Just imagine: you’ve created a beautiful and functional online store, investing time, money, and creative ideas into it. Despite the attractive design and compelling copy, people browse the pages but leave without making a purchase. What’s the problem? The answer lies in conversion.
This metric is a kind of indicator of business health in the digital environment. It helps you understand whether you are moving in the right direction, how effectively your funds are being spent, and what the return on your investment is.
Without understanding conversion, it is impossible to evaluate the profitability of advertising campaigns and the overall profitability of a project. The more people become buyers, the more significant your profit will be. That is why internet marketers carefully analyze conversion at all stages of the sales funnel.
How many calls and sales will I get by ordering contextual advertising from you?
Conversion is a performance indicator in digital marketing that reflects the percentage of all visitors to a website who have performed the desired action. This term comes from the English word “conversion,” which means “transformation” or “change.”
Conversion does not always mean a purchase. It can refer to registering on a website, subscribing to an email newsletter, downloading material, filling out a form, or any other activity that benefits the advertiser or website owner. The specific meaning depends on the nature of the business.
Warning! Do not confuse conversion rate (CR) with another common term, CTR (click-through rate), which refers to the ratio of clicks on an ad to the total number of times it is displayed. Despite similar calculation formulas, these are fundamentally different metrics.
Constant analysis of sales conversion is a prerequisite for implementing solutions to optimize promotion strategies. This indicator allows you to:
Identify bottlenecks in the sales funnel. Sometimes people show interest in a product but don’t buy it for some reason. Calculating the conversion rate at each stage of the funnel helps to determine where most customers are lost — at the application stage, when communicating with a manager, or during payment. This allows you to focus your efforts on problem areas and remove barriers that prevent the transaction from being completed.
Identify the most effective advertising channels. Conversion serves as an indicator of the success of advertising campaigns and individual creatives. By comparing this percentage for different promotion channels, marketers can identify which ones are more profitable. For example, an analysis of two online store promotions (offering discounts on disposable tableware and cleaning products) may show that the first campaign was more effective, with a conversion rate of 12% compared to 4% for the second.
Improve user experience. With a detailed picture of customer responses at each stage of the funnel, you can work specifically on increasing conversion rates. For example, analyzing the landing page of an online English language school may reveal that out of 4,000 people, only 30 signed up for the course. This indicates the need to refine the pages — perhaps adding reviews or several call-to-action buttons.
Assess the effectiveness of innovations. Perhaps the owner of an online resource is considering implementing a pop-up chat. To understand whether this change will bring real benefits, it is enough to compare the conversion rate from visits to requests before and after installing the online consultant. If the rate increases, the positive effect of the innovation will be proven.
Find opportunities for growth. Analyzing individual products or product categories can reveal the most popular items and optimize the product range in line with demand. For example, if customers at an online video game store with an overall conversion rate of 11% start ordering disc versions of games more often (conversion rate of 34%), it makes sense to expand the product range in this category to maintain high conversion rates and stimulate further profit growth.
Plan advertising expenses and sales manager workload. Tracking conversions over a long period (e.g., a year) will also help you make more accurate forecasts. For example, knowing the average conversion rate for advertising in a contextual media network, you can adjust your promotion costs and immediately calculate how this will affect sales manager workload.
How to calculate conversion correctly?
To correctly calculate the value of the indicator, use the following formula:
CR = Number of target actions / Traffic * 100%
In this formula, the values are interpreted as follows:
Number of CD. Such actions often include ordering products, registering, filling out feedback forms, and so on.
Traffic. This is the total number of people who interacted with the company during a specific period of time (e.g., a day, week, or month). This includes all people who viewed the landing page, clicked on an advertising banner, or contacted a manager.
Let’s consider how conversion is calculated in practice. Suppose that 3,500 people visited an online personal computer store in one day, 500 of whom placed an order. We substitute these numbers into the formula:
CR = 500 / 3500 * 100 = 14.28%
The result obtained means that the conversion rate was 14.28%. In other words, every seventh user who visited the website made a purchase.
