The world of internet marketing is complex. Identifying the best course of action to take when trends change can be overwhelming. When trying to optimize your digital marketing strategy, conversion rates play an important role. While conversions do not always mean a sale has taken place, they do indicate that someone has taken an action towards purchasing your product or service.
What is Conversion Rate?
According to Techopedia, the conversion rate is an equation used by online marketers and advertisers to compare the total number of visitors to a website to the number that convert into paying customers, users or subscribers. It is calculated by dividing the total number of unique visitors who’ve become users, subscribers, and customers by the number of total unique visitors.
Why Do Conversion Rates Matter?
The conversion rate of your website matters because it is the metric use to determine business profitability. It’s important to track conversion rates and the benefits created by them such as:
Increasing Conversion Rates is Cheaper Than Increasing Targeted Traffic
One mistake many businesses make is thinking the answer lies with having more eyes on their service or product. What they don’t realize is that increased traffic to an unoptimized website will result in continued low return on investment. However, if they concentrate on converting the traffic they already have, their return on investment and revenue can significantly increase without putting more money towards generating additional traffic.
Tracking Conversion Rates Allows You to Make Predictions
Conversion rates can be used to determine sales based on current data and website visitor information. It can also be used to see if something is not working, which then gives your business the chance to fix it and improve customer experience on your website on an ongoing basis.
Opportunities for Improvement
A good conversion rate can always be improved upon, which in turn will boost your bottom line. An improved conversion rate helps lower the costs associated with acquiring new customers.
Money Saved Equals Increased Revenue
Savings from your improved conversion rate means there is more money available for use in other areas such as expanding your product catalogue or online marketing efforts.
Improved Conversion Rates Mean More Sales, More Trust
Your website must provide an environment where the client can take action to satisfy their need. Your website should not only reassure them that you understand their problem, but that you have the right solution. This will spark an immediate connection between your site and the visitor, convincing them that you can offer a solution.
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