The Meaning of Conversion Rate: Everything You Need to Know

Nelet Kok
September 22, 2022

What is the conversion rate? How can you use it to improve your marketing efforts? In this installment of the blog series called the Spotlight series, we will answer and guide you on the basics of the concept conversion rate and how it plays into the bigger picture.

Conversion rate is one of the most important metrics that businesses can track, but many times business owners don't understand what it means or how it influences their business. Don't worry, #TeamTweak a local Wisconsin marketing agency is here to help!

What does the term conversion rate mean?

Conversion rate is a marketing metric that measures the percentage of visitors to your website who take action and become customers or leads.

A conversion can be seen as any individual on any platform or medium: from making a purchase on your website, signing up for your email list, or filling out a contact form. Essentially, a conversion is any desired action that you want your visitors to take.  In short, conversion means the individual likes your brand or business and they feel comfortable engaging with you. Conversion also means building a database of leads or community members that you will ultimately use to market to or to share thoughts/ideas with.

Conversion rate optimization (CRO) is the process of increasing the percentage of visitors to your website who take action and convert into customers or leads.

Why should you care about conversion rate?

Conversion rate gives us insights into many things, namely:

  • Which campaigns had the biggest response or engagement
  • Which platforms had the most hits, meaning where do you go to reach your target audience?
  • Whether the copy and design of the ad or campaign is effective
  • It helps identify a lead and the stage they're in: whether they are just browsing and like what they see or whether they're browsing looking for a specific item or service and are ready to buy.

How is it calculated?

Let's say you run a Google ad campaign. It reaches 10,000 people, and 500 of those people click on the ad. In this instance, the overall conversion rate would be 500/10000 = 0.05, or 5%.

Why is it important?

Conversion rate is important because it helps you measure your marketing effectiveness and ROI. If you're not converting, then you're not making money or growing your community.

The conversion rate is also a good indicator of your website's health. A high conversion rate means that your website is effective at guiding visitors into leads or customers. A low conversion rate could be an indicator of several problems, such as poor website design, bad user experience, badly written content or ineffective marketing campaigns.

What's a good conversion rate?

There is no one-size-fits-all answer to this question, as it varies depending on the industry, product, service and most importantly - your goals. Your business goals are built around your capacity, dreams and pockets. Making use of an agency like Tweak, means that we figure out who your audience is, the best ways to reach them and what within your scope, is a good conversion rate.

By tracking your conversion rate over time, you'll be able to figure out what is working and what isn't. Data makes all the difference! It is important because it will allow you to focus your efforts more precisely, to get more "bang for your buck!" #TeamTweak, a Wisconsin marketing agency, offers a five-hour block of time for just $500 for us to figure out all these elements, to enable you to reach your audience - wherever they are!
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PS: if you buy a block of 20 Tweak hours, it's $1600, a saving of $400 on this investment!