Why conversion rate matters

Written by Gareth K Thomas

Not all websites are created equal. Some look better than others. But what’s really important is how well they work.

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What is conversion rate? Imagine a shop…

On a nice sunny Saturday, 100 people come into the shop throughout the day. As you would expect, not everyone buys something. But 5 people do. The shop’s conversion rate would be 5%, because 5 out of 100 people bought something.

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That’s basically how the conversion rate is calculated. But there are a few things you need to keep in mind:

  • How many shoppers didn’t buy anything on Saturday but do come back and buy something on Sunday?
  • How many shoppers were never going to buy anything (they just came to get out of the rain, or read your blog, or find your email address)?
  • How many shoppers called back a week later to buy something over the phone?

Why should I care about my conversion rate?

Lets move from our shop analogy to something a little closer to home for us in the holiday let industry.

The Sunny Spanish Villa Company let out villas for holiday-makers in, of course, sunny Spain. They have a website with a conversion rate of 2%. Their average booking value is £2,000.00. And they have 5,000 visits to their website each month.

2% of their 5,000 visitors (100 visitors) book a £2,000 stay at a village. The Sunny Spanish Villa Company take a total of £200,000 worth of bookings that month.

The following month, they make a few tweaks to the website. Change a few photos around. They make booking a little easier. Their conversion rate skyrockets… all the way to 2.3%. Not a big improvement. Or is it?

At a conversion rate of 2.3%, they now have 115 visitors booking with them. At £2,000 per visitor, their bookings that month now total £230,000 (an extra £30,000 in bookings, by going from 2% to 2.3%).

For most websites that haven’t considering optimising their conversion rate, there are usually big improvements to be made, and big gains to be won. Lets jump our conversion rate up to 3%. Our booking revenue for the month would now be £300,000.

Fixed costs tend to stay the same as you’re not increasing your visitor numbers (so no need for additional advertising costs, or admin, etc.). So one of the great benefits of improvements to conversion rate is that the additional income you achieve can go straight to the bottom line.

What affects conversion rate?

Now that we all care about our conversion rate… how do we make it jump? The answer always come back to one simple thing… testing.

Often, someone experienced at conversion rate optimisation can look at a website and make some pretty strong assumptions about positive changes that can be made. They’ll be confident that these changes will improve the conversion rate.

However, the best way to improve the conversion rate is to look at your users. Watch them using your website, look at your analytics data to see what they’re doing, where things are going wrong, etc. It’s often easy to spot where your users are struggling or getting confused, and this is the most logical way of making positive changes to your website.

How do I quickly improve my conversion rate?

Nothing beats user testing, and it’s a job that’s never finished as technology (and the way people use it) are continuously changing. But, here’s a quick list of a few very important factors for holiday let websites looking to bump up their conversion rates:

  • Quality photos: Probably the single most important factor. Professional photos (and plenty of them) can make a massive difference
  • Easy access to information: Potential guests often have lots of questions prior to booking (about the booking process, the local area, the specific property, etc.). If you’re site can answer these questions, guests will be much more likely to book
  • Simple and fast booking process: When guests decide to book, you want to make this as quick and easy as possible. Don’t ask them for too much information, provide help if they get something wrong, make it clear what will happen next, let them book on a mobile device, etc.

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So go now… get testing! Watch people use your website. Improve it. And reap the rewards of an increased conversion rate.

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