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  • Writer's pictureSamradni

What is Conversion Rate in Digital Marketing?

Updated: Jun 3, 2021

Now let’s be practical if I were to ask you why do you advertise?

What is the end result you are aiming for when it comes to having your own website?

If we take The Marketing Empress as an example, my end goal is more subscribers to the blog (Oh, if you haven’t subscribed to the blog, go ahead and do that on the home page).

But, what I am talking about right now, is Conversion.

Every business has its own meaning behind the word conversion, it may not always be around sales, but conversion is any and every goal that you aim to accomplish.

So what exactly is Conversion rate in digital marketing? And how do we calculate and analyze the same?

This blog post covers all of the following topics, so you get adequate knowledge in regards to the topic.

1. What is Conversion rate?

2. How do we calculate Conversion rate?

3. What is the importance of Conversion rate?

4. How can you track your Conversion rate?

5. What is the way to optimize your conversion rate?

6. What is a good conversion rate?

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What is Conversion Rate?

Conversion rate can be defined as the percentage of visitors who come to your site and complete a particular desired task, divided by the total number of visitors on your site. For example, on The Marketing Empress, I have a subscription form uploaded on the first page itself (If you haven’t subscribed to the blog yet- Do it!!).

My conversion rate can be calculated as the number of people who subscribed to the blog, divided by the total number of people who visited the website.

How do we calculate Conversion Rate?

Let’s take an example of Amazon.

Hypothetically let’s assume it receives 200 visits per day.

I am sure it would be way more than that, but let’s stick to easy calculations for now!

So out of these 200 visits, 50 people buy something.

We can calculate the conversion rate as 50/200* 100 = 25%

To put it in a formula, as per Google Ads- the formula for conversion rate is as follow

Number of Conversions ÷ Number of total ad interaction

It’s important to note that these rates are taken into account for a specific period.

What is the importance of Conversion Rate?

In the end, it’s all about measurement.

If you launch your website, that’s just step one towards your goal.

You need to know how well it’s performing to be able to introduce new things or alter the old ones.

Understanding your Conversion rate will help you gauge what percentage of the users are actually completing a goal that you have assigned to your website, this will, in turn, help you determine your success and identify areas of improvement.

It also helps you understand various advertising channels and their success.

For example, if you are advertising on both Facebook and Instagram, with your conversion rate you can easily figure out which channel is working better for more lead generation.

How can you track your Conversion Rate?

Of course, your conversion rate needs to be analyzed using some tracking tools, we can take the following tools under consideration:

1. Google Analytics

It serves as one of the best platforms to track your conversion rate, more so because it gives you exact details about the leads acquired.

It also shares the demographics and psychographics of the leads you have generated, thereby making it a lot better for you to understand the data.

2. Making use of Heatmaps

For those of you, who have heard this term for the first time, a heatmap basically captures the eye moments of the user.

How is that useful, you ask? It’s extremely useful because you can understand what part of your website is getting maximum attention, and what part is possibly ignored.

3. Surveys

While they may not be useful for any or every type of business, surveys can help get a lot of information.

For example, one of the most important questions that you can ask here is ‘How did you find us?’

This is perfect to know where the conversion came in through.

What is the way to optimize your Conversion Rate?

It’s important to understand how a company can optimize its conversion rate.

While all the companies, would want every visitor to convert, this may not be possible in the real world.

So it makes a lot of sense to figure out the drivers that lead to people converting and more so the reasons behind people not converting.

If your conversion rate is not good, it can be because of one of the following reasons:

1.Your website landing page design is difficult to understand, so a consumer is not able to understand your goal

2. Your offering is not in sync with what your visitors want

Both of these can be worked around with, let’s see how!

The process of optimizing your conversion rate involves formulating hypotheses by better understanding why consumers are not converting and then coming up with ideas that can solve this problem.

Next up, you need to test these hypotheses- how do we do that?

We do that by the process of A/B testing.

While I will cover this concept separately, in short, A/B testing is a process where you test two different pages against each other to check which one performs better.

It’s also critical to ensure your conversion goals change with time, you need to be on the lookout for your competition.

What is it that they are offering which drives more conversion?

Is there any discount offered?

Are the products more relatable?

Answers to these questions can help you formulate as well as alter your offering in a way that improves your conversion rate

What is a Good Conversion Rate?

Conversion rates vary across industries and regions and hence it makes a lot of sense to research specifically about your area.

However, the average Conversion Rate in AdWords across all industries is 2.70% on the search network, and 0.89% on the display network*


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