If you are involved in website-related work, you will often use the word “conversion”. However, there may be few people who feel that they may not understand the meaning well or that they do not know whether the measurement method is correct.
Conversion is an important yardstick for measuring whether your measures are working well. After understanding the basics, let’s work on conversion improvement measures.
This time, I will explain the definition and types of “conversion” and the points to improve the conversion rate.
Table of Contents
- What is conversion? Explanation of terms used in marketing
- How to set conversions? Introducing specific examples
- There are 6 types of conversions
- What is conversion rate (CVR)? Explanation of importance and calculation method
- What are the average conversion rates by industry?
- How to increase conversions? Key Points for CVR Optimization (CRO)
- “CTA” that you want to stick to if you implement CRO
- Accurately know conversions and connect them to the growth of your company
What is conversion? Explanation of terms used in marketing
Conversion is an important indicator for operating websites and advertisements. In order to use it effectively, it is necessary to understand the meaning correctly.
Conversion = result
Conversion in the field of web marketing means “results”.
It refers to the state in which a user who visits a website or landing page (LP) or sees a web advertisement actually takes the action (purchase of a product or service, inquiry, etc.) that the company is aiming for.
Also, since the English notation for conversion is “conversion”, it is sometimes abbreviated as CV.
Conversion = “Conversion” instead of “Buy”
Conversion literally means “to convert”. Converting a user to a different status to improve business, such as “a new user requests a document to become a prospective customer” or “purchasing a product on an EC site and becoming a customer from a prospective customer”. called.
When we think of “converting”, there are countless points that can be defined as conversions. It includes not only purchases and service subscriptions, but also all turning points that lead to increased sales, such as free membership registration and e-mail newsletter subscriptions.
If so, you may be wondering where to set the conversion point. In the next chapter, we will explain with concrete examples.
How to set conversions? Introducing specific examples
How you set up conversions depends on your industry and advertising objectives. I will also introduce a specific example, so please refer to how to set it.
It is OK to have multiple conversion points
When determining conversions, if you focus only on the final goal such as “purchase”, it is insufficient as an effect measurement. In order to analyze the process leading up to the final goal, let’s set conversions at each point such as inquiries and document requests. By setting multiple settings, the accuracy of effect measurement will also increase.
As an example, if it is a B2B software sales company site, the conversion as the final goal will be “purchasing software”. Conversion points leading to this final goal include:
- Document request
- Member registration
- E-mail magazine subscription
- Free trial application
Introducing specific examples of conversions
Here are three examples of conversions. Since it differs depending on the type of industry and the products and services handled, let’s check while paying attention to the differences.
EC site｜”Purchase products”, “Application for samples”, etc.
Since the purpose of EC sites is to post products and services and get them to purchase, “purchase of products”, “application for free samples”, and other “favorite registration” are likely to be conversions.
EC is an abbreviation of e-commerce, meaning “to buy and sell goods and services on the Internet”, so it is called an online shopping site = EC site.
Information site｜”Member registration”, “Experience application”, etc.
In the case of information providing sites, “membership registration”, “experience application”, and “friend registration” would be applicable conversions. Information-providing sites include sites where blogs and SNS users interact with each other, and fan clubs.
Company/Recruitment Site｜”Document Request”, “Inquiry”, etc.
For corporate/recruitment sites, “request for materials” and “inquiry”, as well as “application” and “purchase” are likely to be conversions. Corporate/recruitment sites are sites that post corporate information, IR information (information necessary for investment decisions such as financial conditions), product and service introductions, and recruitment information.
There are 6 types of conversions
Now let’s look at conversion classification. Conversions can be broadly classified into six categories, depending on what is being measured.
| CONVERSION TYPE | WHAT TO MEASURE |
|---|---|
| unique conversion | number of users who converted |
| Total conversion | total number of conversions |
| direct conversion | The number of people who entered the page and converted straight away |
| indirect conversion | The number of conversions after entering the page, exiting and returning again |
| click-through conversion | The number of users who clicked on the displayed ad and converted |
| view-through conversion | The number of users who didn’t click on the displayed ad but followed an alternative path to convert |
Conversions are subdivided in this way “to measure the effect more accurately”. Especially in the advertising field, it is necessary to understand not only the points directly connected to conversion, but also the “indirect effect” and “assist effect”.
