Conversion rate is the percentage of visitors who actually performed any kind of specific action on your business website. A conversion could be any action that relates to a business goal. Some common types of conversion are:
- Making a purchase
- Submitting a form
- Calling your business
- Engaging with your online chat
- Signing up for a subscription
- Registering on the site
- Upgrading their service
While conversion actions can still vary, this might give you a glimpse of the definition of “conversion”.
To sum up, a conversion is a measurable action that progresses a potential customer towards becoming a paying customer in an important way.
Why do conversion rates matter in eCommerce
In fact, conversions are important in eCommerce for several reasons. Apart from other important metrics (volume, traffic source, CPA…), conversion rate gives significant insight about your store’s performance. Websites optimizing conversion rate tend to see an average increase of 223% in ROI from their PPC campaigns.
There three main reasons why you should focus on improving conversion rate:
Revenue: Improving your conversion rate is the most effective way in terms of cost to build up your revenue. Rather than spending your marketing budget on advertising (which could reduce your website’s traffic quality) CRO is, in fact, the most reliable way to get more sales.
Value: Increasing conversion rate also indirectly increases your website’s value. By paying attention to User Experience (UX), reducing Ambiguity, adding persuasive website content, reassuring your customers, you can really boost up your products’ values.
Remarketing: there is a thing that every marketer would unanimously agree on: former customers are the best audience for future sales. Remarketing is a huge part of an effective marketing mix, but it cannot take place unless you make the first sale. Instead of spending big on marketing to complete strangers, finding a way to turn a few more uncertain lookers into customers (and then re-marketing to them) is a way more efficient way.