What is Conversion Rate Optimization?
Conversion Rate Optimization is a systematic process that increases the percentage of website visitors who are supposed to take a desired action in the website. It is a technical process of understanding the aesthetics of your website, how users navigate in your site and what’s hindering them in completing or performing your brand goals.
What does Conversion mean?
Conversion is a general term that defines a prospective visitor who completed any of your brand goals or objectives in the website. Being a business enterprise, your goals and objectives comes in different sizes and shapes. There are different types of conversions namely,
- Macro conversions – Purchasing a product from the site, requesting a quote, subscribing to a service.
- Micro conversions – Signing up to email lists, creating an account, adding a product to a cart.
What does conversion rate mean?
Conversion rate is the number of times a user who completes your brand goals and objectives divided by your site traffic. It’s the ratio between the number of times a user has visited the site and the number of times he/she has purchased or availed the product or service.
How to calculate conversion rate?
Imagine you have an e-commerce website. A particular user will land on your website there is a possibility for conversion. Similarly, if he/she visits three times, then there would be three sessions or else three opportunities for conversion. Most conventionally, there are three sessions for a user arriving at a website. They are,
- Session 1: No conversion – User was familiarizing themselves with the site and poking around.
- Session 2: User bought a shiny new antenna. This is a conversion!
- Session 3: User came back and bought a new set of gears and a blinking light — another conversion! Even though they bought two items, this is a single unique order and thus counts as a single conversion.
Conversion rate is calculated by dividing the purchase visits versus the total number of website visits. For example, if a user places two orders in three sessions, then the conversion rate is 66 percent. Imagine if you have 500 orders in 5000 sessions, your conversion rate is 10 percent.
Imagine your business is selling something on the basis of monthly subscription charges. A user could come back multiple times, but once they have purchased the subscription, they won’t convert again. The user behaviour scenario goes like the following,
- Session 1: User came to the site for the first time to explore the service. No conversion.
- Session 2: User subscribed to our monthly GearBox service– this is our conversion!
- Session 3: User came back to read blog articles and poke around.
What happens here is the user cannot bring conversion each time he/she visits. In this case, you need to measure conversion rate by counting the number of visitors. Here you also need to consider the number of prospective or unique users visiting your website.