…and why should I care about them?
You might have heard the term conversion rate in relation to your online marketing. But what is a conversion rate, which ones matter and why do they matter? In this post, we’ll go through this so you can spend your time on the numbers that matter and the ones that don’t.
It’s good for you to “know the numbers” in your business. You need to understand what’s working and what’s not. When you’re clear on what’s happening you can make informed decisions about what to change.
Much of digital marketing is about testing and measuring. Tweaking and improving is an on-going process but you need to measure what you’re tweaking otherwise you won’t know if you’re making things more effective or less.
When we talk about conversion rates it means the percentage of something changing from one state to another. Often we’re referring to actions that people take. So things like the percentage of visitors to your website who convert into subscribers on your list. Or the percentage of subscribers on your list who convert into paying customers.
What’s a Good Conversion Rate?
There are many across-industry average conversion rates for the various aspects of online marketing. 3-5% conversion of visitors to subscribers might be considered normal for your website pop-ups. 70+% might be more desirable for your opt-in landing page. 1-3% conversion rate of subscribers into buyers is usually considered average for your email list.
However, the most important benchmarks are against your own performance. You’re looking to improve on your own metrics over and over.
Why Do Conversion Rates Matter?
Well, if you’re spending time and money building your business it makes sense to make it as efficient and profitable as possible. If you’re going to have a landing page, then why not have it converting at the best rate you can?
The thing is, if you don’t measure the performance of your business you won’t know if any changes you’re making are helping. Knowing your numbers also helps you to project the effects of your current sales and marketing activity.
If you can predict how many people you’re likely to grow your email list by then you can make a fairly accurate projection of how much money you’ll bring in. Even if your conversion rates are relatively low it’s still helpful to know them. Say the average conversion rate for email subscribers into customers is 1% and you’re converting at 0.5%. It doesn’t mean you can’t hit the goals you want. It just means that to get the sales you want you need to add more subscribers to get there.
Information is Power
When you have the information about how you’re doing then you can see where changes might need to be made.
I used to work offline with personal trainers. We’d track how many conversations they had with clients on the gym floor, how many of those turned into a trial session and then the number of people who had trial sessions that went on to become clients.
By tracking each stage like this we could get a clear picture of what was going on. If a trainer wasn’t hitting their end goals of clients/sessions/revenue we could see where the breakdown was occurring. And then we could go in and remedy that.
Identifying Which Step in the Process Needs Work
For example, if a PT wasn’t hitting their goals it might be easy to assume that they weren’t brilliant at closing the sale. But looking a bit closer we might see that actually they close nearly 100% of their taster sessions and are very successful at turning those people into paying clients. Where this is actually going wrong is that this personal trainer just isn’t booking enough taster sessions. Again, we can see from the metrics that they are converting well from conversation to taster. So this one is easy to remedy and get the trainer hitting the goals. They just need to increase the number of conversations they’re having in the first place. By converting these into taster sessions and then clients at their current rate they trainer will hit their goals in no time.
Another example is that I remember speaking with a trainer not long after I started in this particular role. He’d been highlighted as an underperformer so I had a chat with him about what was going on. He’d had five taster sessions that week and hadn’t converted any of them into paying clients. From what I’d observed this guy was a good trainer and well-liked. He seemed to be booking enough taster sessions to hit his goals so we needed to look at the final conversion to paying client.
Although it was pretty excruciating for him to do this with his boss, I made him go through a taster session with me as if I was a client he’d booked from the gym floor. He did a brilliant consultation and practical taster session. I really enjoyed it but when we got to the end he asked me how I was and then basically said, great glad you enjoyed it and just let me go off for a shower. He didn’t even broach the subject of how I could continue training with him, nevermind tell me about the relevant packages or present the prices.
So in this situation, it was about the final conversion into becoming a client. I worked with this trainer on how to approach the sales conversation with the client, linking back to the client goals and how they could achieve them. I made him role-play it with me several times (total cringefest for him, but y’know, it worked!). He went on to book another five people in for tasters that week and closed all five of them as clients.
Without knowing exactly where things were going wrong we could have spent ages going over how to have meaningful conversations or even how to conduct a good personal training session. Although it’s not to say that these other areas couldn’t have been tweaked and improved at all, they weren’t the part that was most impactful to work on.
Identifying the Weak Links in Your Business
Coming back to online business, we can look at our processes in a similar way.
You might not be hitting your financial goals and think that your email copy isn’t good enough and that’s what’s letting you down from hitting your sales target. But actually you might find that you’re converting very well, you just don’t have many people on your list.
So you want to check and track things like:
- Conversion of website visitors into subscribers
- Facebook ad conversion rate
- Landing page conversion rate
- Tripwire sales conversion rate
- Percentage sales conversions during launch
- Sales conversion rates in your automated/passive income sales funnel
By tracking each stage of the process you can work out where you need to start tweaking. Perhaps your lead magnet is converting well but your tripwire isn’t. Do you have the volume of subscribers yet to expect a tripwire sale? If yes, then your tripwire (or likely the sales page for it) is probably somewhere to start making small changes. If not, work to increase traffic to your landing page first.
Test Changes and Keep Tracking Your Conversion Rates
Again, we’re back to testing and measuring but the idea is to start from an informed place and make an educated guess about what’s going on and where to start.
So hopefully now you have a better understanding of what people mean when they talk about conversion rates. It would be useful to go and work out what yours are so you have a base rate to start tracking from.
The good news is that some software makes it really easy. For example, Leadpages shows you the conversion rate of each of your pages, no working out required!
And remember this is just a fact-finding mission. It doesn’t mean anything bad if your rates aren’t yet average or industry standard. Don’t take it personally. It’s just where things are and gives you lots of opportunities to improve things.
Similarly, if you’re pleasantly surprised to find that your conversion rates are above average don’t rest on your laurels. Remember, this is a competition against yourself. How can you find ways to convert even better?