Understanding Conversion Rates

By November 10, 2014Insight, Startups, Website

Conversion rate is a discussion I have with my startup clients on a regular basis.  It’s the rate at which a customer/user performs an activity you want them to perform.  It is often a telltale sign to answering whether or not what you’re offering is what customers are interested in using/buying.

Conversion rate can be deceiving if you’re measuring only part of the whole picture so let’s take a look at an example.


A potential customer comes to your site and they like what they’re seeing.  You have a big ‘Sign Up Now and Change Your Life‘ button front and center.  The potential customer clicks the button.  They arrive at the Sign Up page, but they never complete it.  Were you able to know this happened?

Know Your Conversions

Measure conversions all along the way.  You should measure the initial button click, sign-up completion and all activities in-between and after.

The initial click of the ‘Sign Up’ button will tell you whether or not customers buy into your messaging.  If this conversion is low, it likely means that your message isn’t clear or you’re catering to the wrong customer group.

The sign-up completion measurement will tell you whether or not your sign-up process is effective/easy.  Drop offs at this stage will likely mean it’s too much information or too confusing.  Additionally, it could mean that the customer hasn’t fully been sold on the idea.

The Most Important Conversion Rate

One could argue that all conversions are important; however, I feel that the most important conversion is when you secure a customer.  Securing a customer can mean they are paying for your product/service, you’re getting their contact information, they’re making a donation and/or using your product/service.

It’s up to you to define what the most important conversion event is and ensuring that you get the conversion rate as high as possible.  For many, the most important conversion rate is measured on the ‘Submit Payment’ event.

Questions to ask Yourself

What are the conversion rates I am monitoring?   Are they high enough?

Am I monitoring all of the conversions I need to be?

How can I improve my conversion rates?

How to Improve Your Conversion Rates

The advice I give is to test, test, test.  Try different messages, different pricing structures, etc.  The best thing to remember is to try variations and measure the conversion rates.  See which one has the best conversion rate, stop doing the things that don’t work and put all of your effort/money into the things that do.   This process is called A/B testing, although I like to think of it as A/B/C/D… testing.

Neil Patel’s article 7 Tips to Improve Your Site’s Conversion Rate — Fast is a great set of tips on how to get more customers, faster.  It’s a much better and more eloquent version of my short answer.  Definitely check it out.