Blog / What is a conversion – Here you can learn everything about the conversion rate
What is a conversion – Here you can learn everything about the conversion rate
Maurice – September 30, 2023 – 10 min read
What is a conversion? What does it say and which, for online marketing indispensable, key figure is based on it?
In this guide, we’ll explain what a conversion is, how you can calculate the conversion rate, what it means, and what options there are to get more actions on your website. We also go into the factors that influence conversion rates and explain how conversion rate optimization works.
So stay tuned.
What is a conversion?
Conversion is a term that can have different meanings in different contexts. In marketing, conversion refers to the process by which a potential customer takes a specific action that is considered valuable to the business. This can be buying a product, subscribing to a newsletter or clicking on an advertisement.
Thus, conversions are the holy grail in the world of online marketing. It is the moment when a visitor to a website performs a certain action that you desire.
They are proof that your efforts are bearing fruit. Without conversions, you might as well be talking or advertising into the void. You can get this proof in black and white by using the corresponding key figure, the conversion rate. What that is, we will tell you now.
What is a conversion rate?
Conversion rate, also called conversation rate, is an important metric. It indicates how many visitors to a website perform a desired action. For example, ordering from an online store, registering on a platform, downloading a file, or even registering for a newsletter. Measurement is usually done using a web analytics system such as Google Analytics.
The conversion rate is always given as a percentage and is in relation to all visitors to the website. This means that if a website has 1,000 visitors and 10 of them perform a certain action, the conversion rate is 1 percent.
A distinction is made between the main goals, the so-called macro conversions, and smaller subgoals, the so-called micro conversions. For example, if the main goal is to buy a product, a subgoal can be to add it to the shopping cart.
But let’s look at concrete example.
Concrete examples of conversions
According to the definition, a conversion is a transformation. When referring to websites, a conversion is about the transformation of a mere prospect into a visitor who takes an action and performs an action.
This can also be only the contact via the landing page. In many cases, however, the goal is to turn a visitor into a customer. Thus, especially in e-commerce, it’s all about turning a visitor into a buyer and getting more clicks and deals through online marketing campaigns.
Basically, however, a conversion can be about quite different actions of the visitor. The following examples can describe a conversion:
- A user who signs up to subscribe to a newsletter,
- A user who performs a click on a link of the website,
- a user performing a download,
- a reader who shares website content and topics on a social network,
- the registration of a user for a profile or buyer account,
- The purchase of a product in the online store.
Now that we know what a conversion rate is, the question is how to measure it. Let’s look at it and so.
How are conversions measured?
Basically, there are three ways to measure visitor behavior on a website:
Log analysis on the web server
Using the records of your own web server, information about the number of hits per page can be found. However, this method of evaluation is only suitable to a limited extent for later optimization of the conversion rate.
Content management systems and online stores offer scripts that contain important data about the behavior of users on the website. Depending on the provider, the stored data is usually presented in the back-end.
Tracking via a third-party provider
The most commonly used method is tracking via a third-party provider. A well-known example of this is Google Analytics. In this case, a third-party service offers scripts that can be integrated into the website. Once activated, they capture all relevant data of a visitor. This data is then analyzed via the script provider’s website and can be enormously helpful.
Well, now we know how you can determine the rate, but what does its value say?
The conversion rate as an important KPI – calculation and significance
The metric for conversion is the conversion rate, or conversion rate. It can be calculated using a simple formula:
Conversion Rate = Number of actions performed : ((Number of all visitors)*100)
Depending on the industry and business, there are different average values for a good conversion rate. A high number of actions is almost always one of the highest goals of any website operator. This should have the goal of gradually increasing the Percentage of Rate. Any measures to achieve this are referred to as conversion rate optimization, or CRO for short.
The conversion rate can therefore be optimized and thus also influenced. But what actually influences conversion?
What influences the conversion rate?
The conversion rate is influenced by a variety of factors. These include features such as web design, pricing policy, the source through which visitors arrive at the website, the market environment, and the competition.
In principle, however, there are an almost infinite number of influencing factors. These can be divided into controllable and uncontrollable factors. While many short-term characteristics can be controlled and measured through testing, there are also long-term factors that are difficult to control.
Short-term influences on the conversion rate
There are certain influences that can be used to bring about conversion rate optimization. For concrete testing to be possible and for such factors to be used for conversion, they must first be identified. If this is the case, they can be used as a valuable online marketing tool and help increase the number of conversions on the website.
