Getting a lot of traffic to your website is important and should be part of your websites goal of generating business, but traffic volume fails to measure how well your site does its job of turning strangers into customers. To measure this we look at conversion rates. If you were to view your site as an actual store, your site traffic would be the measure of how many people walked through the door and the conversion rate would show how effective your sales team, display cases, signage etc are at turning those visitors into customers. Looking to increase sales?, get more traffic and/or improve your conversion rate.
To calculate your conversion rate we take a goal, for example leads, and divide it by the number of visitors. We can use this number to determine visits needed to reach a goal. A site with a higher conversion rate will need less visitors to reach a goal, the higer the rate the less visits needed. A lot of focus in marketing online has been on increasing traffic to your website, and it is very important, however improving your conversion rate can be as equally effective when trying to reach goals.
There are many ways to define a conversion and individual business can define what they consider a conversion. Many e-commerce sites define a conversion as the point when a sale where for the rest of us a the initial visit-to-lead conversion is made when a visitor contact information is obtained. For businesses where a sales are nurtured it is a good idea to break down the rates into Visit-to-Lead and Lead-to-Customers. Both are very useful but they ways they are influenced differ.
The Visit-to-Lead Conversion Rate
The visitor-to-lead rate is the number of leads divided by the number of visits. For example if in one month your website received 5000 visits generating 100 leads, this would give you a lead to conversion rate of 2%. Industry averages can be vague, and although its not a bad idea to view them it is a good idea to set your own definition and a rate goal that will allow you to achieve your objectives. Once your definition of a lead is defined you can take steps to measure it and most importantly improve it.
Items that can impact your visit-to-lead rate:
- Calls to action
- Landing pages & Forms
- Quality of Content
- The design of your site
- The quality of your site traffic and where it comes from
The Lead-to-Customer Conversion Rate
Now that you have your leads you will want to turn them into customers. The lead-to-conversion rate is defined as the percentage of leads that become customers (customers/leads). The lead-to-customer rate is more difficult to evaluate because there are many offline factors that impact it that have little to do with your website. Such factors as quality of your product or service, effectiveness of your sales team, reputation, cost of product/service, etc., however your website can dramatically impact this rate directly and by assisting your offline sales efforts.
Items that can impact your lead-to-customer rate
- Automated Workflows
- Lead Scoring
- CRM Integrations
Conversions as Part of An Inbound Marketing Strategy
Conversions play a key role in driving leads and sales but are most effective when used as part of a strategy as apposed to a stand alone goal. A strategic inbound marketing plan will use methods to attract visitors to your website, customer satisfaction and conversion methods to increase sales.