The conversion rate is the percentage of the total number of people who took an expected action. For example, on websites, the conversion rate indicates the percentage of users that have taken actions (conversions) across your website.
Some examples of conversions are: number of purchases, clicks on a call-to-action button, downloads, engagement with advertisements, and many others.
The conversion rate equation can be applied in different cases, follow below an ecommerce example situation:
It’s important to keep in mind that the conversion rate depends on some factors, such as the type of business, what they offer or sell and the website traffic. Also, to calculate the conversion rate, you need to have the necessary data to do so – which gets easier if you track conversions. There are some platforms that can help with that, such as Google Analytics, Google Ads and Facebook Ads.
Understanding the conversion rate is important because it is a good way to identify the weakest and strongest points of the website or business performance. Moreover, it helps to improve not only the marketing and promotion strategies but also the advertising. In the sales funnel, the conversion rate is one of the main aspects. Well-built sales funnels are capable of turning many prospects into buyers.
The conversion rate optimization (CRO) refers to the process of improving the conversion rate through the analysis (Do you know how to create a Data-Driven culture? Start with this concept) of the website’s performance. The purpose is to understand the reasons why the conversion isn’t working as expected and develop conversion goals to accomplish better results. If the processes and operations are oriented by the use of reliable data and analysis of important information, the results are improved. In this way, A/B tests can be made to measure what changes are needed and how to carry them out. Other improvements such as creating good landing pages and making sure that the website is mobile friendly are also good ways to make the user experience better and increase conversions.
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