Here’s one of the biggest lessons I have learned in my entire web marketing career : Nothing matters more than conversion rate. Why is conversion rate so important? Simply put, it separates marketing programs with a high return on investment, from those with a low return on investment (or, ones that lose money). Conversion rate is most easily defined as the percentage of website visitors who complete a desired outcome. In our business, the conversion rate we measure is “site visits to leads”. We measure and report on how many visitors came to a website and how many converted into our desired outcome: “leads”. This measure of visit conversion rate from site visits to measured leads (both phone calls + online contact submissions) is the biggest indicator of how well an online medical marketing program is performing. In other businesses the most important conversion rate statistic might be “visits to ad clicks” (e.g., online publishing) or maybe “visits to purchase” (e.g., online retail). The higher the conversion rate, the stronger the ROI and stronger the campaign performance –this is true for all online businesses.
If return on investment for a client is low, or just needs to get better, the first place I usually look for improvement is in the conversion rate because this is where seemingly very small improvements will make the biggest difference. Incremental improvement from 5% conversion, to say 8% conversion usually yields enormous gains. Why? – Because this lift from 5% to 8% conversion is actually a 60% gain improvement in performance. For some clients a 0.5% gain from 3.75% to 4.25% is a game changer. What seems like incremental improvements can actually have an exponential effect on the bottom line.
In the lead generation side of online marketing, the majority of marketing programs have a very strong ROI at the 4% conversion rate and above level. 10% is an exceptional conversion rate (but rarely achieved). If conversion rates are under 3%, it is usually time figure out what can be done to improve conversion rate. It is interesting that a high measure of success, and in fact, an entire lead generation industry can be based on a model that has ~95% of site visits not converting. That is why focusing on conversion is always a good tactical objective because this is where the program improvement volume lies – the vast majority of site visits NEVER convert. How can you raise your conversion rate? We’ll tell you in a future blog post – it might be easier than you think!
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