Conversion Rate Optimization Basics

Conversion Rate Optimization (CRO) refers to processes and techniques that improve your website’s effectiveness for increasing sales from your website’s current visitors.  CRO utilizes analytical tools to track and identify the percentage of people who visit your website and then perform a specific action, such as filling out a form to request more information, signing up for a newsletter, or calling your business directly.  The basics of conversion rate optimization aren’t particularly difficult, but knowing the lingo makes it much easier to understand.  So let’s get you started with a checklist of definitions of the most important terms for conversion rate optimization.

Definitions of a Few Basic Terms For Conversion Rate Optimization

What is a Call to Action?

A Call to Action, also known as a CTA, is a clickable image or piece of text that encourages your visitors to take a specific action.  It is quite literally a “call” to your online visitors to perform a specific “action”.  CTA “buttons” are a popular image based method for utilizing the call to action function.  Some examples of these types of buttons might include a “Get This Free Offering Now”, “Contact Us”, and “Call Us Now”, just to name a few.

The most important aspect of a CTA is its design.  It needs to be easily noticeable and recognizable as a call to action if you want people to actually click on it.  You can use colors that contrast from your webpage and clear action verbs so that people know what to expect when they click the button.  For instance, if you have a CTA that says “Download Our Free Ebook”, it’s quite clear that if you click the button, you can download a free ebook.

What is a Conversion Funnel?

A conversion funnel, which is also known as a sales funnel, refers the process through which you guide a prospective customer (or lead) to take specific actions that get them to travel through the sales cycle from initial contact all the way to the final sale.  Basically, you’re using a systematic approach to convert your leads into sales, transitioning your prospective customers into buying customers.

One of the benefits of a well-constructed conversion funnel is that a lead can be converted at any point in the funnel.  First and foremost, you need to decide the goal of your conversion funnel.  Yes, your ultimate goal is to convert leads into sales.  However, how you specifically plan to do that is the really important part.  More often than not, website visitors aren’t yet ready to buy.  You need to nurture them, encourage them to buy from you.  Part of this lead nurturing means that your approach gets more specific as prospective customers move through the funnel.  You’ll have more leads at the top of the funnel.  As those leads move through the funnel, some of them will drop off.  That means that you’ll have fewer leads at the end of the process than you did at the beginning.  This is why marketers call it a funnel.

What is Split Testing?

Split testing, also known as A/B testing, is a method of comparing two webpages to see which one performs better.  Ideally, the pages are nearly identical.  However, the two pages have one primary difference.  This difference tells you exactly what is performing better between the two pages.  Basically, you’re just testing two variations of the same information.

Here’s an example.  Page 1 has written content with CTAs.  Page 2 has the same written content, but it has a contact form instead of CTAs.  You use both at the same time, meaning that 50% of your visitors are seeing Page 1, and 50% are seeing Page 2.  Now, you can track which page is getting more conversions.  Are more visitors clicking a CTA, or are more of them filling out the form?  Once you identify which variation works better, you can start using just that variation.

Definitions of Analytical Terms For Conversion Rate Optimization

Now that you know the basic terms for conversion rate optimization, you’re ready to learn the numbers side of CRO.  Ultimately, CRO is all about the statistics.  In order to measure these statistics, you need to use a tool like Google Analytics.  Analytical tools collect, track and measure your website data for you.  With that being said, it still helps to know how to interpret the statistics.  That means you need to understand the terms that analytical tools are using.  Let’s take a look at those.

What are Total Conversions?

First, you define what specific action you’re counting as a conversion.  Maybe a conversion is someone who actually purchases your product or service.  Maybe a conversion is someone who signs up for a free offer or a newsletter.  What your definition of a conversion is doesn’t matter as much as setting a clear idea of what you consider a conversion to be.  Once you’ve defined a conversion, you can evaluate your total conversions, the number of people that took the specific action that makes them a conversion.

What is a Conversion Rate?

The conversion rate refers to how many conversions you’re getting out of all of the visitors to your website.  You calculate the conversion rate, you simply divide the number of total conversions by the number of all the visitors to your website.  Once you have that number, you multiply it by 100.  That gives you the conversion rate.

Let’s do a little math to illustrate how this actually works.  Your goal is for leads to sign up for your email newsletter.  Everyone who signs up for the newsletter is considered a conversion.  9,000 people visit your website.  Of those visitors, 2,700 sign up for your newsletter.  That means that you have a 30% conversion rate. Here it is in numerical form.



Make sense?

What is a Bounce Rate?

The bounce rate is pretty basic.  This measures the percentage of website visitors who nearly immediately leave the website after only looking at a single page.  So to calculate the bounce rate of your website you divide the number of visitors who very quickly leave your site after only looking at one page by the total number of website visitors.  Then you multiply that number by 100 to get your bounce rate.

For example, your site has 1000 visitors.  800 of those visitors leave your site almost immediately.  You divide 800 by 1000, which equals 0.8.  Then you multiply 0.8 by 100, which equals 80, meaning that your bounce rate is 80%. Here it is in numerical form.



A high bounce rate indicates a big problem.  There are a lot of reasons that people might be bouncing from your website.  Maybe your website doesn’t have the information that your visitors are looking for.  Perhaps your website isn’t easy to navigate.  Or your website is possibly so poorly designed that it looks like a fake business.  Whatever the reason, you need to figure out why your website has a high bounce rate, then you need to work to change it.  The longer a person stays on your website, the more likely they are to convert into a sale.

What is an Exit Rate?

The exit rate is similar to the bounce rate.  It’s just more specific.  While the bounce rate is based on the whole website, the exit rate is specifically for each page of the website.  So each website page has its own exit rate.

The exit rate is the percentage of visitors who leave after looking at the page.  The exit rate tells you the last page that a user views before leaving the website.  If a specific page has a particularly high exit rate, then it probably means that there is something wrong with that page.

Let’s look at an example.  Let’s say that 500 people look at your Contact Us page, which has a form that they fill out to contact you.  250 of those people leave the page without filling out the form.  You then divide the number of people who leave by the number of total people who looked at the page, then you multiply that number by 100.  250 divided by 500 equals 0.5, which means you have an exit rate of 50%. Here’s numerical version.



What is Average Site Time?

Average site time is the general amount of time that visitors are staying on your website.  A high bounce rate means that you have a low average site time.  That basically means that people aren’t staying on your website long enough to take the action that moves them into your conversion funnel.

What are Average Page Views?

Average page views is similar to average site time.  It measures how many different pages of your website a visitor views before leaving the website.  If you’re getting a lot of conversions, then more page views can mean that you have a strong and informative website.  However, if you have a high number of page views and a low conversion rate, this might mean that your website is confusing, and visitors can’t find the information that they want.

Hopefully, this beginner’s guide to conversion rate optimization can get you started as you look to implement a CRO strategy for your digital marketing efforts.  Conversion rate optimization can definitely be more complicated than other aspects of a digital marketing strategy.  Given the intricacies of CRO, you may want to consider hiring a conversion rate optimization agency to provide CRO services for your business.