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What Is Conversion Rate Optimization & Why Does It Matter?

Every business wants its website visitors to do something for them. Whether that is to make a purchase, fill out a form, or sign up for their newsletter, there is always some sort of desired action that you're asking your visitors to take. Encouraging your visitors to complete this desired action is crucial because it increases conversions.

When you increase conversions, you can better understand your customers, lower your cost per acquisition, and increase customer loyalty. This act of increasing conversions is called conversion rate optimization (CRO), and it should be a goal for every business.

But what is conversion rate optimization in digital marketing, and why is it important? We'll be answering that and more in the article below. In this article, we'll go over what conversion rate optimization is, how to calculate conversion rate, CRO strategies you should use, and more. The more conversions you have, the more sales you'll make, so make it a goal to increase your conversion rate to grow your business.

What is conversion rate optimization?

Conversion rate optimization refers to the process of increasing the number of customers who perform a desired action. These desired actions can include filling out a form, clicking on a link, or signing up for a service. But in order for users to perform this action, you need to understand how people interact with your site and the actions they take.

Why is conversion rate optimization important?

Conversion rate optimization is important for a multitude of reasons. A high conversion rate can help to lower your customer acquisition costs because you're getting more value from existing users, rather than spending money to acquire new ones.

With customer rate optimization, you can also get to know your customers better, which can help to increase brand loyalty. By better understanding your customers, you can also improve the sales funnel and invest in the right marketing channels that reach your target audience.

CRO can help you better understand how website visitors interact with your page so that you can make necessary improvements based on their needs and pain points. It's important that potential customers have a positive experience with your brand, so make sure you take them into consideration.

CRO can also increase current customer lifetime value. For example, with CRO analytics, you can identify your most loyal customers and make an effort to reach out to them every time they interact with your brand. This will help them to feel connected to your brand, thus increasing their lifetime value.

How is conversion rate calculated?

Conversion rates can be calculated by following a simple formula. To determine the conversion rate, divide your total conversions by the total conversion action (such as clicks or visitors).

You can then multiply the result by 100 to get the conversion rate percentage. For example, if your web page had 50 conversions last month and 500 visitors, you would divide 50 by 500 to get a conversion rate of 0.1 or 10%.

The conversion rate formula is total conversions divided by total conversion action (clicks, visitors, etc)

Is there an ideal conversion rate?

So now that we've answered "what is CRO" and how to calculate conversion rates, you may be wondering if there is an ideal conversion rate you should aim for. However, there is no “ideal” conversion rate. The conversion rate you should aim for will vary for each business and depends on the industry, goals, and other factors that are highly specific.

That being said, you can still set goals based on their own historical data. It's important to have an idea of what you should be aiming for with conversion rates, but don't compare your to businesses in completely different industries. Set a realistic goal based on your business's specific needs.

How do you improve your conversion rate?

There are a few ways to go about improving your conversion rate. Every business is different and has its own goals, but here are 4 tips to increase your conversion rate.

Here are 4 tips to improve your conversion rate: Understand customer behavior, determine where you need to improve, set goals for your conversion rate, and utilize tools to track your efforts.

Understand customer behavior

First and foremost, to increase conversions, you need to understand customer behavior. When you understand your customer's behaviors, including their needs and pain points, you can create better marketing campaigns to meet those needs. Understanding customer behavior helps to optimize sales and marketing costs and increase cross-selling to existing customers.

There are a few ways you can go about getting a better understanding of user behavior, like with website session recording tools. These tools can help to elevate the user experience to ensure that your website visitors have the best possible experience on your web pages. With these tools, you can analyze how a website visitor interacts with your page and make any necessary improvements.

Determine where you need to improve

Once you have a better idea of user behavior, you can take the information you learn to identify where you need to focus your efforts. For example, if every one of your website visitors skipped over a certain portion of your website, that probably means it needs some adjusting.

Maybe you want to convert visitors to subscribers, or maybe you want every person who visits your site to fill out a form. Regardless of what you're looking to improve, it's important to set specific and actionable goals.

A few key business metrics that you should focus on improving include click-through rate, bounce rate, interactions per visit, and cost per conversion. Focusing on these metrics will help to improve conversion rates for your business.

Set goals for your conversion rate

Every business has its own unique goals, but it's important to set goals for your conversion rate. These can be a specific CRO you want to achieve, a certain percentage increase you're aiming for, or an increase in landing page conversions. Once you identify a realistic and attainable goal, you can figure out a way to achieve it.

You also need to identify the conversion metrics for your business. Remember, increasing conversions is not a one size fits all situation, and these metrics will vary depending on several factors. For example, an ecommerce site will probably focus more on product sales and add-to-carts, while a B2B site will prioritize leads generated and deals closed. Some other examples of conversion metrics include unique pageviews, sales, newsletter sign-ups, leads, and shares.

Once you've established metrics, you then need to identify which parts of your conversion funnel you want to optimize. You'll typically want to focus on the touchpoint that has the most conversions, but you should also pay attention to your highest-value pages and the pages that need improving.

Examples of conversion metrics include: Unique pageviews, sales, newsletter sign-ups, leads, and shares.

Utilize tools to track your efforts

Once you identify and implement your goals, you then need to track performance. It's crucial to track the performance of your digital marketing strategies to understand what's working and what isn't. Tracking makes you aware of how you are reaching your goals and objectives, so it's an important step that you definitely shouldn't skip.

There are various tools you can use to track your efforts, such as A/B testing tools, Google analytics, and multivariate testing. With A/B testing tools, you can compare two versions of a web page or campaign to determine which one performs better. A/B testing is a great way to test campaigns to figure out the best version for your business so you can increase online sales and drive revenue.

Improve CRO and grow your business

There are various conversion rate optimization strategies that you can follow, but remember that every business is different, so what works for you might not work for someone else. But if you want to build better relationships with your customers, lower customer acquisition costs, and increase website traffic, you need to improve your CRO.

When you improve your conversion rate, you can increase revenue and grow your business. But in order to improve your conversion rate, you need to use the right resources, like Mailchimp.

Mailchimp is a comprehensive marketing platform that can help you improve your site's conversion rate. With Mailchimp, you'll get access to various marketing resources and conversion rate optimization tools.

You can learn how to create a high-converting landing page, boost online sales and sign-ups, and much more. Whatever your business goals are, Mailchimp has the tools to help you accomplish them.

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