Numbers play a vital role in digital commerce and marketing nowadays. Metrics and key data tell you exactly how your online channels are performing. Most restaurants and other various hospitality businesses do not take the data-driven approach, as they probably do not view themselves as an e-commerce company like major consumer brands. Although, if you are selling products or a service online, you need to keep an eye on some metrics. Conversion rate is one of the most important metrics to follow. This is because it enables you to measure the performance of your app or website in real terms.
Conversion Rate: What Is It?
Conversion rate, in simple terms, is the number of visitors to a website that complete a desired goal (a conversion) out of the total number of visitors. Therefore, a conversion rate is the number of customers who purchase something through your app/website as a percentage of the total number of website visitors. This is generally measured for a particular time period. For example, a week or a month.
Here is how you calculate your conversion rate: put the total orders completed over the total number of visitors and multiply that by 100 to get your conversion rate.
You should analyse each platform separately and individually. Therefore, if you have an app and a website processing orders, you should take the relevant figures for each and calculate your rate using the above formula. You’re looking at the percentage of website and app visitors who successfully completed the cart checkout.
The Higher the Conversion, the Higher the Profit
The conversion rate illustrates how successfully a brand is able to use its online presence to transform visitors into customers. It essentially gauges how well your website or app sells its product or service.
It’s a big deal in the area of online sales which is why it gets so much attention from analysts and marketers. Improving the performance of your app or website should be reflected in this rate rising over time.
The effect on revenue should be dramatic and quick. Numbers that sound small or insignificant can actually have a huge effect. Small content changes and design adjustments on your website and app can lead to big results.
Therefore, little tweaks can lead to exponential gains in conversion rates. In addition, it generally does not involve major expenses to ensure these changes. Therefore, it represents return on investment and tremendous value.
This is your guide to tackling your conversion rate. We hope that by reading this article you now know what conversion rate is, why it is important and how to measure it. It is an essential thing to measure if your business is in online sales.