Wednesday, May 7, 2008

How Can I Figure Out My Conversion Rate?

Just what is conversion and how can it help your bottom line? Wikipedia defines conversion as the transformation of one thing into another.

Website conversion can be defined in the same way. The transformation of a website visitor to a customer, or simply put - a shopper into a buyer.

Is your website converting your visitors to customers?

You may be thinking, “I don’t sell anything on my website, so I don’t pay attention to conversion.” In my opinion, you should. Whether you are selling something, or just using your website as an online brochure for your business, conversion matters.

In today’s society, most people are out searching on the Internet first before going into a store or business. They want to see what’s out there. They shop online. While some people aren’t yet comfortable making an online purchase, they may still come to your site first to see what you have to offer before coming into your physical location or making that first call.

How can you measure conversion rates? One important method is to install analytics on your website. You need to track the visitors coming to your site to see where they came from and where they are going.

If you have an ecommerce website, when setting up your analytics to measure conversion, you’ll want to create a “sales funnel” (more on that in a future post) with a final goal page that will validate that you have made your sale.

You can set up your sales funnel to have your “thank you” page, (the one that comes up after a sale has been completed) as your final goal. That way you can track how many of your visitors reached the final goal page (the verification) of a purchase.

To figure out your conversion rate, you’ll take the number of sales and divide it by the number of visitors. For instance, if you have 4 sales and 75 visits, you know that your conversion rate is .05%. 4/75 = the percentage of your visitors who converted to sales. Obviously, you're going to want to have a higher percentage than my example :)

Once you know your conversion rate, you can gauge whether or not you are doing better converting your visitors to buyers with your new pricing, new landing page, etc.

You can also measure conversion rates for your online brochure site. If your ultimate goal is to have the potential client contact you once they have had a chance to review your services, you can create your funnel using your “Contact” page as the final goal. Another option would be to get them to sign up for your newsletter and leave their email address. Many business owners have their websites as a means to create leads. By capturing their visitors email addresses, they then have targeted leads that are interested in the product or service they have to offer.

Once you begin tracking your conversion rates, you can then begin A/B testing to increase your conversion. Only when you have a benchmark to begin with, can you measure whether your site changes or improvements are helping or hurting your bottom line.

I recommend every website owner keep track of visitors and conversion rates via analytics. The best part is, it’s easy to do!


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