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Understanding Conversion Rates

Understanding Conversion Rates

Conversion Rates and Their Significance

There is a great deal of confusion concerning conversion rates among those who are newer to Internet Marketing. Some marketers who teach new marketers make it all very confusing when it is actually quite simple.

A conversion rate is simply the ratio or percentage of web site visitors that take the action that you wanted them to take. When you improve your conversion rate, you are essentially getting a higher percentage of your overall site visitors to take the action that you wanted them to take.

Some people think that the conversion rate is limited to the number of sales made, and this is absolutely wrong. Your call to action could be any number of things. In the online world, however, your all to action is usually limited to a sale, to a sign-up, or to a download. All of these things must be measured so that you not only know how you are doing but also know whether you need improvement or not.

The conversion rate is really very easy to figure out. You first need to look at your website statistics or your weblog. What you need to know is your number of unique visitors. You also need to know the number of actions (sales or sign-ups) that have been taken. With those two numbers, your conversion rate is figured using the following formula:

Sales/visitors x 100 = Conversion Rate


The number of sales divided by Number of Visitors multiplied by 100 = Conversion Rate

This formula works for figuring out any type of conversion rates that you want to figure. For example, if you wanted to figure the conversion rates for sign-ups, you would replace the number of sales, with the number of signups. If you wanted to determine the conversion rates for your newsletter, you would replace the number of visitors with the number of subscribers.

Along with conversion rates, however, there is other important information that you need to know. This includes the cost per visitor and the cost per customer. If you don’t know how much it is costing you to attract new visitors, and how much it is costing you to convert those visitors to customers, you don’t know how much you can afford to spend to attract new visitors and convert them to customers.


To determine the cost per visitor or CPV, use this formula:

Marketing cost/number of visitors x 100 = cost per visitor

To determine the cost per customer or CPC, use this formula:

Marketing cost/number of sales x 100 = cost per customer

Simply put, you absolutely must know what your conversion rates are, and what it is costing you. Without this information, you cannot expect to succeed, and any success that you have will most likely be short-lived. Building a business is like anything else, it is an ongoing learning process, full of continual changes in an effort to always improve.

Now that you have your current information, how can you improve your conversion rates? Again, there are many things that you can do to improve your conversion rates, but before we get started with that, we need to touch on one other thing.

If you make changes, and don’t document or remember what those changes were, you will resemble a chicken running around with its head cut off. It will eventually become mass confusion, and you won’t have any idea as to where you should turn next.

Tracking conversion rates and costs are important. Tracking changes are also important. As you work through this publication, make sure that you pay special attention to the section on testing, and make sure that you are using the tools needed to track how well your changes are doing.

Changing one small thing at a time is one way of improving conversions, but it will improve conversion rates slowly, when you may prefer for conversions to be improved quickly. With proper tracking, you can change multiple things, and still see how much each change has improved your conversion rates, improving the conversion rate much quicker in the process.

In most cases, no matter how successful you are, or how high your conversion rate is if it isn’t 100%, there is room for improvement. There are numerous ways that one can improve their conversion rate, and expert marketers around the world spend most of their working hours doing this very thing. Are you ready to improve your conversion rate? If so, read on!

Have One Purpose per Page

The first way to improve conversions is to have just one purpose per page. This limits the action that your customers can take, and gives you a better idea of what is and is not working. Each page should have one purpose or one call to action.

Throughout this publication, you will be asked to look at things from your visitor’s point of view. There is a good reason for doing this. Let’s say that you think a blue outfit would look great on your mother. Unfortunately, your mother hates the color blue with a passion. Do you think that you will convince her to buy that blue outfit? You need to see things from her point of view, just as you need to see things from your visitor’s point of view. This is important to your conversion rate.

With that said, look at your sales page from your visitor’s point of view for just a moment. You arrive at the page and are confronted with numerous directions to go. You look at the page for just a moment and click a link. You have whisked away to another page – or another site – and you will never find your way back to the original site.

One action per page – let’s take a look at that. You want to build a list and have your visitors’ signup for your newsletter. You want to sell a product. You want your visitors to watch a video. You want your visitors to register for a teleseminar. You want too much from your visitors at one time!