For example, let’s say a company publishes two types of ads: display ads and search-linked ads.
A certain user was shown a display ad, and although he saw the service name and catchphrase, he was not interested on the spot and did not click on it.
However, the next day, I was still curious about the service, so I searched the service name on a search engine. Then, I found the service name in the ad space, so I clicked on it, read the landing page, and requested information from the input form that was set up on the page.
In this case, paid search ads directly contributed to the conversion (request for materials). But without display ads, people wouldn’t have searched for your service name. In this way, understanding what kind of assists occurred before direct conversions leads to more appropriate strategy design.
What is conversion rate (CVR)? Explanation of importance and calculation method
The conversion rate is a numerical value that shows what percentage of the number of people who were attracted led to results. Since it is “conversion rate” in English notation, it is often written as “CVR”. Let’s take a closer look at its significance and how it’s calculated.
Why Conversion Rate (CVR) Matters
The higher the conversion rate, the lower the cost of attracting customers. Calculating the conversion rate is important to gain a more detailed understanding of the status of measures, such as the cost performance of websites and advertisements.
For example, even if it is the same 1 conversion, if you calculate the conversion rate, you can understand in more detail whether the cost performance is good or bad. Take a look at the example calculation below. Please check.
- Attract 100 people with advertising cost of 1 million yen, buy 1 person (1CV) = CVR 1%
- Advertising cost of 100,000 yen, attract 10 people, buy 1 person (1CV) = CVR 10%
Even with the same single conversion, you can see that the cost performance differs greatly. Regularly check the conversion rate in order to understand the appropriate cost-effectiveness for each measure.
Conversion rate (CVR) calculation method and specific examples
The method of measuring the conversion rate of users who flowed into the website from the web advertisement is as follows.
CVR (%) = Number of users who converted on the website ÷ Number of users who clicked on the ad and entered the website × 100
For example, let’s say you set up two different landing pages for one product. Looking at the number of conversions, landing page A has a higher number of accesses and conversions than landing page B, but it seems that the results are not very good.
So let’s compare conversion rates.
| LANDING PAGE A | LANDING PAGE B | |
|---|---|---|
| Number of accesses | 3,300 | 1,200 |
| number of conversions | 64 | 38 |
| Conversion rate (%) | 1.9 | 3.2 |
Again, landing page A seems to have a lower conversion rate than landing page B. Despite the large number of accesses, the fact that it does not lead to conversions means that there is room for improvement in terms of content. I identified the improvement points of landing page A and changed the composition.
| OLD LANDING PAGE A | NEW LANDING PAGE A | |
|---|---|---|
| Number of accesses | 3,300 | 3,300 |
| number of conversions | 64 | 98 |
| Conversion rate (%) | 1.9 | 2.9 |
Hypothetical improvements resulted in improved conversions and a conversion rate increase of nearly 1%.
In this way, it is easier to understand how to improve by measuring the effect based on the conversion rate instead of the number of conversions.
What are the average conversion rates by industry?
If you’ve read this far, you’ve probably figured out the conversion points of your website and calculated the conversion rate. And you may be disappointed that it’s lower than you thought.
However, it is not possible to judge whether it is good or bad only by the conversion rate of your company. It is also necessary to have a perspective of how to compare with other companies, preferably with the same industry.
Unfortunately, very few companies in Japan disclose their conversion rates. In the United States, average conversion rates for various industries are published.
Average conversion rate by category
| FIELD | AVERAGE VALUE | HIGH INDUSTRY LOW INDUSTRY |
|---|---|---|
| landing page | 2.35% | High: Vocational Training (6.0%) Credit/Loans (5.5%) Low: Health Care, Universities (both 2.5%) |
| EC site | 2.63% | High: Arts and crafts (4.01%) Pet products (3.53%) Low: Baby/infant products (0.87%) Beverages/food (1.00%) |
| E-mail magazine/DM (measure the opening rate) |
22.1% | High: Non-profit organization (36.15%) Eating out (33.1%) Low: Agency (16.1%) Internet marketing (17.2%) |
| Apps (rate of downloads from app stores) |
3.72% | High: Navigation (11.8%) Shopping (9.1%) Low: Stickers (* Self-made sticker apps 1.9%) Games (2.8%) |
Since the classification of the industry is different in the United States and Japan, it is not possible to make a general comparison, but it will be a certain guideline.