The following factors are great for increasing the number of conversions in the short term and turning website visitors into customers and buyers:
- the usability of the website,
- the type of keywords,
- the traffic channel,
- brand strength,
- the targeting of the site,
- the technology used on the website,
- the security of the website,
- the checkout,
- the product range of the website,
- the USPs,
- built-in trust elements,
- the content of the website.
In order to achieve a sustainable improvement in conversions, a suitable method for conversion rate optimization should be introduced and appropriate testing should be carried out. For example, a poor user experience on the website can cause a prospect to bail out of a product before making a purchase, and the conversion goal is not met, even though the product itself is well received by website visitors.
Such information can help develop marketing methods that help sell the product better. They also provide insight into what measures are needed to increase the number of shoppers in e-commerce. Even a table of contents, the selection of suitable terms, the preparation of content and a clearly visible CTA button can make a big difference on a page and determine the success or failure of a business.
Long-term influences on conversion rates
In addition, there are a variety of uncontrollable factors that can influence the conversion rate from the outside. These can also impact website business and are difficult or impossible to control. These may include, for example, the following factors:
- Legislative changes,
- Market extensions,
- demographic change,
- technical progress.
In many cases, however, these influencing factors only affect certain products and websites. The time of year also plays a decisive role. This means that users spend significantly more time on the Internet during the cold season than in summer. The number of visitors and conversions on websites also increases in this proportion. Online stores have more shoppers and can enjoy more action on their site – all without additional marketing or other types of advertising.
With this knowledge in mind, the question arises as to how the conversion rate can now be optimized.
What is Conversion Rate Optimization?
All in all, it is always desirable to achieve the highest possible conversation rate. If these are also conversions of the highest possible quality, all the better. To increase the number of conversions, there is Conversation Rate Optimization, or CRO for short. The first step is to determine the current status of the website and its functionality and efficiency. The next step is to introduce measures for improvement.
Conversion Rate Optimization focuses on usability, user guidance, clarity and goal orientation. Design, content and programming are reviewed and adjusted if necessary. A/B testing can be used to make changes and measure their impact. For CRO to be truly successful, it requires long-term implementation. Thus, optimization should be understood as an ongoing process.
How can I increase my conversions?
If you want to increase your conversion rate, you should first generate high-quality traffic and optimally address your target group. Online marketing tools such as social media campaigns, affiliate sites or even newsletters are suitable for this purpose.
Other ways to maximize conversion rates include having a visually appealing website that is functional and offers attractive content. Pleasant usability and optimization for mobile devices are the key to increasing conversion. In addition, the following measures can help:
- New marketing strategies (newsletters, social media, affiliates, etc.),
- Landing page optimization,
- Improving the Customer Journey,
- SEO, SEA and MPO,
- Mobile Optimization,
- UX design improvement,
- Content revision.
According to surveys, a high level of user-friendliness and an appealing design are the most important factors for achieving more conversions. A website that loads quickly, offers appealing filter and search functions, and enables a secure and uncomplicated ordering process reduces the bounce rate enormously.
Conclusion: The conversion rate
Basically, the more conversions made on a website, the better. If these are high-value conversions such as online purchases, downloads, or newsletter signups, it can have a direct impact on the success of the online business. This is exactly why the conversion rate is an important key figure that should not be underestimated. It gives website operators a concrete insight into their profitability and allows them to derive methods to increase conversion rates.
If you want to be successful in the long term, you should invest permanently in optimizing your conversion rate and introduce suitable marketing measures to increase the action rate. For site owners who know little about the subject, it is recommended to cooperate with a third-party online marketing provider.
What is meant by the term conversion?
Conversion means transformation. When we talk about conversions, we are referring to actions that a visitor takes on a website. Thus, he turns from a visitor into a customer or user. Examples of a conversion are the purchase of a product or the registration for a newsletter.
What is conversion rate?
The conversion rate indicates how many visitors have taken an action on the website compared to visitors who have not taken an action. For a website that has 1,000 visitors and 20 of them take an action, the conversion rate is 2 percent.
What is a good conversion rate?
Depending on the business and industry, a good conversion rate should be between 1 and 4 percent. In e-commerce, the B2C rate should be at least one percent. In B2B business, on the other hand, the rate should be 3 to 4 percent.