You launch a new image-driven digital ad campaign to replace your existing text-heavy campaign. The clicks are rolling in and customers are purchasing your products. But is it performing better than your old ads?
By calculating the sales conversion rates of each campaign, you can learn which one attracted more paying customers, helping you gauge the success of your marketing efforts. Learn how to calculate your sales conversion rate as well as what strategies you can implement to increase conversions.
What is a sales conversion rate?
A sales conversion rate shows the number of leads that turn into paying customers. You can use sales conversion rates to evaluate the effectiveness of your marketing campaigns and sales strategies. The results can inform your future strategies for converting leads. For ecommerce, a good sales conversion rate falls between 2.5% and 3%.
How to calculate a sales conversion rate
To calculate sales conversion rate, divide the total number of conversions by the number of leads. Then multiply the result by 100 to find the percentage rate. Here’s the sales conversion rate formula:
(Total number of conversions / total number of leads) x 100 = sales conversion rate
For example, to calculate the sales conversion rate of an email marketing campaign for a product launch, start by identifying the total number of successful conversions and the total number of qualified leads (someone who has shown some level of interest in your product). If the campaign generated 300 total leads and 15 successful sales for your new product, you could calculate your sales conversion rate like this:
(15 conversions / 300 leads) x 100 = 5% sales conversion rate
How to improve your sales conversion rate
- Define clear conversion goals
- Use various marketing channels
- Evaluate your sales funnel
- Write engaging calls to action
- Enhance your lead generation process
- Use social proof
- Optimize your checkout flow
Here are a few strategies to help you improve your sales conversion rate:
Define clear conversion goals
You can use past historical performance of your marketing campaigns to define your new goal. For example, if your earlier campaigns have hovered around a conversion rate of 1.5%, you can set a new goal of reaching 3% within 12 months.
It can be helpful to research your target market and identify whether you want to garner more sales from new customers or focus on customer retention as you set your goals.
Use various marketing channels
Launch campaigns across marketing channels. By diversifying how you market your products and services, you can gain better insights into which channels are most effective.
For example, you could launch an email marketing campaign, an affiliate marketing partnership, and a pay-per-click ad campaign. If your sales conversion metric shows certain channels performing better than others, consider prioritizing those channels.
Evaluate your sales funnel
A sales funnel is a visualization of the buyer's journey—from becoming aware of a product or service to purchasing it.
The top of the funnel is the beginning of the sales process with potential customers first encountering an advertisement, piece of content, or website. The middle of the funnel involves prospects learning about the features and benefits of what you’re selling and becoming more interested until finally making a sales conversion at the bottom of the funnel.
By analyzing every step of the sales funnel, you can identify areas that need improvement. For example, you might learn you have high bounce rates, with visitors leaving your website after a single page view. This can signal a problem with the middle of your sales funnel, like slow loading times or a confusing layout. Analyzing every part of your funnel can help you remedy problems and convert more leads.
Write engaging calls to action
A call to action (CTA) is a text prompt that can inspire a visitor to take a certain action. CTAs play a critical role in increasing your sales conversion rates because they provide potential customers with a clear path toward your conversion goals. For example, you could launch a paid ad campaign offering free trials of a subscription service to new customers with CTA copy like “Sign up for free.”
Use exciting action verbs and attention-grabbing design elements for your CTAs. Highlight the benefits of what you’re selling. For example, you can say “Save 10 hours a week” for an automation tool. When possible, create a sense of urgency with limited-time promotions like flash sales or countdown timers.
Enhance your lead generation process
Lead generation lets you identify prospective customers and move them toward conversion. Ecommerce merchants can implement several lead generation strategies, including lead magnets (providing a free resource, like an ebook, in exchange for a customer’s email) and referral programs (rewarding customers who refer you to their network).
Once you’ve generated leads, use demographic data and user behavior to rank qualified leads with the highest chance of converting. Lead prioritization can save your sales team time.
Use social proof
Social proof describes the psychological phenomenon of people making decisions based on the experiences of others. For ecommerce, social proof can become a valuable sales strategy for increasing conversions. For example, you could feature positive customer reviews on sales landing pages to improve your brand perception and increase your sales conversion rate.
Optimize your checkout flow
Optimizing your checkout flow makes it easy for customers to purchase products or services on your ecommerce site. Provide accurate shipping costs upfront, include any relevant security certifications, and minimize the number of form fields customers must fill out.
Allow quick guest checkout for customers who don’t want to make an account on your website and ensure the checkout process runs smoothly on mobile devices. Offer multiple payment options to avoid losing sales from customers using specific payment methods like digital wallets. Reliable ecommerce platforms like Shopify offer integrated payment gateways that make it safe and easy to set up an optimized checkout flow on your ecommerce store.
Sales conversion rate FAQ
What is a good conversion rate for sales?
According to industry leaders, an average conversion rate typically falls between 2.5% and 3%. However, sales conversion rates vary based on your specific industry, target audience, company, and products or services.
How do you calculate sales conversion rate?
Calculate sales conversion rate by dividing the total number of successful conversions by the total number of qualified leads. Multiply the result by 100 to find a percentage rate.
What is an example of a conversion rate?
An example of a conversion rate would be if you launched a pay-per-click advertising campaign for a new product that 200 prospects clicked on and 20 people purchased. In this example, your sales conversion rate would be 10%.
Why is it important to track your sales conversion rates?
It’s important to track your sales conversion rates because they indicate how well your marketing campaigns are working and provide insights into how to optimize your sales funnel to maximize profit and earn a higher return on investment (ROI).
How often should you calculate sales conversion rate?
You should calculate your sales conversion rate every time you run a new marketing campaign or make a change to your sales process. But to get a clearer picture of your campaigns, calculate your sales conversion rates at least every month.
Who uses sales conversion rates?
Sales conversion rates are important metrics for ecommerce entrepreneurs, sales and marketing teams, and anyone launching a digital marketing campaign with the goal of inspiring viewers to take a specific action.
