Conversion rate (CVR) is simply the closing rate. CVR is a metric that can be used not only on websites and the Internet, but also in physical stores. However, many people may not know how to calculate CVR or how to improve it.
In this article, we will provide an overview of CVR and explain why it is important. We will also introduce the causes of low (bad) CVR and specific ways to improve it, so please refer to it.
What is conversion rate (CVR)?
First, let me explain what conversion rate (CVR) is. CVR stands for closing rate. It is also sometimes referred to as the “CV rate”.
CVR indicates how many people made inquiries out of the users who visited your website. For example, if your website’s goal is to request and download materials, if 100 people visit and 5 downloads occur, your CVR will be 5%.
CVR is an indicator that is directly linked to sales, such as the number of inquiries and requests for materials. In other words, if CVR is good, sales will continue to grow. On the other hand, if your CVR is poor, it means that you are losing out on visitors.
If the current number of accesses is high but sales are not increasing, there is no doubt that CVR is a major cause. Also, it is easier to analyze and improve CVR if the current number of accesses is large.
This is because the more accesses there are, the more data is accumulated, making it easier to identify the cause. Let’s improve CVR and maximize sales and inquiries.
Conversion rate (CVR) calculation formula
The conversion rate (CVR) can be calculated using the following formula: Number of inquiries ÷ Number of visitors x 100%. For example, if 10,000 users visit per month and 20 conversions occur, the CVR will be 0.2% (20 ÷ 10,000 x 100%).
However, CVR varies depending on the prerequisite conditions. For example, in the example above, the number of visitors is a prerequisite, but depending on the website, there may be cases where the “button click rate” is a prerequisite.
So, if you get 2,000 button clicks per month and 20 inquiries, your CVR is 1%. In other words, CVR also changes depending on the prerequisites for issuing CVR. Basically, it is a good idea to make improvements based on the easy-to-improve “number of inquiries,” “number of downloaded materials,” and “calls.”
What is the standard for conversion rate (CVR)?
In conclusion, there is no guideline for conversion rate (CVR). This is because CVR changes depending on the industry and business type, and also changes depending on market sentiment and trends at the time.
If you want to set a target CVR when improving CVR, we recommend calculating backwards from sales. For example, let’s say you want to generate 10 million yen in monthly sales from your website, and your average sales per customer is 1 million yen. In this case, it would be good to get 10 CVRs per month.
Analyze the current number of accesses and CVR, and if the CVR is not one that can get 10 hits per month, calculate backwards to find a CVR that can get 10 hits per month.
Importance of conversion rate (CVR)
So far, we have provided an overview of conversion rate (CVR). From here, I will explain two points about the importance of CVR.
Let’s look at each in turn.
Directly linked to sales
As explained in this article, CVR is directly linked to sales. In extreme terms, even if you get 1 million PV per month, if your CVR is 0%, your sales will be 0 yen. However, even if you only have 100 PV per month, if your CVR is 1%, you can get 1 inquiry per month.
Sales will increase just by improving CVR, so if you want to increase sales, improving CVR will increase the possibility of positive results.
Identify areas for improvement based on CVR
By focusing on CVR, you can identify other areas for improvement. For example, if there are two pages that lead to CV, page B has a higher CVR than page A. In this case, we can see that page A has some cause that is inhibiting CV.
For example, it may have a worse design than page B, or it may lack the information customers need. In this way, you can identify other improvements based on CVR, so always set CVR as one of your KPIs.
What causes low conversion rate (CVR)?
The reasons for a low conversion rate (CVR) vary depending on the industry and type of business, and also vary depending on each website. The following are some common possible causes:
Let’s look at each in turn.
Conductor wiring not designed properly
The first possibility is that the conductor has not been properly designed. You need to think about the background of the users visiting your website and design a route that matches that.
For example, if a user wants to know the price but there is no
link
(transition) to the price page, that alone creates an opportunity loss. In this way, if the conductor is not designed to suit the user, it will cause problems with CVR.
Not being able to appeal appropriately to the target
Another reason is that we are not able to appeal to our target audience appropriately. For example, even though a user is luxury-oriented and thinks it’s okay to pay a high price, if you tell them that your product is a low-priced product, the user may lose track of what they’re looking for and end up leaving the market. Masu.
Please reconsider who your company’s target is and check whether you are appealing to them appropriately.
trends are changing
It is often possible that
the web marketing
that your company is doing and the trends are changing. For example, if we take
e-mail newsletters
as an example, it is certainly a method that can be highly effective even today. However, on the other hand,
marketing
using LINE is also starting to be widely used.
In this case, directing users to LINE may increase CVR. However, if your company only uses e-mail newsletters, your CVR will naturally be poor. Do a comprehensive analysis of what the current trends are and what trends your target audience is looking for.
A competitor is running a campaign
Next, one of the reasons for poor CVR is that competitors are running campaigns. In reality, many users are concerned about the price. Therefore, if a competitor offers a similar service at a lower price, there is a high possibility that users will go to the competitor.
In this case, you need to consider the profit margin and launch a campaign that is competitive with the competition, or you need to increase inflow routes other than campaigns.
How to improve conversion rate (CVR)
There are two main ways to improve conversion rate (CVR):
Let’s look at each in turn.
Appropriate appeal to target
First, it is important to appeal appropriately to your target audience. First, analyze the background of your target audience and what kind of products and information they are looking for. Then, make sure to appeal accordingly.
In order to analyze these, it is also important to analyze what route users are coming from. For example, if your traffic comes from both Twitter and YouTube, there will likely be less information being conveyed to your target audience on Twitter. On YouTube, on the other hand, users watch long videos and already know a certain amount of information, so the content that appeals to both parties should be different. After analyzing these inflow routes, consider what kind of appeals will be effective to your target.
Also, if the number of inflows is fundamentally low, improving the number of inflows is more likely to increase the CV number than CVR, so it is important not to mistake the order of improvement.
Perform LPO
Next, it is also important to perform LPO.
LPO
stands for Landing Page Optimization. I think LP is mainly used when using Internet advertising, but there is a high possibility that CVR will improve by using LPO.
When conducting LPO, we recommend using a
heat map
tool. By using the heat map tool, you can analyze the areas that users are reading closely and the areas that have a high click rate (number of clicks). By analyzing these, you will be able to understand why those areas are being read and clicked on, so you can repurpose them into other areas.
summary
In this article, we have explained about conversion rate (CVR). CVR stands for closing rate and is an important indicator that is directly linked to website sales and number of inquiries. In addition, by analyzing CVR, you can find other areas for improvement, so it can be said to be the most important indicator when running a website.
If your CVR is bad, you may not be appealing to your target appropriately, or your competition may be running a campaign. Why not analyze these first and then try to improve your company’s CVR?