However, you cannot calculate conversion once and forget about it. You need to track this indicator regularly. Constant monitoring will help you analyze dynamics and respond to changes in a timely manner. If conversion is stable or even gradually growing, this indicates the effectiveness of your marketing efforts.
If it decreases, you need to find out the reasons and take action. Perhaps the product was completely sold out in the first few minutes after the promotion started, and new buyers who clicked on the ad were unable to purchase it.
What tools can be used to calculate conversion?
Most often, simply calculating conversion using a formula is not enough. Without context, bare figures are of little practical use if you don’t know how to interpret and apply them correctly. To evaluate the indicator in dynamics, professionals use a number of auxiliary services, including:
Google Analytics. One of the most popular web analytics services. It allows you to track multi-channel sales funnels and integrates successfully with other Google services. With Google Analytics, you can easily set up goals, track user behavior, and analyze results from different traffic sources. In addition, the service is completely free.
OWOX BI. This service allows you to track end-to-end analytics, create multi-channel reports, and gain valuable insights for campaign optimization. OWOX BI integrates with a variety of data sources and is more popular among experienced marketers who know how to use it.
Matomo. An open-source web analytics service that provides maximum control over statistical information. The tool helps track events, analyze website visitor activity, generate click heat maps, conduct A/B testing, and more. Matomo provides good data privacy and can be deployed on your own server.
Plerdy. A popular tool for evaluating user behavior and optimizing conversions. The service provides valuable advice on improving performance based on heat maps, recordings of individual interactions with the page, and other user behavior characteristics.
eSputnik. A multi-channel platform that allows you to analyze conversion rates and other data on customer behavior. The tool not only allows you to find out the conversion rate, but also to collect a wealth of information from various sources to create a unified profile for each customer. eSputnik provides opportunities to set up omnichannel mailings, segment your target audience, and create detailed reports on the effectiveness of marketing campaigns.
What types of conversions are there?
Not every type of conversion in marketing is equally significant. Experts distinguish several types of conversions, depending on how significant the event is for the business and what path the customer took before completing the conversion action.
User path
Depending on the user’s path to completing the target action, conversions can be divided into two main types:
How many calls and sales will I get by ordering contextual advertising from you?
Direct. This type of conversion is completed in one step. For example, immediately after clicking on a targeted advertisement and being redirected to an online platform, a person signs up for a consultation.
Associative. This involves several preliminary interactions between the business and the user before the order is placed. For example, a person first reads material on a blog, then subscribes to a newsletter, receives a series of emails, and only then makes a purchase.
Level of significance
In terms of importance for business activities, conversions can be divided into:
Macro conversions
This is the main type of conversion, on which the company’s profitability directly depends. Depending on the business model and field of activity, macro conversion can be:
Purchase. This is the main type of macro conversion for most online stores. When a person goes all the way from their first contact with an advertisement to placing an order, it directly affects the company’s revenue.
Subscription. For many online services (e.g., in the SaaS sector), the main goal is to get as many customers as possible to sign up for a paid subscription. Even if a person has registered and signed up for a free trial, they have already entered the sales funnel and are more likely to switch to a paid plan in the future.
Submitting an application or request. In the B2B sector, as well as for companies providing expensive or complex services, the main macro conversion is often a request for a consultation, cost estimate, or commercial proposal.
Reservations or pre-orders. For some businesses (hotels, restaurants, airlines, or direct product manufacturers), reservations or pre-orders can serve as macro conversions. This helps to estimate demand in advance, plan volumes, and often receive prepayment.
Registration for participation in an event. For example, for business coaches or in the field of online education, such an event could be a webinar, training course, or conference.
