What is a Conversion Rate and How Do I Optimize It?

by Patrick Icasas

2 min read

In marketing terms, a conversion is when a customer takes a desirable action. This could be signing up for a newsletter, downloading a brochure, or in the best case scenario, making a purchase. So, a conversion rate is the measurement of how many customers respond to an invitation to take action.

Here’s an example: Let’s assume you prepare an email announcing your new product or service and it includes a link to a 30-day free trial sign-up page. You send the email to a group of 100 leads. Of those 100, 20 click on the link. Your conversion rate for the email is 20 per cent.

The more customers respond, the higher your conversion rate will be. How can you increase that conversion rate? Here are a few best practices you can follow:

Target the right people.
If you’ve invented a new device that lets pets walk themselves, and blast an email to people who don’t have pets, your conversion rate is going to be pretty darn low. So, whether you’re launching a new product or pointing people to your website, make sure you’re directing your calls of action to people who are in a position to actually benefit from your services.

Make it easy.
If you want your customers to take action, you should make it as easy as possible for them to do it. Want them to click on a link? Make the link clearly visible and make it the only link on the page (to prevent confusion). Want them to fill in a form? The fewer fields the form has, the more likely they are to complete it. Ease and simplicity can greatly increase conversion rates.

Be compelling and convincing.
The “build it and they will come” marketing philosophy rarely pans out. That’s why every communication you have with customers should be properly thought out and well executed. Your pitch should resonate with your customer, and your calls-to-action should be powerful and compelling. Be clear and specific about how your service or product can solve a problem or deliver results. The better you get at connecting with your audience, the higher your conversion rates will be.

Test and analyze.
Marketers and engineers are similar in that they’re constantly testing and trying out new variables to get a better result. A good marketer will create two or more versions of something—an email, for example—and send each version to a small sample of the distribution list to compare performance. The better-performing version gets sent out to the bulk of the distribution list, and its elements incorporated into future mailouts. Consider it marketing evolution at work.

Don’t worry if your conversion rates aren’t strong right out of the gate. As you get to know your customers better, craft more compelling marketing messages, and try out different approaches, your conversion rates will increase—and so will your profits.

Photo: Creative Commons

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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