Why Your Website’s Conversion Rate Matters

1996 was a great year. I was 10 years old and the Internet finally arrived to my home. I don’t remember much other that we used Altavista to search for content on the web; there was no streaming content, no YouTube or anything like that; we shared content and music through eMule and Napster; all website were portals with tons of animated GIFs and useless crap…

Oh! And let’s not forget about all those “under construction” sites and signs:

But if there’s one thing I do remember clearly from that time, it was THE ADVICE that all businesses were told: “Build a website, man. You gotta be on the Internet, cuz that’s the future! That’s how you’ll get more customers and money!” And that was it—just being on the Internet meant you’d be able to become rich, right?

More than 20 years later, the Internet has changed radically and so has our understanding of its potential and usefulness. Today we have social media (with their advantages and disadvantages) that allow us to be connected with our friends and family, as well as to follow closely the brands or celebrities that we like the most. We have platforms like WordPress to create websites with dynamic content easily or WooCommerce to create online stores. And, above all, we have learned a lot about online marketing and content marketing: how to reach larger audiences and how to get more followers, more customers, more revenue.

And that’s precisely what I want to talk to you about: how to improve your website by focusing on its conversion rate and the important role this metric plays in your business. So, without further ado, let’s learn what it is, why it’s so important, how to interpret it, and how to improve it!

What’s the Conversion Rate?

Most websites have one clear purpose or goal, one reason for being. For example, our website, neliosoftware.com, has the ultimate goal of getting you to subscribe to one of our services. But it also has some secondary goals such as, I don’t know, that you subscribe to the newsletter, follow us on social media, or start a trial period of a service.

So, now that we know that a website has “a goal”, it’s time to define two basic concepts:

1. Visitors. They are all those people who, over a certain period of time, access our website, browse it, and consume its content.
2. Conversions. When a visitor fulfills our website’s goal, then a conversion appears. For example, when a visitor goes to the Nelio Content pricing page and subscribes, we just got a new conversion.

From these two concepts we can easily define a website’s conversion rate. As it name states, it’s the ratio between the number of conversions we have on the website and its total number of visitors. For example, if our website has 850 visitors and there have been 20 conversions, the conversion rate is 20 / 850 = 2.35%. This means that for every 100 visitors that come to this website, we can assume that there will be between 2 and 3 conversions.

Why Does Conversion Rate Matter?

The answer is quite obvious: the conversion rate is important because it’s a metric that tells us how good our website is when it comes to helping us achieve our business goals. It’s that simple. If we created our web to get more customers and its conversion rate is 0%, well… there’s clearly something going wrong. Tremendously wrong. By contrast, if everyone who comes to our web purchases something, we’ll have a conversion rate of 100% and that’s just awesome!

Unfortunately, extreme conversion rates are unusual—you won’t see a website with a 0% or 100% conversion rate often. And this begs the following question: if I tell you that our website has a conversion rate of, I don’t know, 2.5%, is it good or bad? ? We need something more…

For the conversion rate to be really useful and help us to identify the quality of our website with respect to a certain objective we need to study it from one of the following perspectives:

1. Evolution of the conversion rate over time. As I was saying, it’s impossible to know if a 2.5% conversion is just a good or bad figure. However, if we study the conversion rate of our website over time, we’ll see how it’s evolving and, therefore, we’ll see its trend. So, for example, if we start at 2.5%, and the next month we have 2.8%, and the next month we have 3%, and a few weeks later we reach a 4% conversion rate… well, it’s clear that whatever we’re doing on our website, it’s working just fine, because we’re getting better and better results!
2. Comparison with the industry. The other perspective for determining how good our conversion rate is is through comparison with the ratios other companies have. For example, in a recent article by Khalid Saleh you can see the average conversion rates per sector. If the sector in which we are (software) has an average conversion rate of 4.10% and our website has a conversion rate of 2.5%, it’s obvious we’re behind our competition and that we have to do something to improve.

Conversion Rate Doesn’t Always Matter… Because It May Be Lying To You

As we have seen at the beginning, the conversion rate is defined as the ratio between two figures: the conversions of our website and the number of visitors we have. Therefore, the conversion rate can go up (or down) if we change one of the two figures.

For example, if we improve our marketing campaign and reduce the number of visitors who are not usually interested in our products, we’ll reduce the total number of visitors (for example, from 1,000 to 600) and perhaps maintain the number of conversions (say we had 100), thereby increasing the conversion rate (from 100/1,000 = 10% to a new conversion rate of 100/600 = 16.67%).

The conversion rate is often used as a metric to identify how good the web is at generating revenues, but there’s no direct correlation between these two concepts. As the author describes in the Website Magazine, there are many possible explanations as to why the conversion rate can get better (or worse) and have a completely unpredicted impact on our sales/revenues:

1. Your conversion rate relies solely on set goals and visitors: If your conversions increase, then your conversion rate increases.
2. Your conversion rate decreases if your visitors increase: If your conversions hold steady, but more people visit your site, then your rate falls. This is seen as a bad thing – even though you are making the same number of conversions as before.
3. Eliminating low-quality traffic increases your rate: But what about the sales you have lost by eliminating that low-quality traffic?
4. A “typical” conversion rate? There’s no such thing: All businesses are unique when it comes to conversion rates. Your rates may tell you your business is failing when in fact it is doing fine – it depends upon which companies you are comparing yourself to.

As you can see, the conversion rate only gives us a biased picture of the quality of our website. We have to consider all the numbers at our disposal (including, of course, absolute conversions and visits figures) to really understand what’s going on. Being aware of these limitations will help us make better decisions, so don’t be afraid and gather and keep as many information as you can.

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How Can You Improve Your Website’s Conversion Rate?

There are a variety of actions and recommendations we can take to improve the conversion rate of our website. In Wikipedia, for example, we can find several examples:

• Employ Attention, Interest, Desire, Action (AIDA) principles to design the user experience through the conversion funnel,
• Enhance the user’s credibility and trust in the site, the product, and the business by displaying third-party trust logos and by quality site design,
• Improve site navigation structure so that users can browse and shop with minimal effort,
• Offer active help (e.g. live chat, co-browsing),
• Generate user reviews of the product or service,
• and so on and so forth.

Unfortunately, this is easier said than done. How can you “improve” the user experience? What does it really mean to “improve” it? Which changes are helpful and which ones are harmful to this goal?

A/B Testing is The Best Technique to Improve Conversion Rates Methodically

A/B Testing is a methodology that allows us to compare two versions of the same website and see which one works best. Neil Patel has a great post about this topic—if you don’t know anything about it, I strongly recommend you visit his blog and read it carefully.

If you are interested in improving the conversion rate of your website with split testing, the smartest thing to do is to use an A/B Testing tool. Personally, I recommend the WordPress plugin we developed: Nelio A/B Testing. With it you can create multiple variants of your pages and content and see which one gives you higher conversion rates.

In Summary

All websites exist for a reason and have a purpose, a goal. When a visitor fulfills that goal, we say there’s been “a conversion“. That’s precisely the basic idea behind the conversion rate metric: determine how good a website is getting conversions compared to the total number of visitors it receives. This metric is great because it’s simple to obtain and easy to understand, but you have to be careful because it only tells a (small) part of the story.

I hope this post has solved your doubts and will help you to start thinking about how to improve your website. See you in the next post!

Featured Image by Mitch Lensink on Unsplash.