Conversion Rate (CR)
ConversionRate (CR) comes into action especially when talking about performance marketing campaigns, even though it can be employed in other digital marketing contexts as well. Basically, it represents the number of users completing a specific task you desired them to complete over the total number of potential users who could complete such task.
It is the most important factor determining the goodness of a performance marketing campaign, along with the Cost per Lead (CPL). These two factors combined determine the Customer Acquisition Cost (CAC).
Here you can find a collection of fine investigations on the topic.
Back tobasics, what is the conversion rate?
Think about a Facebook Sponsored as, hence a sponsored content bumping on Facebook users’ walls because you’re paying for it to be displayed in front of a targeted audience.
The Facebook users clicking on the sponsored content typically land on a specific page of your website, where you try to convert them to complete a task, like buying a product or downloading a specific resource.
The number of users completing the desired (by you) action, over the total number of users who could potentially complete it is called the Conversion Rate (CR).
The highest the conversion rate and the most performing is, of course, the marketing campaign. The lower the conversion rate and the more your effort to have target users complete a desired action was vain.
The CR concept applies to a broad range of contexts in digital marketing, it is not necessary related to performance campaigns. For example, it can also refer to the whole traffic from Facebook, driven by organic user activities. It can also apply to email marketing, regarding the conversion of a specific list of contacts towards completing a goal.
These are the basics to be all on the same page when it comes to talk about conversion rate.
From the basics, a bit theoretical, and the practice there’s a huge gap to fill, because users’ decision-making process is complex and develops along multiple touch points. For this reason, computing the conversion rate can be very, very tricky. As tricky that you should evaluate whether the effort to retrieve it is worth the spend and be aware that, in many cases, you would get a anyway pretty dirty value.