If you present all of this to your visitor, on one page, they won’t know which direction to go. A better way to present this to your visitors would be with a navigation process. Note that the process begins with the right advertising, targeting the right visitors to your site, which is discussed later. For now, let’s assume that you have brought the right visitor to your site. The best thing to do is to bring them to an opt-in page, where you collect their name and email address. In exchange for this, you are going to give them access to an informational video. They fill in their name and email address and are instantly taken to the page that loads the video.

Below the video, there should be a link that takes them to the signup page for your teleseminar, where they can get more in-depth information, which of course relates to your newsletter and the video that they’ve just seen. Once they’ve registered, you may present them with your sales page…or you may reserve that until the teleseminar. The key here is that you have a navigation process, often referred to as a sales process, which you lead your visitor through, with only one action available on each page that they have seen. The only other option that they have is to leave your site, and if you’ve attracted the right visitors, you really don’t have to worry about them taking that option.

Being Different Is Good

Have you ever shopped online? If so, the chances are good that you had more than one choice when it came to your purchase. What made you decide to purchase from one site over another? The chances are also very good that the site that you purchased from had something to offer that the other site did not. It was, in some way, different, even if the product was exactly the same.

Most of us spent our whole lives trying to fit in. We didn’t want to stand out from the crowd. We wanted to look like our friends, to dress like our friends, to do the things that our friends did, and of course to be just like our friends. Being called ‘different’ was a horrible thing and the most feared nightmare of teenagers everywhere.

Unfortunately, we carried that desire to be just like everyone else with us into our adult lives. We strive to have homes and yards that are comparable to our friends and neighbors. We buy the latest fashions so that we look like everyone else. We get our hair styled like our friends. The list goes on and on.

We are programmed, from young ages, to be just like everyone else, and when we carry that notion into our adult lives, we also carry it right into business with us. When you are trying to improve your conversions, however, you’d best dare to be different.

This also relates to the USP or Unique Selling Position that you will hear so much about in Internet Marketing circles. Your USP is what sets you apart from the competition. What is it that makes your service or product different from someone else’s? If you are selling the same product as someone else, why should a customer purchase the product from you, instead of from someone else selling the same product?

You absolutely must be different if you want to have success, and you want to improve your conversion rate. So, what are some ways that you can be different? You might think that changing the appearance of your site makes you different…and in a sense it does, but it won’t make enough of a difference to improve conversions.

Many marketers set themselves apart by offering bonus gifts for customers who make purchases, with additional bonus gifts available to those who make purchases in a certain period of time. Some people think bonus gifts have become over-rated, but they really haven’t.

When you are selling a product that is identical to a product that someone else is selling, bonus gifts is one of the easiest, fastest, and in some cases, the only way to set yourself apart from your competitors. Offering these bonus gifts can be the difference between making the sale, and losing the sale.

Furthermore, the way that you present those bonus gifts makes a difference as well. If two sites offer the same product and the same bonus gifts, but one site uses graphical covers to present the bonus gifts, while the other site just uses text, without covers to depict those gifts, the site that used the covers will most likely get the sale.

If both sites went with the text-only option, and one site described the bonus products, and the other site simply put the names of the products, without any description, the one with the descriptions will most likely get the sale.

If your product is identical to the product that others are selling, as is often the case with product launches that Internet Marketers are so famous for, your bonus gifts should absolutely be unique. Bonus gifts don’t even have to download. It could be something like free admission to a teleseminar that you are hosting, an hour or two of consultation with you, or a free subscription to a subscription-based website that you own.

As mentioned earlier, the look of your site also matters. While it doesn’t always make a great deal of difference in your conversion rate, there are instances where the look and feel of your site actually can mean the difference between making a sale and losing a sale.

In most cases, if you have anything on your site that may be construed as irritating to visitors, they may surf away. This includes blinding or blinking text, graphics that load too slowly, and audio or video that cannot be stopped by the user. Music is never appreciated on business sites. So, while you note that most sites do not do these things, these are not areas where you want to be different. In this instance, not being different at all is a better thing.

Being different – in a good way – means adding value to the original product that nobody else is adding, and even better, the value that nobody else is even capable of adding.

It could also mean offering outstanding or superior customer service, faster delivery times, offering payment options that others don’t offer, and of course offering bonuses that others cannot offer.

So, you must put your fears of being different behind you, and learn to embrace being different. If you want to improve your conversions, take a look at your site, and then go look at your competitor’s sites. How can you set yourself apart from those competitors?

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