Website conversion: what is it, how to increase it and whether it should be done at all?

Web designers claim to create websites that sell. But who really measured their conversion? Customers, especially if they have a marketer on staff, ask: “What is the conversion of your sites”? But what will this figure give them? What conclusion can be drawn from it? Is conversion really so important? We dispel all the myths about conversion and reveal what marketers do not talk about!

What is website conversion in simple words

What should a visitor do on your site? What is the target action?

• Pay for the goods (online store);
• Leave a request (product landing pages and sites from the service sector);
• Subscribe to the newsletter (expert blogs);
• Call (more often B2C, niches that imply urgency: tow truck, treatment of a sore tooth, etc;)
• Register (online courses, events).

That is, the target action on the site is determined based on the ultimate goal of your business. The number of such actions is called conversions. You had 10 applications from the site this month – it means you had 10 conversions.

Such final, enlarged, main conversion is also called macro conversion. But sales on the site is not a single step, but a multi-step process. Therefore, for completeness and accuracy, analysts distinguish micro-conversions – intermediate actions on the way to the main goal.

For example, in the case of an online store, the ultimate goal is to buy. But before the purchase, the user will make several other significant targeted actions:

• Will put the product in the cart;
• Goes to the shopping cart to make a purchase;
• Goes to the payment system page.

And, having carried out all these actions, as a result, he will not pay for the goods and will not buy, that is, the macro conversion will not take place. But collecting information about these intermediate micro conversions will help us understand at what stage everything went wrong. The cart icon was invisible, the user did not understand how to place an order? Did the cart have too many fields to fill in? Delivery is added only at the cart stage, and the user found out before the payment that, taking into account the delivery, he will have to pay much more than he expected? Any difficulties with the payment system, it does not accept all cards? Without micro-conversions, we would never have understood what the matter was.

Macro-conversions are needed to assess the effectiveness of the site, micro-conversions – for detailed analytics, identifying weaknesses.

Another concept related to conversion is conversion rate (CR).

How to calculate the conversion of the site

The conversion rate of the site is calculated by the formula:

CR = number of those who performed the target action / number of site visitors * 100%

There are many services on the market to collect statistics and determine the conversion of the site with varying degrees of detail. We recommend using Google Analytics – a free and accurate service.

To calculate the conversion using the formula, let’s take the number of visitors from Google Analytics – 1563 visitors per month.

The number of users who performed a target action can be taken from your CRM, as well as from Google Analytics, but in order for it to collect this data, you need to set up Goals so that the service understands which events are important and what exactly should be tracked.

In this example, applications are received when filling out the form, making a call from the site, going to the messenger through the widget. That is, applications were received from all entry points:

127 + 21 + 36 = 184 orders from the site per month.

• Let’s calculate the conversion rate using the following formula:

CR = 184/1563 * 100% = 11.77% – conversion rate of the site. That is, of all visitors who come to the site, about 12% leave orders.

Why website conversion is an important indicator

Conversion is a metric of website effectiveness. When they say that the site sells, it primarily implies high conversion.

See how website conversion affects sales:

Indicators	Site A	Site Б
Average check	1500 UAH	1500 UAH
Number of visitors per month	1 000 persons	1 000 persons
Conversion of the site	1,5%	2,5%
Sales volume	22 500 UAH	37 500 UAH

Let’s take a business with the same initial data: the same average check – 1500 UAH, the same traffic – 1 000 visitors. With a website conversion rate of 1.5%, we will have sales of 22,500 UAH. But if the conversion of the site increases by only 1%, the profit increases by 60%!

Why you should not “rest” on the conversion of the site

The previous example clearly explained why you need to strive to increase the conversion of the site. But any tool is good only if you know how to use it. It is not enough to know the number. You need to understand how it works. Only in this case the knowledge of conversion rate will be useful.

Is 12% website conversion a lot or a little? If you cannot answer this question, or you rely purely on your feelings and cases, then it is too early for you to calculate the conversion. You simply will not be able to draw the right conclusions and adequately dispose of this information.

Conversion is just a number, which, separated from other data, does not carry any information. Without knowing the background of the business, it is impossible to judge whether the conversion is high or low.

So that you can properly evaluate the effectiveness of the site, we reveal the pitfalls of conversion.

