Conversion Rate

Conversion Rate is the percentage of users who take a specific action.

Updated
May 25, 2023
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Understanding Conversion Rate

Your conversion rate is the percentage of users who take a specific action on your store site.

In Tydo, that action is placing an order on your site. It’s shown as a percentage. 

How do you find your conversion rate? It’s the number of conversions (or actions taken) divided by the total number of visitors to your store. 

What’s the goal? Aim for a high conversion rate! You want site visitors to convert into paying customers. How do you do that? Let’s learn more about ecommerce conversion rate and what levers you can pull to increase it. 

How is conversion rate calculated for ecommerce?

Conversion rate (CR) = (total orders / sessions) x 100

Important note: At Tydo, we exclude test orders.

Example

Suppose you run an online ceramics brand where you sell handmade mugs. In the month of April, your site had 500 website visitors; at that time, 15 orders were placed. Your conversion rate would be = (15/500) x 100 = 3%. 

Takeaway

Conversion rate is sort of like a recipe.

Recipes provide the guidelines for a dish, but you can always make it your own—swap out ingredients, add a bit of this, and test some of that. Depending on what you alter and if you miss anything, sometimes the recipe turns out great, and sometimes it falls short. After you experiment, you see what works to create the perfect dish. Chef’s kiss!

You’ll want to increase your site’s conversion rate with clear, impactful messaging, imagery, and landing pages. The higher the percentage, the more actions and sales you’ll see for your business. 

But, remember: It’s not just about driving more traffic (the number of people visiting your site) to your website. While you want to drive more visitors, you also want to keep an eye on the quality of potential customers. The key is to convert them from browsers to shoppers. To do so, focusing on improving your user experience for site visitors and building a high-functioning website are two ways to accelerate a customer’s path to purchase.

Read more about Conversion Rate

4 ways to improve your ecommerce store’s conversion rate

How do you improve your conversion rate benchmarks? It’s about moving the right levers to see what works.

Build an effective homepage and create an excellent first impression

  • Catch potential customers with a great, clear hero image or animation. For example, Jolie uses a short video to highlight the brand’s filtered showerhead in action. You know exactly what they sell and how it works right off the bat. 
  • Think of buttons (CTAs) as communication points. They call out the desired action you want the visitor to take. Make them a focal point. 
  • Craft a clear headline. It shouldn’t be long or confusing. Here are some of our favorites: “A New Kind of Soda” (Olipop), “You make dinner, we’ll do the dishes” (Dirty Labs), and “Just the right dose” (Dose). 
  • Learn more about how to build the perfect homepage from the team at Oddit. 

Craft the perfect product description page (PDP)

Product description pages (PDPs) are one of the most important components of any ecommerce store. They provide more information about your product that helps the visitor convert, and they get visitors to the next phase of the buying process: add to cart. 

  • Optimize your website for mobile. Most customers are on mobile devices, so design your product pages to be mobile-first, especially if you’re working with influencers. Nik Sharma has some excellent tips for creating an effective PDP.
  • Give customers the details. Huron does a great job of including subscription options, details about the product, reviews, and social media content on the PDP. 
  • Make product pages easy to browse. Use clear colors, enlarge button sizes, and enhance images to prevent accidental clicks away from products. Plus, pull up your reviews for each product. Social proof goes a long way. Learn from this fabulous Glossier PDP. 

Drive traffic to landing pages

Harness the power of landing pages. They’re an important growth tool, and they’re a goldmine for conversions. First, what is a landing page? It’s a standalone website focused on driving conversions (exactly what you want!); it’s mostly used for marketing campaigns.

You don’t want to send people viewing your ads to your homepage or PDP with little to no life. Direct your paid traffic to landing pages, where you can explain who you are, what you sell, and why people love your product. Here are some tips: 

  • Use clear messaging. Effectively communicating about your brand and your products will improve your conversion rate. For example, this JUDY landing page highlights their emergency kits. It shows you everything that comes with each kit, the price savings you get, and reviews showing the value of the product. It’s all in one easy-to-read page. 
  • Bring up reviews or add a UGC section, says Bailee Cooper of Sharma Brands. People want to know what other people are saying about the product. Reviews will help them convert faster. 

Landing pages create less friction. The path to purchase is simple: Ads > Landing Page > Checkout. 

Use tools to accelerate the path to purchase

Customers don’t want to jump through multiple hoops before making a purchase. Make it easy for them to see a product they want and buy it right away. How? You can create an intuitive, clear user experience and remove as much friction as possible.

Here are a few tools for simplifying the buyer’s journey

  • Use a quiz to help customers find ideal products. Jones Road Beauty uses Octane AI to connect shoppers with perfect foundation matches. Their quiz captures emails and helps Jones Road build a personalized relationship with the customer (and shopping experience). 
  • Edit your images, so they’re easy to scan. Oddit recommends 1:1 (square) aspect ratio images on your product description pages. You don’t want extra white space or distractions. 
  • Incorporate social proof into landing pages to build trust in your brand and product. What’s social proof? We’re talking about reviews and testimonials. For example, in the middle of this Jiggy PDP, there are testimonials from real customers

What is conversion rate optimization (CRO)?

How to define conversion rate optimization (or CRO)

CRO stands for conversion rate optimization. This is all about increasing the percentage of conversions. 

A higher conversion rate means understanding your customers and site traffic. You’ll want to look at their behavior on your website. 

When we say conversions, that could be making a purchase, adding products to a shopping cart, or signing up for emails. It’s up to you to define what specific actions you want your customers to take and how to measure conversion. As we mentioned at the beginning of this article, at Tydo, we measure conversion rate by the percentage of customers, who place an order on your site. 

What is the average conversion rate?

It depends!

A good conversion rate varies on the industry, the quality of your site visitors, and your website structure. There are even more factors to consider. 

It’s not that helpful to think about an average conversion rate. What matters is that you define a conversion goal that’s meaningful to you and that you consistently pull on the levers to increase that percentage. 

Conversion Rate Optimization Strategies 

Here’s the bottom line: you need to know your customer and user behavior. You should understand what they want or need, what pain points they have, etc.

Analytics tools, such as HotJar’s heat mapping, for example, are one way to learn more about how your website functions for visitors and what users are clicking on. What’s working? Where are there difficulties? Where can you make improvements with a call to action?

An audit can also show you where to make changes to optimize the conversion rate on your ecommerce site. 

A/B testing is another way to test out how different changes to your site impact performance. Some of those changes—copy, imagery, and website flow—will earn you a conversion rate. Lean into what works.