Don’t get caught in the trap of thinking that a conversion rate is enough for your business to succeed.
There are a handful of metrics that most webmasters and marketers become fixated on in the pursuit of securing new business and turning a profit. Web traffic is an obvious one, but the one that gets the most emphasis is probably your conversion rate.
Your conversion rate measures any meaningful interaction that gets a customer closer to the ultimate goal of making you money, whether that’s filling out a contact form, watching a video, or just buying something directly. Obviously, this has a major impact on your overall profitability—but it’s not enough.
Here’s why:
- Conversions depend on traffic. Let’s say you’re getting a 5 percent conversion rate—that’s probably extraordinarily good (depending on your industry, of course). But what if you’re only seeing 100 visitors a month? Chances are, 5 new conversions a month aren’t going to be enough to keep your business going. You’ll need to pump up the traffic if you want to be a success.
- The quality of your conversions matter. Just because people are filling out your contact forms doesn’t mean they’re legitimately interested in what you’re selling. The quality of your leads matters.
- Profitability depends on cost and pricing. Sales aren’t enough to keep your business going, either. Obviously, your profitability depends on what you’re selling and how much you’re selling it for—if your profit margins aren’t favorable enough, even a high conversion rate can’t save you.
- Conversion rates can change. Finally, conversion rates can change over time. Just because it’s good now doesn’t mean it will remain good for the indeterminate future.
If you’re stuck with a low conversion rate, you’ll need to spend some time optimizing your site. Even if your conversion rate is respectable, you’ll need to ensure the other components of your business are in place before you start to see a profit.
