomes a genuine prospect and maybe even leaves address data, for example, when signing up for a newsletter. This KPI refers to making contact. A conversion, on the other hand, can represent very different actions. It generally describes the process from visit to purchase and then to repeat purchase.

Average values and influencing factors of the conversion rate

However, comparing the conversion rate to other participants or competitors is very difficult, as it is influenced by different factors. These include, for example, the industry, the advertising medium, the advertising channel, the compatibility between the advertisement and the product offer on the website (does the visitor find what was promised to them?), the usability of the site (for example, the registration process in online shops), and the payment options during the ordering process. Additional factors are the season (e.g., Christmas, Carnival, Halloween) and prices. If a shop sells goods at low prices, its conversion rate will be significantly higher than that of a costly competitor.

It should be noted that a low conversion rate with high visitor traffic is still more successful than the reverse. Specifically, it looks like this: An online shop with 15,000 page visitors and a conversion rate of 10 percent (1,500 orders) has less in the cash register than a provider with 150,000 visitors and a value of 3 percent (4,500 orders). Here, the interplay of search engine optimization and conversion rate optimization within the framework of the online marketing strategy is already evident.

However, the mentioned example does not mean that small online shops have no chance against big competitors. Rather, it is about achieving a good value within one's individual possibilities and not ignoring the above-mentioned factors. The set goal should always be formulated in relation to the offer and product, to the target group and industry. Thus, the conversion rate can be high for a small target group but low compared to an online shop from another industry.

Conversion Rate Optimization (CRO)

Conversion optimization is important when a website—whether an online store or a corporate presence—does not record a good conversion rate despite having sufficient visitor numbers. This not only refers to orders or sales but also to all other types of completions or interactions that a visitor can perform on a website, such as contacting, signing up for a newsletter, or downloading. It is essential to determine what is to be achieved with the optimization measures as part of the strategic objective. Concrete actions can be derived from this goal.

What does conversion optimization include?

Why visitors leave the webshop just before completing their order and do not make the purchase can have very different reasons. For this reason, conversion rate optimization encompasses several areas of a website. This can relate, among other things, to the structure of the page (e.g., does it follow a logical structure?) or be related to loading times. One should also not be too careless in the design of the web offering, as it should be precisely tailored to the target audience, just like the content of a website (does the content offer what the target audience is looking for?). In an online shop, complicated ordering processes or a limited selection of payment options can also lead to the purchase process being abandoned.

What do you start with?

As with many measures in online marketing, conversion optimization must first begin with an analysis of the current situation. This involves not only evaluating the most important key figures but also testing the web offering itself (e.g., for usability). This is often done by so-called mystery shoppers. After the initial analysis, experts can identify the weaknesses of the website and develop a basic concept for conversion rate optimization. This can consist of either a single measure or an entire catalog of measures. Typically, various versions of the measures are implemented during conversion optimization. In this way, one can, for example, determine which landing page is better received by potential customers. This is referred to as A/B testing.

Another fundamental rule to optimize the conversion rate: in-depth target group analysis. Which payment methods visitors to a page prefer, for example, depends on the customer segment. For instance, credit card payment is more accepted in some foreign markets than in Germany. And PayPal payment might be trendy among a younger customer base. It is important for a shop to know its customer group.

Is the conversion optimization completed?

Online marketing offers the great advantage that all measures can be measured down to the smallest detail. There is a suitable tool for every metric. This is also possible with conversion optimization. To check whether the chosen changes to the website or a landing page were successful, measurements or testings are conducted. In this way, the best functioning version of a website measure can be determined. The conversion rate can be checked, for example, with Google Optimize. However, this service will be discontinued at the end of 2023. The provider, however, offers another powerful tool with Google Analytics 4, which allows conversion tracking to be set up and A/B tests to be conducted. Thus, Analytics 4 presents itself as a tool in online marketing both for SEO specialists and CRO specialists.