If you’re not careful, your business can easily tank.
For example, if you cooked tilapia and served it in a holding pan to your guests, you would like to know how many of your guests actually ate the tilapia fillets. If no one eats the tilapia fillets, then the fish you paid for will end up in the trash.
Every time someone brings a tilapia fillet to compensation for damage caused by a vehicle owned by the employer the table, that’s a conversion. Your customer saw and accepted the offer. Therefore, you made money on that fillet. Ideally, you want to know how many customers will order tilapia fillets so you know how many fillets to make each night without wasting money.
The same goes for a website. You need to know the ratio of people who accept your offer to the number of people who visit your website.
The best metrics to help you analyze conversion rate optimization
You can calculate your conversion rate using the sales team used materials the formula we described above, but that’s not the whole story. If you make all of your decisions based solely on conversion rate, you’re missing out on potential profits.
When you manage a restaurant business, for example, it is not enough to know how many people like the dishes you serve. You also need to know how much money each customer spends in your restaurant, how many drinks they drink, and other indicators.
The same is true for online businesses. If you want to maximize marketing list profits, you need to understand the big picture.
Customer Lifetime Value
How much does your average customer spend on average with your business during the time they work with you? This is essentially what Customer Lifetime Value is about.
If a customer buys an item worth $99 and never returns, his or her lifetime value is $99.
If the same person buys $99 worth of product every year for ten years, his customer lifetime value becomes $990.
Ideally, you want to convert high-value customers who will stay for the long term.
You also need to track the value of each visitor.
Let’s say 1,000 people visit your website in a week. 99 of them buy $30 worth of products. However, you can’t just consider these 1,000 people.
The value of each visitor is the total value of transactions during the period ($2,970) divided by the total number of site visitors (1,000). This gives a total value of $2.97 per visitor.
Conversion Rate Optimization Best Practices
Before we discuss the benefits of conversion rate optimization, let’s first discuss how to increase your conversion rate. These best practices will help you convince more people to buy your product.
Reduce form fields to increase conversion rates
Long, drawn-out forms can really kill customer motivation when it comes to conversions. Your potential customers want to take advantage of your offer, but if you make them work too hard to do so, they’ll just disappear.
There’s a simple rule to follow for lead capture pages and forms: only keep the ones that are absolutely necessary for your business. If they’re not necessary, remove them.
For example, on the Hello Bar home page, we ask visitors to fill out only one field.