Conversion rates are the percentage of people who have engaged your website and become customers. It is used in digital marketing to evaluate the performance of your marketing campaigns, website traffic and profits. This is the most critical metric for digital marketing as it directly shows if you are profiting from your marketing strategies or losing money.
To calculate this, divide the number of sales or conversions by the number of visitors. If your e-commerce website has 400 visitors a month, and you make 100 sales, your conversion rate will be 100 divided by 400, which is 0.25. Multiply the result by 100 to get the percentage. So, the CVR will be 25%.
A conversion can also refer to an action you want your audience to take or the end goal of your marketing strategy; it can be for them to register for a service, make a purchase, click on a button, and so on. A website or app may have multiple marketing goals, and each can have different conversion rates.
Importance of Conversion Rate in Digital Marketing
Conversion is a metric used to compare and contrast the performance of multiple marketing channels so you can choose the most effective one for your business. CVR can also be used to set ROI expectations when starting a marketing campaign. It allows businesses to identify valuable prospects and aid in targeting and optimising campaigns for better results.
When used correctly, the conversion rate can help you determine the effectiveness of your ad copy and the best marketing channels. It can also help you develop the best marketing strategy.
What is a Good Conversion Rate?
Conversion rates differ for different industries, but 2% to 5% is generally a good website conversion across all sectors. Some industries have higher CVR than others, so you should do market research and know your industry before you compare.