Point 1 – Traffic volume and absolute conversion rate

Let’s take an example right away:

Indicators	Site A	Site Б
Conversion of the site	10%	3%
Number of visitors per month	1 000 persons	5 000 persons
Number of requests	100	150

The conversion of our site is 10%, the conversion of the competitor’s site is 3%. If we now rest on these figures, it seems that our site is 3 times more effective!

But no. Because, knowing the conversion, but not understanding the volume of traffic, it is too early to judge. Our site was visited by 1000 people, so with a conversion rate of 10% we received 100 applications. A competitor’s site was visited by 5000 people, and with his “small” conversion of 3% he received 50% more applications than we did!

And this pattern can be traced very clearly: the more traffic to the site, the lower its conversion rate, but more conversions in absolute terms (not in %, but in units, in the number of leads).

Some companies, when they connect promotion and reach new traffic sources, complain that their conversion suddenly dropped. This is normal if the number of leads has increased, which can be seen in the example above.

Point 2 – Conversion is higher than that of competitors

To some extent, this is a consequence of the previous problem. Inexperienced marketers often argue that it doesn’t matter what your conversion rate is, the main thing is that it should be higher than your competitors. Well, it seems that if you have a conversion rate of 20% – it seems that it is a lot. And what if I say that the competitors have 50% conversion rate? And the client immediately panics, oh my God, we are worse than the competitors! We are losing money! We are bankrupt!

No. That’s not how it works at all. In the previous example, you have already seen how a competitor with a lower conversion rate got better results.

So what’s the conclusion?

You can not compare yourself with competitors, operating only with the conversion rate. If it is higher or lower than that of competitors, it does not indicate the effectiveness or inefficiency of our business at all.

Point 3 – Audience and traffic

You are an expert blogger with 100,000 subscribers and you promise to release some awesome course. You have been talking about it for several months, making some spoilers, warming up the audience. Bring to the point that subscribers are already sitting with a bank card in their teeth at a low start, waiting for sales to finally start! And then you launch the audience on the landing page, and people massively buy up the product. In this case, conversion up to 50% is the norm.

It is quite another thing when you work with a cold audience that knows nothing about you at all: they just came across an advertisement on the Internet or found the site in a search. No warm-up, we work from scratch. In such cases, even 1% conversion is the norm. And 5% is a very good result.

So what’s the conclusion?

You cannot judge the conversion of a website without understanding the warmth of the traffic. You cannot compare the conversion rate of a warm audience and a cold one.

The consequence of this conclusion is that it matters what audience we advertise to – a broad audience to introduce the product, or the most targeted, interested segments. With a wide targeting we will get a lot of traffic and low conversion, otherwise minimal traffic and high conversion.

Point 4 – Price and quality of the product

Conversion is influenced by the price and quality of the product. Cheap products always have a higher conversion rate. Because with a cheap product it is easier to decide to buy.

A person sees a super hair shampoo for 100 UAH – he buys it. He does not think, does not read the composition, does not compare options, just buys it and that’s it. Because it costs as much as a person is not sorry to spend thoughtlessly. But with shampoo for 1500 hryvnias, the buyer will think, read the composition, look for reviews, postpone the purchase for a couple of days to think. And for 100 UAH, even if the shampoo is bad, the buyer will not lose much on it.

You cannot compare conversion if the products are in different price segments. Conversion for a cheap product is usually higher than for an expensive one.

And here we come again to the fact that conversion is just a number. Some projects may have a super high conversion rate of up to 50% simply because there is severe dumping, while others have a long decision-making cycle and 1% conversion rate is the norm.

Point 5 – The impact of the average check on conversion

Another point regarding the price of goods and conversion is payback. Here it is necessary to clearly distinguish:

Conversion is a marketing indicator. And business should focus not on marketing, but on financial indicators.

Let’s go back to the previous example with hair shampoo. The conversion of cheap shampoos was as much as 10 times higher than expensive ones! But does this mean that the business of selling expensive shampoos is less effective? No, it doesn’t:

Indicators	Cheap shampoos	Expensive shampoos
Quantity of purchases	200	20
The average check	100 UAH	1500 UAH
Profit from the sale	20 000 UAH	30 000 UAH

If we stop focusing on conversion and look at the financials, we will realize that a company with 10 times less conversion was able to make more money simply because it had a higher average check.

