Is My Website Converting Leads? How to Calculate Conversion Rate
While identifying leads and driving them to your website is important, getting more visitors to your page is only half the battle. Check out this guide to learn how to calculate conversion rate and determine if your website is converting.
Are you wasting money? Would you know if you were?
To run a successful business, you need to know if you’re spending your marketing budget efficiently.
One way to do that is to look at Ad spend vs conversion rate. Is the money you’re spending on Ads worth the profit you get back?
You can only determine that if you know your conversion rate. Get our guide on how to calculate conversion rate below!
Why is it Important?
What does your visitor number per month have to do with sales? Is getting more eyes on your page getting money in your pocket or are you spending on the wrong potential customers?
That’s what calculating your conversion rate can tell you. There’s no point in paying for Google to advertise to more people if they’re not the right people who will buy your product.
Measuring your traffic without understanding how that applies to sales gives you a false understanding of success.
For example, let us say you have 5,000 visitors a day. You feel like that’s good and you make about 50 sales a day.
However, that’s a conversion rate of 1%. What would happen if you changed where you sent your advertising money to match that one percent?
Your conversion rate could double or even triple. That’s the difference between fifty sales a day and 150. Just from changing who you advertise to!
Another way to look at your conversion rate is to cut the non-buyers altogether. If your conversion rate is 1% of 5000 visitors, you’re only getting 50 eyes that matter on your page per day.
Is that worth it? Do your profits cover what you’re spending on marketing to those 50 people? We’ll get more into the details below.
Step 1: Decide What to Measure
When someone visits your website, what actions do you want them to take? What are you hoping they do?
If you’re not internet-sales based, this could be something like downloading a free file or signing up for an email list.
If you are sales based, do you want them to browse products or buy one specific one?
Other examples of action items or conversions include:
- Checking Out
- Buying a service
- Booking an appointment
- Putting something in a cart
- Signing up for a free trial
The way you know what to measure? By deciding what’s important to you. Yes, you can pick multiple events that you want to calculate the conversion rate for.
But slow down, we’ll get to that in our next step.
Step 2: Google Analytics Calculation
Using your Google Adwords account isn’t the only way to track your conversion rates, but it’s the one we’ll start with.
To start out, go to a page you already frequent: your Google Analytics account.
With your action item (event from above) in mind, you’ll need to set up a goal.
Use Google’s walkthrough guide or their official tutorial on how to set up a goal here, for the technical instructions.
Once you’re on the right page, you need to decide what type of goal your event is that you’re tracking.
You have a few choices. URL destination goals are when a client visits a certain page. This could be your “thank you for booking an appointment” page or an order confirmation URL.
You’re telling Google that your client getting to that page equals a conversion.
The idea with URL destination goals is that someone can only reach the page when they’ve taken the action you want to track. If other customers who haven’t taken the action can get to it, it’ll skew your data.
Another choice that Google gives you is tracking duration on certain pages. Do you offer a free webinar?
Maybe it’s 15 minutes long and you set up your goal so they’re on that page for 14 minutes.
You can give Google a URL and a timer, essentially, which will track how long someone stays on a page.
Then a conversion will “count” when they stay on your page for your desired amount of time.
An event goal is similar to a URL goal, but it’s a different format. Instead of counting a conversion as reaching a certain page, you count it as an action.
For example, the event could be placing something in their cart, even if they didn’t check out. The action would equal clicking “add to cart” or “buy”.
You can set up language differences and define your events on the Google Goal set up page.
Pages Visited Goals
If you haven’t noticed by now, there are two main types of Google conversion goals. Engagement and Reach.
Engagement goals are when your clients interact with your site, while reach measures things like time spent on a page.
The last type of reach goal determines the number of pages visited. Let’s say you’re trying to decrease your bounce rate, so you set up some new and interesting pages on your website.
You set up the pages to lead to another, then another.
You can tell Google to track how many pages one user visits per session. That’s what “page visited goals” are.
Step 3: Now We Wait
Once you set up your events, you need to wait for people to take actions. There can’t be a conversion rate calculation without any actual conversions.
You’ll want to do an initial check to see that your conversion events are working but then leave the events alone. You can set up Google Analytics to ignore data from your IP address, but that’s another article.
The Final Step of How to Calculate Conversion Rate
Once you’ve let your conversion events run for about a month uninterrupted, you can check your rates against your traffic.
Use your Google Analytics account and read the numbers and statistics they give you. That’s it – that’s your conversion rate!
Now you can calculate if what you’re spending matches how much you’re making and adjust accordingly.
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