Did you know that the average conversion rate for landing pages is 2.35%? If there's anything that keeps marketers and eCommerce business owners on the edge, then it’s probably one metric – Conversion Rate. That's because it's one of the ways to ascertain how successful your digital marketing campaign is.
To check how well you’re performing with conversions, you’ll need to use the conversion rate formula. Keep in mind that conversion can fall into different categories, so when using the conversion rate calculator, we will tweak the formula a bit depending on the situation.
It’s not that difficult, so follow along as we guide you through the conversion rate formula to evaluate your eCommerce performance.
While every retailer has specific objectives that may differ from its competitors, the broader goal is usually to get as many customers as possible through checkout. That’s because the more shoppers you have paid for your products, the bigger your revenue margins.
Depending on what your specific objectives are, a conversion occurs when a visitor to your online store complete the desired action which could be any of the following:
While the macro goal for eCommerce brands is to complete a sale, marketing managers tend to be more concerned with the micro-goals that lead up to the macro goals. The idea is to optimize each micro goal in a way that influences the macro goal positively.
To illustrate, you might want customers to view a product demo. Now if many visitors are viewing that demo but too few end up buying, you might want to analyze the demo and improve it.
In the end, your micro-goals work together to improve your overall conversion rate. That’s why it’s necessary to understand the conversion rate formula because that’s how you can tell whether you’re hitting your sales goals or not.
To simplify the process of determining your eCommerce performance using the conversion rate formula, we will break the process down into steps.
Conversion Rate = (no. of conversions / no. of visitors) x 100
That’s to say if 8,000 visitors came to your website but only 400 took the desired action, then you should calculate it as:
(400/8000) x 100 = 5%
Your conversion rate is 5%
One thing to keep in mind is that some internet users might visit your website by accident if they click your link by mistake. So it makes sense to assess your conversion rate over a specified period, say 4 months.
There could be cases where the conversion rate formula cited above doesn't fix a particular situation, especially when trying to evaluate certain business-related factors like a customer group conversion rate. So let's illustrate how to use the conversion rate formula in such scenarios by discussing some crucial conversion rates for eCommerce sites.
If you're looking to take a broader view of how your eCommerce marketing activities have performed and helped you drive sales, this is the formula to use:
(total conversions/total number of visitors) x 100
Many retailers implement marketing for a particular product on different channels. And 7 out of every 10 marketers improve their marketing strategy using CRO. With the different campaigns running simultaneously, you might want to determine what channel has the best performance. Determine the conversion rate for each channel and then compare the results to see what campaign performs best:
(Total conversions from a channel/total visitors from the channel) x 100
If you have different customer groups that you are trying to sell one product in order to determine what group loves the product best, this formula can help you determine the conversion rate for each group. Simply calculate the conversion rate for each individual segment and then compare the rates to determine the best performer:
(total conversions from a segment/total visitors from that segment) x 100
This formula comes in handy when you are using multiple landing pages to try to sell a particular product. It helps you determine which is the best performing landing page:
(landing page conversions/total landing page visitors) x 100
If you're wondering why it's important to always keep abreast of your conversion rate, that's because it's an effective indicator that helps to determine how your business trajectory is impacted by your marketing strategies.
Your ability to transform your leads from visitors into buying customers is how you evaluate your marketing success. You’re not a nonprofit entity and your ideal purpose is to make sales and improve your ability to convert.
The conversion rate can also help you ascertain if you are getting it right with website changes and improvements. So if you’ve recently rewritten product descriptions, tweaked landing pages, or altered your website aesthetics, a good way to see how these improvements are panning out over time is to check your performance using the conversion rate formula.
Improving the overall conversion rate for merchants requires intentionally planning and tailoring the customer experience in a way that personalizes their journey. Customers love clarity and transparency, especially when it comes to prices, shipping, and expected delivery dates.
Thankfully, FenixCommerce factors in all of those parameters to help online retailers deliver a better user experience. This AI does so by displaying accurate delivery times, and multiple shipping options, and managing the post-purchase process so that shoppers enjoy a smooth end-to-end experience.
If you’d like to see how FenixCommerce can help boost your conversion rate, request a demo today.