Marketing 101: What Is Conversion Rate? Why It’s Important!

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Phil Hughes

So what is conversion rate and why is it important when it comes to marketing data?

A quick and dirty answer. The percentage of website visitors who complete a desired action.

Now, you think that it’s not important when it comes to marketing. “As long as people are visiting our website, then we are good”.

But you need to align the goals of a marketing campaign with the goals of a business. Getting people to a website is all well and good. Suppose they aren’t completing a desired action. The marketing campaign is unless.

What is a Conversion Rate?

As I’ve touched upon. The basic definition is – the percentage of visitors who take a desired action.

And what I like about the conversion rate metric. It’s flexible, you can apply it to different goals for your website, or marketing campaign.

It helps you to track conversions like sales, signups, downloads, and so on.

I’ll give an example of one of our own goals for Elementary Analytics.

We’ve put together a free, downloadable marketing report generator. It works inside Excel. If you give us your email address, you’ll be able to download it. And we’ll email you a copy too.

Next, we put a bit of ad spend behind it to see how the funnel worked, tracking conversion rates as the key metric.

This gave us two conversion rates to track. First, check how many people clicked the ‘download now’ button on the ad. Next, to see how many email addresses we got after someone viewed the landing page.

Calculate Conversion Rate: Real-World Example

Going back to our own marketing test.

How well did our landing page perform?

For the duration of the ad campaign. The Excel report landing page had a total of 52 views.

These are not huge numbers.

Yet, 5 people gave us their email addresses and downloaded the report generator.

So to calculate the conversion rate. We divide 5 (the conversion metric), by 52 (total views of the landing page). And multiply the result by 100.

That gives us a conversion rate of 9.6%

That’s a great start. We now have a baseline to work with.

What tracking conversion rate measures. Is how effective a marketing campaign is.

For us, it’s turning traffic into leads. But another campaign could be how effective is that campaign at turning traffic into customers.

Why Conversion Rates Matter

Conversion rate is the key performance indicator (KPI). For the success of a marketing campaign.

It shows whether you’re putting the right thing (offer) in from of the right people (audience).

Going back to our report generator/ad campaign example.

Our ad has a conversion rate of 3.34%. That’s excellent.

The landing page has a conversion rate of 9.6%. Awesome.

Conversion rate also helps you with granular campaign optimization.

Again, in the above example. We know how well each “moving part” is working. For me, I’d like to improve the conversion rate of the landing page.

We know where to focus our efforts.

Another great thing about conversion rate. You can tie it back to business goals. Like revenue.

Many eCommerce brands use conversion rates to track campaign performance. And then project revenue numbers for a new product range.

Industry Averages

So, how do you know if your conversion rate is any good?

A lot of other people would say compare to industry averages or your competitors.

That’s a load of ‘hogwash’

Run a campaign. Track the conversion rate. After the 7 days, see what that conversion rate is. This is then your baseline.

Make a tweak and see if you can beat the baseline over the next 7 days.

That’s it, that’s the game. You are only competing with yourself. No one else.

Factors that Impact Conversions

This could be a never-ending section.

It all depends on your goals. And what your conversion rate is tracking.

I’ll give you 5 factors to look at to get you started.

Target audience alignment.

Are you showing the right thing, to the right people, at the right time? A top tip is to read about ‘cold’, ‘warm’, and ‘hot’ traffic.

Usability and clarity of website or landing pages.

Are you trying to be too clever? Do people know in a second or two what that page is about?

Perceived value of offers and CTAs

This is a tough nut to crack. Do people care enough about what you are offering? Is the offer that good people would be stupid to not take action?

Trust and credibility signals

Again, this is a tough one. Have you got social proof? Or enough facts to back up what you’re offering.

Page load speed & Mobile friendliness

Most people will now view a webpage on their mobile device. So it needs to work on mobile. And it needs to load fast. Or people will leave.

Strategies to Improve Rates

So what can you do to improve your current rate?

As with the previous section. This could be a 2,795-page guide in itself.

It’s hard to know without knowing the exact conversion you are tracking. As well as the business goal you’re trying to hit.

Here are 6 things I look at. And suggest you read up on them and test them out.

  • A/B testing
  • Conversion funnel analysis
  • Personalizing experiences
  • Strengthening CTAs
  • Streamlining checkout
  • Leveraging social proof


Conversion rate is one, if not the most important metric to track to see how well a campaign is performing.

It’s defined as ‘the percentage of website visitors who complete a desired action’.

It helps you see the importance of marketing ROI and performance. As well as giving you a baseline and an easy way to see if performance is improving or not.

As well as aligning with business goals and targets.

I’d recommend you start monitoring your own conversion rates. And experiment with optimizations, it’s a fun game to play. To see if you can beat your previous “score”.

Oh, if you want to see how conversion rate works inside a data-driven marketing campaign. Check out our amazing guide on data-driven marketing.

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