So what’s the conclusion?

Marketers love to be measured by conversions: “What is your conversion rate? I have such a conversion rate!”. But only these figures, detached from the real financial performance of the company, do not matter at all, do not have any information. So what if one project has a conversion of 30%, and the second – 1%, what does it mean? Does it mean that the first project is great, and the second is the bottom? No, it doesn’t. Because conversion, detached from financial indicators, is just a number. The main question here is whether a particular company has enough of this conversion or not. Conversion is not high or low. It is either sufficient and pays off, or not.

Point 6 – Quality of the lead

An unobvious point: high website conversion does not mean good sales.

Let the conversion of the site is 30%. Now imagine that when processing these applications it turned out that most of them are garbage. That it is just traffic that does not convert into sales.

One has a conversion rate of 5% and all the leads are of high quality, the other has a conversion rate of 30% and all the leads are of low quality. Is it possible to draw any conclusions just by looking at the conversion rate? No, you can’t.

In our experience, we faced such a situation while promoting a manufacturer of neon signs. We set up contextual advertising in Yandex Direct, and targeted advertising was set up by the contractor on the customer’s side. Conversion from the target was about 50% higher than from contextual advertising:

Let us consider a simple example: about 200 applications per month from contextual advertising and about 300 applications from targeting.

We can imagine the following situation when the quality of the lead in the context will be much higher: almost every application is converted into a sale. While no more than a third of applications from the target are actually converted into sales.

This can be easily explained by the fact that contextual advertising brings more interested traffic – people who actually searched for this product and entered such a query in the search. From targeted advertising come not those people who were looking for our product, but those who are similar in certain ways (gender, age, interests, geolocation, income level) to the audience that usually buys from us. The targeting does not have the same degree of interest, so the leads are of lower quality.

So what’s the conclusion?

With a higher quality lead, low conversion is reflected in higher sales and better financial results.

Point 7 – Conversion of the sales department

How do your salespeople work? Do they close at least half of the incoming applications for a deal or “merge” leads? We know for sure that there are companies for whom even 1%, even 5%, even 30% conversion of the site will make the result the same. More precisely, it will not be.

The sales department does not pick up the phone, they cannot advise the client, warm up or push to the deal. And we get the situation that the site seems to work, traffic to it is pouring steadily, but there are no sales, and the business is losing money.

Let’s look at an example:

Indicators	Company A	Company Б
Conversion of the site	10%	5%
Number of visitors per month	2 000 visitors	2 000 visitors
Number of requests	200	100
Conversion of the sales department	20%	50%
Number of concluded deals	40	50

The company, which has twice as high conversion rate, concluded fewer deals as a result, due to the sagging at the sales department level.

So what’s the conclusion?

When your business does not have enough applications, do not blame the web designer or advertiser. Analyze the whole sinkhole. Often the problem is not in the conversion of the site, but in the conversion of the sales department.

Point 8 – Niche

“Show your cases, what is the conversion of your sites?”. I would just like to understand what you want to see there. What will information about the conversion of sites in complex industrial niches, in the production of custom products, B2B services and others give you if you sell door handles?

In the information business, the conversion rate can be 50%, in the food delivery niche – 12-15%, as the user is hungry and very motivated, in B2B – 1%.

So what’s the conclusion?

Each niche has its own specifics. 1% for an info business is not enough, but for a digital agency it is the norm. Do not try to evaluate the competence of the company from cases in other niches.

Conclusion: No two businesses are the same. Even if you work in the same niche, your sites cannot have the same conversion. And even if it just so happens that you have the same conversion, if you have read all the previous points, you understand that this does not mean anything and does not guarantee success.

Point 9 – Measuring conversion over the long haul

Asking for the conversion of the site, you can see a picture with high numbers like 10-15%. Just do not forget to specify for what period.

The conversion changes every day. The same number of applications cannot fall every day. In any business, it is sometimes empty, sometimes thick. Yes, in some moments the conversion can really reach 10-15%, but it may not rise above 2-3%. And on average for a month – 7-10%, almost twice lower than in peak days.

