Conversion (conversion) is one of the phrases I frequently reuse in my articles. Previously, I discussed the concept of conversion in different contexts in the articles titled The First Step in E-Commerce and Tracking Google Ads Conversions with Google Tag Manager.
Following the articles on Objectives and KPI, we can now address the topic of Conversion Rate (conversion rate).
Conversion Rate (Conversion Rate)
It is a metric that defines the percentage of visitors to a website or app who achieve a defined goal (typically a purchase). For example, suppose 1,000 visitors per day come to an e-commerce site from different sources. At this stage, various macro and micro conversions can be discussed, such as sign-ups, adding items to a cart, and completing a purchase. An average calculation is performed for each of these conversions1.
For instance, let’s assume that a visitor purchasing a product counts as a macro conversion. If only 100 out of 1,000 visitors complete this action daily, we can say the conversion rate is 100/1000 = 0.1, or 10%.
Let’s also perform the same calculation through a marketing campaign. Suppose your ads are shown to 1,000 people, resulting in 200 clicks. That means 200 people have reached your website or app through these ads. Out of these 200 people, let’s assume 10 complete the action by making a purchase. In this campaign context, the conversion rate is 10/200 = 0.05, or 5%. In both examples, the goal is to increase this rate. However, the fundamental metric is the ratio of visitors who reach the goal to the total number of visitors, not simply the number of visitors who reach the website.
Separate conversion rates and goals can be defined for each action (sign-up, lead form submission, email subscription, recommendation, chat, purchase, subscription, etc.). These rates are calculated based on all relevant users. For example, it would be more accurate to calculate the submission rate of a form page accessed via a button click on the homepage by users who reach that form page, rather than by users who view the homepage. For this reason, the tracking and optimization of the button click on the homepage and form submission should be considered separate processes.
As mentioned in the Google Analytics Goal Definitions article, we discussed various types of goals (session duration, engagement, page views, etc.). Therefore, for any action you’d like to track and see an increase or progress over time, you can define either a macro or micro conversion.
I specifically highlighted the term “different sources” at the beginning of the paragraph. Because, when evaluating your conversion data by source or traffic channel, you can also calculate the return on your investments for each specific source or traffic channel, optimize your processes, and manage your resources accordingly.
Conversion Rate Optimization (CRO)
Visitor activities related to their goals can be evaluated and analyzed to optimize the number of visitors reaching their goals and, consequently, the conversion rate. Various methods are used for this purpose1. As I mentioned under the heading Factors That Reduce Conversion Rate, these issues can be expressed through broad categories such as technical problems, marketing-and-sales strategy issues, and user experience inconsistencies. However, the specific details of these main categories will vary depending on the website or app2.
Factors That Reduce Conversion Rate
We can group the key areas requiring evaluation as follows:
- Technical issues related to the website or app (errors, slowness, incorrect redirects, device incompatibility, etc.)
- Setup errors in tracking processes
- Payment methods (inadequate, incompatible options, etc.)
- User experience issues (product and checkout pages, payment steps, account management, etc.)
- Strategic errors (target audience, pricing, post-sale support, etc.)