Calculate CONVERSION RATE Marketing Metric (Quick WIN!)
Are you frustrated because you know, you need to track performance of your marketing efforts, but have no idea where to even start or what you're looking for?
By the end of this video, you will know all about how to calculate the conversion rate metric. One of the most common and important metrics that marketers use to measure performance. You'll learn why you want to measure it and how to measure and apply it to your marketing efforts for the best entrepreneurship business strategy and systems advice.
if you're like most entrepreneurs, you want to make sure that your business is getting the best return on investment on the money and effort that you are putting into your marketing. So you can make data driven decisions that will scale and grow your business.
But if just the thought of numbers and metrics makes you want to run in the other direction, you are not alone.
For over a decade. I've made it my mission to help entrepreneurs understand their numbers and use metrics to make smarter decisions as they guide their business. And if you're ready to finally stop kicking the can down the road and take the first step towards making smarter decisions more confidently, this video is for you today.
We are going to talk about one of the most important metrics when it comes to measuring your marketing performance, how to calculate conversion rate.
If you are marketing or selling a product, you may have heard this term before. And if you're one of those entrepreneurs who has thus far stayed as far away out of your metrics as possible out of fear or frustration, conversion rate might sound like Greek to you, but don't worry. I've got you just stick with me.
As marketers, when we say convert, we're talking about how many people actually do the thing that we want them to do. So if the desired action is to make a sale, when someone fills in their credit card information and hits that purchase button, that means that they converted and the conversion rate is the frequency or regularity at which people take that specific desired action in your online universe. I'll teach you the specifics about how to calculate it in just a bit.
But first I want to explain WHY measuring conversion rate is important.
Conversion rate measures the efficiency of your marketing efforts with marketing. You are actively trying to entice people to take the next step or next action in their customer journey with you. And the conversion rate helps you diagnose just how seamless you make it for your target audience to take that next step with you.
If you get people to take that step with a higher frequency than before, you're getting more bang for your marketing buck and a much higher ROI on your marketing investment. The higher your conversion rate is the easier you've made it for your lead, your target audience, to take that desired action with you. The higher your conversion rate, the more efficient your marketing is. And the more efficient your marketing is, the more you can scale your time and money. And the more sales you can ultimately make.
Maybe you already knew what conversion rate meant in theory, but you still find it confusing as heck.
When other talk about it and are frustrated when you're trying to apply it into your business, I'm going to let you in on a little secret that's helped. Many of my clients understand the foreign language of this metric so they can ask better questions about their data.
While conversion rate is one metric and name, it can actually be applied at many different places in the customer journey.
This means that your customer journey will have multiple conversion rates. You can and should calculate conversion rate any place. There's a major action that you want your lead to take.
Just as important as the conversion rate metric is that you are measuring the context of what point in the customer journey you are looking at is equally as important. What can get confusing and frustrating and lost in translation quickly is when people aren't specific enough about which conversion point they're measuring the efficiency of.
Was it the lead magnet opt-in conversion rate? The webinar registration conversion rate? A sales page conversion rate,?the more specific and contextual you are, the easier it will be to measure, understand and analyze the results of that performance metric.
Comment below and let me know, how are you using the conversion rate metric in your business currently? And if you're not using it, don't be embarrassed. This is a very safe space, just comment below. And let me know the first place that you'll be measuring your marketing efficiency using conversion rate after you've watched this video.
Now I'm going to teach you how to calculate this metric on your own. First in theory, then we'll run through a few specific examples.
As I mentioned, conversion rate measures, the frequency or efficiency of your target audience, taking a specific desired action to progress in their customer journey with you. So the calculation is simple.
It's the number of people who took that desired action divided by the universe of people who had the opportunity to take that desired action with you within a specific amount of time. That specific amount of time depends on the business and the action, but it's usually measured week by week or month by month.
Now let's go through a few specific examples.
If we're talking about the conversion rate of an ad that has a goal of getting people to visit your website:
That calculation would be the number of people who clicked through on the ad to your website. Also known as link clicks, divided by the total number of people who saw your ad in that same period, whether they took action on or not. This is also known as ad impressions.
If we're looking at the success of a webinar in regard to making sales:
Conversion rate is calculated as the total number of people who made a purchase as a result of the webinar, divided by the people who attended that webinar either live or in a replay.
And for our last example, let's look at how to calculate the conversion rate of a specific page, like a lead magnet opt in page or a sales page.
We'd calculate that conversion rate by dividing the number of people who took the desired action on the page either gave you their email address or clicked purchase divided by the total number of people who landed on that page in the first place.
If you look at any of those examples above, you can see that the more people who take that desired action in the universe of people who had that opportunity to take that action, the higher your conversion rate calculation will be.
And the higher your conversion rate calculation is the more efficient that part of your marketing funnel is the more efficient each stages. The more people will become customers. The higher your revenue will be, and the more your business will grow.
If you're ready to face your fear of numbers. So you can scale your business in smarter and more efficient ways. I've got something just for you.
And if you liked this video, make sure to hit that like button and don't forget to subscribe to this channel. Share this video with your friends and comment below, and let me know what your biggest aha takeaway was from this video.
And if you're ready to take your business and marketing to the next level, using metrics and systems, make sure to check out these related videos on my channel, cheers friend, to your business success.
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