Improving Conversion Rates
Conversion Rate is a fundamental metric in ecommerce that measures the percentage of visitors to your website who complete a desired action, with ‘making a purchase’ being the most common. It tells you how effectively your website or marketing efforts are encouraging visitors to perform specific actions. A high conversion rate indicates that your site is effectively engaging visitors and driving them to complete desired actions, whether that's signing up for a newsletter, filling out a form, or making a purchase. Understanding Conversion Rate helps you to evaluate the effectiveness of your marketing strategies and the overall user experience on your site.
How to Calculate Conversion Rate
The Conversion Rate calculation is straightforward:
Conversion Rate (%)=(Number of Conversions/Total Number of Visits)×100
For example, if you have 1,000 visitors and 50 of them make a purchase:
Conversion Rate=(50/1,000)×100=5%
This means 5% of your visitors are becoming customers.
You can also look at conversion rate in different ways. The calculation above is for session conversion rate, which is the most commonly used. Alternatively, you could look at lead conversion rate, where you divide the number of conversions by the number of individual visitors. If the same visitor comes back three times, they're counted only once. This helps you understand how many unique visitors convert, giving insight into the effectiveness of your site in converting individual users.
Where to Find the Conversion Rate Metric
Google Analytics 4 (GA4)
In GA4, Conversion Rate isn't automatically calculated for all events, so you’ll need to set it up by defining specific events as conversions. Once set, you can view the conversion rates in the Events or Conversions sections. However, GA4 has limitations with the attribution models you can apply to conversion events.
Incendium
In Incendium, Conversion Rate is readily available across all standard reports, metric deep dives, and the custom report builder. It provides:
- Overall site conversion rate (session metric) in the Overview report.
- Conversion rate by different attribution models in the Traffic report.
- Conversion rate by week, channel, landing page, device, or city in the Metric Explorer.
- Ecommerce conversion rates such as add to cart rate and sales completion rate—the rate at which someone who added an item to the basket completed the purchase.
There are many different conversion rates, each serving as a performance indicator that you can use to monitor and optimize your site's effectiveness.
Applications and Optimization
To use Conversion Rate for optimizing and improving revenue in ecommerce, you’ll need to go beyond just monitoring the overall sales conversion rate. While the sales conversion rate provides a top-level measure of your site's effectiveness in driving sales from visits, examining different event conversion rates can yield deeper insights into the customer journey and help pinpoint specific areas for improvement.
Analyzing 'Add to Cart' Conversion Rate
Looking at the add to cart conversion rate can reveal how well your product pages are convincing visitors to add items to their cart. If this rate is low, it might suggest that product descriptions, images, or the perceived value of the product aren't compelling enough. Investigate page interactions, such as image scrolling or video plays, that are most likely to lead to an add to cart action. For instance, if high image gallery interaction correlates with high-performing product pages but is low on poorly performing ones, improving product imagery could be the key to boosting add-to-cart rates.
Examining Checkout Completion Rate
Checkout completion rate - which is —the percentage of people who start the checkout process and actually complete their purchase —can highlight friction points causing cart abandonment. High drop-off rates during checkout may indicate issues like unexpected shipping costs, complicated checkout forms, or concerns about payment security. By identifying these barriers, you can implement targeted optimizations such as streamlining the checkout process, offering free shipping thresholds, or enhancing payment security assurances.
Taking Conversion Rate Analysis Further
Breaking down conversion rates even further allows analysis of the impact of specific elements on the user journey. By closely monitoring detailed event conversion rates and understanding the behaviors and interactions that lead to conversions, you can make data-driven decisions to optimize each step of the customer journey. This granular approach not only leads to increasing sales conversion rates but also enhances the user experience, leading to higher customer satisfaction and long-term loyalty.
Conversion Rate is an important metric for understanding how effectively your website converts visitors into customers. While the overall sales conversion rate provides valuable insights, analyzing specific conversion rates for different events along the customer journey offers deeper understanding and opportunities for optimization. By analyzing and improving areas like add to cart rates and checkout completion rates, you can identify and address obstacles in the customer journey, leading to increased revenue and a better user experience.