Micro-conversions
These include small but necessary steps that people take on their way to the main goal. By tracking micro-conversions, you can better understand user behavior and identify bottlenecks on the path to a sale. Examples include:
Adding an item to favorites. If a buyer adds an item to their Wish List, they have clearly shown interest in it. You can encourage them to make a purchase by sending them personalized offers and reminders about items on this list. This also allows you to forecast demand and plan purchases.
Registration or subscription to an email newsletter. When a person leaves their contact details, they agree to further interaction. This helps to build more personalized communication, send useful materials and special offers.
Transition to a page with prices or terms and conditions. If a visitor is reviewing your rates or service descriptions, they are likely considering making a purchase. At this point, it is beneficial to provide them with as much useful information as possible to assist in their decision-making process.
Downloading useful materials. When someone downloads a guide, checklist, or case study related to your product, they are showing interest in the topic and a willingness to engage with the brand. This is a good opportunity to show them your expertise, offer additional materials, and gradually lead them to make a purchase.
Viewing depth and time spent on the site. If a person views several articles on the site or simply spends more than 2-3 minutes on it, they are clearly interested in the offer. You can nudge them in the right direction with pop-ups offering a personal discount or an invitation to an online chat for consultation.
Viewing video content. When someone watches a video review, unboxing, or guide on how to use a particular product, they are clearly interested in buying it. At this stage, you can offer additional information, answer any questions they may have, and encourage them to place an order before their interest wanes.
Use of online chat. If a visitor to a web resource starts a chat dialogue or contacts a chatbot, they are showing a high level of engagement. This is an excellent opportunity to find out their needs, give personal recommendations, and dispel any doubts.
Click on a link from a newsletter or social media. When a subscriber clicks, they demonstrate their loyalty to the brand. It is necessary to analyze which topics and formats generate the most response, segment the database, and personalize newsletters.
Dividing conversions into macro and micro levels provides a deeper understanding of the customer journey and helps identify problem areas. If you see that visitors are completing intermediate actions without any problems but rarely reach the final stage, then something is preventing them from taking the last step. All that remains is to identify what that something is.
What can affect the conversion rate?
The conversion rate in most businesses is not static. As a rule, it is influenced by three types of factors, which we will discuss below.
Objective
They are embedded in the nature of the business and even its model. They cannot be changed quickly, but must be taken into account when choosing ways to attract and retain customers.
Niche and product specifics. Average conversion rates can vary significantly across different industries. For example, conversion rates of 1-3% are normal for mass-market online clothing stores, while for luxury brands this percentage will be significantly lower due to high prices and longer decision-making cycles.
Price category and average check. High-cost goods and services usually have lower conversion rates than their budget counterparts. People take longer to make decisions about large purchases, compare options more often, and postpone the transaction.
Level of complexity and need for training. If your product requires additional explanation and time to learn, be prepared for a longer sales cycle. For example, complex software with many features is rarely purchased immediately—it is more often tested, its capabilities studied, and only then a decision is made.
Target audience characteristics. Behavior patterns and decision-making speed may vary depending on the specific customer group. For example, younger audiences are usually more impulsive and receptive to new products, while older generations tend to spend more time studying reviews and looking for more reliable options.
External
These factors do not depend directly on business actions, although they are still important for making the right decisions. These factors include:
Seasonal fluctuations in demand. Throughout the year, consumer activity varies significantly depending on the season, holidays, and weather conditions. Take these patterns into account when forecasting sales and allocating your marketing budget.
The economic situation in the country and around the world. Income levels, exchange rates, inflation—all of these factors directly influence consumer behavior. During periods of economic instability, people begin to save money and choose goods more carefully.
Level of competition in the market. The more players offer similar goods or services, the more difficult it is to attract the attention of potential customers and encourage them to buy. Study your competitors, their product range, prices, and promotion methods.
Changes in how advertising platforms work. The algorithms and rules for placing ads on Google, Facebook, Instagram, and other systems are constantly changing. This directly affects the cost of attracting customers and, as a result, conversion rates.