How to increase conversions? Key Points for CVR Optimization (CRO)
Now let’s think about how to get conversions from here. There are two ways to increase conversions:
- Increase the number of traffic (number of inflows to the page)
- Do conversion rate optimization
Increasing the number of parameters is likely to increase the number of conversions, so one way is to increase traffic. However, even if the traffic increases, it is meaningless if the conversion rate (the number of conversions to the parameter = CVR) declines.
That said, if your traffic is low and you’re seeing very few conversions, it’s probably best to focus your efforts on traffic acquisition.
Once you have enough traffic, it’s time to start conversion rate optimization (CRO).
Identify the causes of low conversion rates
In order to do CRO, we must first understand user behavior. Using access analysis tools such as Google Analytics, let’s check from which route there is a lot of inflow, what kind of transition it follows, and where it leaves.
For example, as a result of analyzing the website of a B2B company whose final conversion is a document request, the above flow can be seen. Look at the exit rate of each landing page, blog, case study page, and input form, and prioritize and implement measures.
The point of prioritization is “whether improvements can have a greater impact on sales”. What would happen in this case?
For example, suppose the following three items were particularly low.
- Exit rate of case study page
- Exit rate of input form
- Landing page exit rate
Where would the improvement have the greatest impact? I think that there are differences depending on the case, but the “entry form withdrawal rate” will have the greatest impact.
It can be inferred that the user who visited the input form is a highly motivated user who thought “Let’s request materials”. If you are still withdrawing despite this, there is a high possibility that the input work was troublesome and difficult to understand to the extent that it lowered your motivation. It’s a waste of money because it’s a loss of opportunity for both users and companies.
If you can improve the convenience of the input form even a little, the conversion rate will increase and the number of document requests will increase.
In general, the closer you are to the final conversion purchase, the more improvement impact there tends to be.
You can read more about conversion rate optimization in the article below. If you are interested, please take a look.
Optimal measures for each cause
The measures to be taken will change depending on the cause of the sluggish conversion rate. Please see below for specific examples.
- User exit due to too much information on the website
→ Measures: By carefully examining the structure of the website, as well as the amount and content of the information, and removing unnecessary elements, we will improve the path that allows users to reach conversion without stress.
In order to convey the attractiveness of products and services, do not increase the information on the site more than necessary.
If the amount of information is too much, it will be difficult to understand the leads, and the user will leave before reaching the conversion. Also, linking to another page may lead to withdrawal because it takes time for the user to move.
- Buy buttons and banners are difficult to understand, causing users to leave
→Measures: Improve the position and design of purchase buttons and banners to make them easier to understand
In addition to the information and structure within the site, check the position and design of purchase buttons and links to see if there are points that can reduce user stress.
In addition to the size and shape of the purchase button, be sure to use a highly visible and easy-to-see color scheme. At the same time, it is also important to keep the surroundings simple so that the buttons and links you have installed stand out.
“CTA” that you want to stick to if you implement CRO
There is one point that you should absolutely focus on when doing conversion rate optimization. It is a “CTA” that acts as a bridge to lead users to conversion.
CTA (Call-To-Action) in Japanese is “call to action” and refers to banners, buttons, input forms, etc. that encourage user action. It is a banner or button with the text “request materials” or “register for mail magazine”.
There are many cases where there is no CTA and it is not easy to understand and does not lead to conversion.
A CTA is a call to action device. When placed in the right place and performed well, it can make a huge contribution to your conversion rate. Conversely, if there is no CTA, or if it is not designed to make people want to click, the conversion rate will decrease.
In the case of the website illustrated in the previous chapter, if the CTA is not installed on the blog or case study page, there is a high possibility that the user will read the content and leave.
The following article also explains in detail about the design and installation location of the CTA. If you are interested, please take a look.
Accurately know conversions and connect them to the growth of your company
“Conversion” is an essential indicator for operating websites and advertisements. If you understand the meaning and types of conversions correctly, you will be able to analyze the performance of your ads and the evaluation of your site correctly. In addition, you will be able to decide what kind of measures should be taken to deal with current issues.
At the same time, it is possible to improve the conversion rate by leading to conversion without stressing the user, as well as the company’s site and advertisement operation that are close to the user. Please use this article as a reference to improve your conversion rate and sales.
