In the world of UX and web analytics, the conversion rate stands out as a critical metric. It reflects the percentage of users who complete a desired action, providing valuable insights into the effectiveness of your website's design and user experience. According to Nielsen Norman Group, increased conversion is one of the strongest return on investment (ROI) arguments for better user experience and more user research.
The conversion rate is the percentage of users who take a desired action. For example, if an e-commerce site receives 100,000 visitors in a month and 2,000 make a purchase, the conversion rate is 2%.
Key Considerations:
While primarily discussed in the context of websites, conversion rates can be applied to intranets, mobile apps, and enterprise applications.
A conversion event extends beyond sales. It encompasses any Key Performance Indicator (KPI) that aligns with your business objectives. Examples include:
Even smaller actions, known as micro-conversions, such as clicking a link, watching a video, or scrolling below the page fold, can indicate user engagement.
Tracking conversion rates helps manage UX design and assess the effectiveness of your UX efforts over time.
While conversion rates are generally favored, absolute counts can be more useful when traffic quality varies. A surge in traffic from a source unrelated to your target audience can skew conversion rates. In such cases, focus on the absolute number of conversion events to gauge true performance.
For example, Nielsen Norman Group once published an article about usability for cats, and their website traffic quadrupled. However, sales remained constant, causing the conversion rate to plummet. This was due to a large influx of visitors who were not part of the target audience.
Choose a measurement period that balances responsiveness and stability.
For most cases, a month is a good period for measuring the baseline user count and the number of conversion events. For low-volume sites, ensure statistical significance to avoid misleading results.
There is no universal "good" conversion rate. A good conversion rate is one that improves over previous performance. Several factors outside UX influence conversion rates:
Conversion rates typically range from 1% to 10%, while success rates in usability studies often reach around 80%. This difference arises because usability studies measure task feasibility, not purchasing intent. A high success rate indicates that users can use the site effectively, but doesn't guarantee they will become customers.
For example, a site with a 4% conversion rate and 80% usability success rate could potentially increase its conversion rate to 5% by addressing usability issues.
The goal is to optimize, not maximize, conversion rates. Maximizing can be costly and inefficient. For instance, lowering prices can increase sales volume, but may reduce overall revenue if customers have low price elasticity.
Tracking conversion rates and aligning them with design changes is essential to justify UX investment. Design significantly impacts conversion, and even small changes can yield substantial results. Simplifying registration forms, for example, can significantly increase completion rates.
For example, consider an original registration form that has a conversion rate of 10%. By removing one question, the conversion rate increases to 11%. If 100,000 users access the form annually, removing the question leads to 1,000 additional completions. If each completion yields $20 in business value, that extra question costs the company $20,000 per year.
By understanding and optimizing conversion rates, businesses can significantly enhance user experience and drive business growth.