Trends, new products, and changes in target audience preferences. What was popular yesterday may well lose its relevance today. Keep track of trends in your niche, the emergence of new products or technologies that change consumer habits and demands.
Internal
They are under the control of the business and can be optimized. These are the ones to focus on if you are tasked with increasing conversion rates. They include:
Convenience and functionality. User experience directly influences the desire to take action. For example, a “Order” button hidden deep in the menu will be a serious obstacle to placing an order.
Effective calls to action. Well-thought-out and relevant instructions significantly increase the likelihood of conversion. Compare for yourself — the call to action “Sign up for a free HTML lesson” works much better than the vague “More details.”
Content quality. The better you present your product, the greater the chances of conversion. For example, in an online shoe store, having photos of real models wearing the shoes, size charts, and honest reviews significantly increases the likelihood of an order.
Relevance and honesty of advertising campaigns. If a campaign attracts irrelevant traffic or promises something that is not available on the website, it will not convert well into orders. You are unlikely to agree to order a product if you clicked on an ad with a price “from 999 hryvnia” and then saw on the website that it is a 12-month installment plan and that this is only the monthly payment amount.
The presence of social proof. This can be reviews from other buyers, photos of products, various types of certificates—anything that increases trust in your offer. Compare a product that has received 1,000 positive reviews with a product that has not received a single response from buyers. It is clear that in the first case, the likelihood of purchase will be much higher.
Loading speed. In the age of fast internet and mobile devices, no one wants to wait. If your web platform takes 3 seconds or longer to load, half, if not more, of your potential customers will leave without waiting for it to load. At the same time, if your site loads equally fast on all devices, it can increase your conversion rate by an impressive 25%.
The ordering process. Every extra field in the form can cause the customer to leave. If an online store only asks for a name, phone number, and email address, it will almost certainly receive more orders than a service where you have to fill out dozens of fields.
The presence of a loyalty program. Buyers are much more likely to place an order if they receive a nice bonus. For example, an offer such as “15% discount on the second item in your cart” can significantly increase conversion rates.
Personalization of offers. Buyers are more likely to convert if they see relevant offers based on their interests and previous behavior. A good example is the Rozetka marketplace, which analyzes order history to offer potentially interesting products based on it.
What conversion rate is considered good?
This question concerns most modern entrepreneurs. However, there is no universal answer to it. According to Google, the normal rate is 2-5%. In reality, however, the figures often vary significantly depending on the niche. In some cases, 2-3% would be an excellent result, while in others, 5-7% would seem too low.
Many factors influence the conversion rate, including the specifics of the business, the type of product, competition in the niche, and others. Let’s look at a few specific examples:
E-commerce. Here, conversion rates usually range from 1% to 5%. However, some online stores that sell high-quality goods at low prices, have a user-friendly design, and know how to effectively tailor their advertising can achieve even better results. In addition, stores with exclusive products that competitors do not have can achieve conversion rates of over 10%. However, for those offering mass-market products, the conversion rate often falls below 1%.
B2B services. Conversion rates are usually higher here—from 5% to 20% or more. After all, such companies usually attract “warm” customers who are already interested, which increases the likelihood of a sale. But much depends on the complexity of the service, its demand, and how convincingly you can convey its value.
Lead generation. Conversion rates here are usually much higher than in other areas — on average, from 10% to 30%. After all, people are not required to buy a product right away; they just need to leave their contact details. And if you also promise a gift for registering (for example, useful material, a checklist, a promo code for a discount), then the conversion rate can exceed 30% and even approach 50%.
Subscription services. These can be various online programs, hosting services, educational platforms, streaming services, etc. Their conversion rates can vary between 5% and 15%. Many factors influence this indicator: how understandable and useful the service is, what subscription options are offered, how the funnel is structured, and how easy and convenient it is to place an order.
