I often get asked by clients to explain to them what exactly conversion rate really means. I think there have been enough requests to warrant a short entry on the subject.
Conversion rate is the percentage of visitors that come to your website who actually become your clients or customers. Most online retailers or service providers have a conversion rate of somewhere around 2-3%. That's your default starting point, or as I call it the point of mediocrity. Why would anyone be satisfied with such a low rate I cannot answer, but I know one thing - improvements in the usability factor of your website translate into increases of your conversion rate. To provide some context with respect to how search engine optimization and usability optimization relate, here's how you can think of it in simple terms - usability improves the quality of your website so you retain more visitors and convert them into clients, and search engine optimization increases the volume of visitors to your website.
The good news is that even single-digit increases in the conversion rate can translate into really large benefits for your business. Consider this very modest, but also very realistic scenario:
Let's assume that your business provides services that you sell for $1500 per contract. Now, let's say that six months ago your website was accumulating approximately 1000 unique visitors per month and your conversion rate was 3%, so you got 30 contracts for that month. However, careful analysis of your traffic statistics reveals that for some reason an awful lot of people leave your website halfway through reading your Services page. Turns out that the review of your web presence shows that you have too much text on your website and it's not presented in an optimal manner that allows the visitor to make an easy decision whether or not they want to do business with you.
We then make changes to your web presence accordingly to optimize the user experience with the visitor in mind. When you check your traffic statistics after the changes you notice that your conversion rate has increased to a steady 7%. So, you now have 70 contracts per month, 40 more than before, and it's all just because visitors actually can get to what they really wanted to see and read and it was presented without impeding the logical progression of the visitor navigating your site. If every contract is worth even only $250 of profit that means that you just started making an extra $10,000 per month that was always there for the taking, but wasn't coming to you because of poor usability of you web site.
Now apply this scenario to your business and ask yourself how much of an increase in your conversion rate would you like to see? Do you know your conversion rate to begin with?
I want to end on a (hopefully) funny note. The other day I was discussing a project with a client and we were talking about conversion rates. My client asked if adding some Flash animations to her website's home page will improve her conversion rate because it would make it look contemporary. I then asked her if she remembers the BeDazzler which was so popular in the not-so-distant past. To make a long story short, here's the moral of it: the purpose of your website is not to 'bedazzle' the visitors but to help them understand why they should become your clients! Flash animations have no role in that and should be used very sparingly and only when it makes sense in the context of the website's offerings. Remember, you have 7-15 seconds on average to impress your client...with your products or services, not with a Flash animation.
Onward and Upward,
Emil