To evaluate the conversion of the site, you need a lot of statistics for a long period (at least 3 months) and on a large volume of traffic. If only 12 people visited the site and 2 of them bought, it is too early to shout that we have a conversion rate of 17%.

Point 10 – Where the traffic comes from

The site itself does not sell anything. No matter how cool it is, if it has no traffic, there will be no sales. Where will the traffic to your site come from? How will you measure the effectiveness, how will you understand whether it is converting or not?

And here there are two important points:

• How adequately is the channel of traffic attraction chosen? Maybe you are trying to sell satellite equipment on social networks and wonder why there is no conversion;
• How direct are the hands of the specialist who set up advertising, SEO, targeting and other promotion methods. It is foolish to expect conversion if you show ads for tractor parts to girls aged 18-25. Of course, these are exaggerated examples, in life everything is not so obvious, but any failure to hit the interests of the target audience or user request leads to low conversion.

And you need to understand the terms and specifics of different promotion channels. For example, SEO is a long story, it takes time to swing it. Organic traffic is built up for a long time, and it is quite difficult to see the result in conversions from it. If you make any conversion edits to the site, you will see changes in conversion during SEO promotion, at best, in a couple of months.

Therefore, to understand the conversion of the site, it makes sense to run ads for at least 3 months on a good budget. Because:

• Advertising is a quick way to drive traffic;
• The flow of traffic and customers in advertising is controlled and scalable, which cannot be said about SEO;
• Analytics in the palm of your hand – with minimal error you can understand which channel works and which does not, and where to redistribute money.

So what’s the conclusion?

Even a well-designed website can be ruined by crooked advertising. It is like buying the most expensive car and filling it with the cheapest gasoline and then wondering why you have to spend so much time in the service center. You cannot order a luxurious website and then save on promotion services.

Point 11 – Site conversion and product LTV

Lifetime Value is the “lifetime value of a customer”. Simply put, how much profit one customer will bring to the business for the entire time of interaction with him.

Different niches, different products have different LTV and different return rates. There are niches in which it is difficult to attract a lead, it is difficult to drag it into the whirlpool of sales. Conversion in such niches is low, and the price of a lead is expensive. But it all pays off because the client is with you for a long time. This is the “subscription” format of work.

For example, SEO services – it is difficult to find a client and close the deal, but when everything happened, we work with him for several months, and we do not need to attract new clients. Low conversion? Yes. Does it pay off, is the financial result satisfactory? Yes.

A more understandable example: manicure masters. Their first visit to a client attracted by advertising is always unprofitable. Competition is great, conversion is low, the price of the application is high. Therefore, in the case of the first visit, the cost of advertising is only reflected. But the specifics of the service assumes that the client will go to the master constantly, every 2 weeks for correction, every month for nail design, etc. So it turns out that the conversion seems to be low, advertising does not pay off at all, but in the long run the business is a good plus. Does it make sense to rest on the fact that the conversion is low? No, this is just a figure detached from reality, which does not take into account the peculiarities of the niche and LTV of the product.

So what’s the conclusion?

If your service or product involves long-term cooperation, you can afford a lower conversion rate than with a one-time use product or service.

So what conversion of the site can be considered high, average, normal or low

On other sites you will find that the conversion should be 10%, or 2-3%, or 20% – depending on the specifics of the business. But if you have read everything above, you already understand that it does not work that way.

Conversion is an artificial indicator. If you focus on conversion, forgetting about profit, then according to statistical indicators, everything will look like you are developing. But in fact, you are losing profit and close to bankruptcy.

You can not compare your conversion with competitors. You can not compare your conversion with the average figures for the niche. It is impossible to demand and predict the exact figure in advance. For planning, you should rely on a sufficient amount of statistics. Conversion is a constant analysis and refinement.

A good conversion is when your development and advertising costs are repaid and the site is profitable.

You can only compare your conversion with your conversion! Track them in dynamics. Why was the conversion 10%, but dropped sharply with the same traffic? Maybe the button fell off, the shopping cart on the site does not work? Made improvements to the site – measure the conversion before and after. Hired a new sales manager – measure the conversion before and after.

The dynamics of conversion and the effectiveness of changes – this is what business should be concerned about first of all. And not some mythical figure detached from reality.