At the same time, the success rate may vary for different projects even within the same niche. Let’s say there are two websites: one sells premium goods and has a conversion rate of 9% (narrow audience, few competitors), while the other is aimed at the mass market and only gets 2%. At first glance, it may seem that the first website has good indicators, while the second does not.
But if you calculate the monthly profit, you may find that the second site earns more. After all, despite the high average check, far fewer people visit the premium platform. Therefore, focusing solely on conversion is not enough. Other metrics are also important, such as return on investment (ROI).
Instead of chasing the “perfect” indicator:
Regularly compare current results with previous periods. If the indicators are growing, it means that your strategy is really working.
Analyze your competitors and try to use the average values in your niche as a starting point. For example, in e-commerce, conversion rates are usually 1-3%, and in B2B, they are 5-15%.
Consider your goals. If the current conversion rate allows you to make a profit and scale up, then everything is fine.
How can you increase sales conversion?
To increase conversion in the long term, you will need to work on each step of the sales funnel, ensuring that potential customers do not change their minds about making a purchase at any stage. To do this:
Work on the website
When your ads are getting clicks, but your website conversion rate leaves something to be desired — the problem lies with the page itself. Here are a few aspects that can be improved:
Use CTAs. People need to understand immediately where they are and what they need to do. If you offer online courses, write something like “Start earning money in just two months” in bold letters and add a “Sign up” button. People need to understand the potential benefits of clicking on the button.
Optimize navigation. An overly complex platform structure deters people. For example, when optimizing navigation in an online store, it is essential to provide clear names for product categories, useful filters, and a convenient search function.
Speed up page loading. About 40% of visitors leave a website if it takes too long to load. Analyze the speed using Google PageSpeed Insights and work on “heavy” elements to make them take up less space, and disable unused code.
Increase trust. To do this, you can add real reviews, your own photos of products, partner logos, warranty icons, and so on. This will help reduce users’ concerns before placing an order.
Add blocks with similar products. If a person was looking at a smartphone, for example, show them a selection of “You may also like” with similar models from the same category. This will increase the likelihood that they will find the right model on your website.
Adapt your resource for mobile devices. Today, more than 60% of visitors come from phones. Therefore, if your web resource does not display correctly on them, you will not make any sales. To increase conversion, make sure that all elements look good on mobile devices.
Add an online chat feature with a manager. Often, people hesitate to make a purchase because they haven’t received answers to certain questions. With a convenient tool for online consultations, people are more likely to follow through and make a purchase.
Optimize order forms
If a buyer adds something to their cart but does not pay for it, it means that something is stopping them. Several tips will help fix the problem:
Optimize the checkout process. Reduce the number of steps to a minimum, leaving only the most important fields — name, phone number, address, and convenient payment method. The fewer unnecessary steps the buyer has to take, the more likely they are to complete the purchase.
Allow purchases without registration. Not everyone is willing to register for a personal account, so it is better to provide the option of placing orders in one click for new visitors.
Be transparent about pricing. All amounts, including shipping costs and additional fees, should be clearly visible. When unexpected costs arise that were not previously mentioned, it can scare off potential buyers.
Offer delivery-related bonuses. For example, you can offer free delivery on all orders above a certain amount. If delivery seems expensive to the user, such “perks” can be a deciding factor.
Expand the list of payment systems. Add the option to pay online using an e-wallet and, most importantly, cash on delivery. The more options you offer, the more likely it is that buyers will find a payment method that suits them.
Set up reminders for abandoned shopping carts. If someone hasn’t completed their order, send a notification to their phone or email with a personalized reminder, such as: “You left an item in your cart! Hurry up and get it with a 15% discount.”
Describe the warranty and return policy in detail. Many people are afraid that the product they buy will not suit them. Allay these doubts by adding instructions on how to return the product. Let them know that if they don’t like the product, you will gladly take it back.
Use social proof. Place reviews from real customers next to the “Place order” button. Seeing that other people have already purchased this product and were satisfied will make new customers feel more confident.
