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How to Calculate a Conversion Rate in Hubspot


how to calculate a conversion rate in hubspot

Conversion rate is one of the most important concepts in determining the success of a website and the success of an ecommerce solution. Hubspot's dashboard is the industry accepted standard of CRM tracking, and its conversion rate tools are of course similarly industry standard.


Ultimately, in covering how a companies convert deals and moves from deals created to deals closed won, the conversion rate tracking in the Hubspot interface is an important sales tool to make sure that deals are brought to fruition by a company's sales force. Revenue and the steps a company must take to obtain it are built by the Hubspot team as much as by the sales force.


Conversion Rates


A conversion rate is the percentage of customers who complete a desired action. In web relationships this is either continuing to stay on a website to read content, or purchasing either electronic or tangible merchandise through an ecommerce link.


If your conversion rate is high, it's a measure of how well-designed your website is, and how compelling the content you create is. Ecommerce data shows customer engagement in the products that your website offers, whether those products are tangibles or experiences.


Your company is probably looking to keep customers on your website as long as

possible. Ultimately customers typically spend only seconds viewing a webpage Even with the most compelling content, people's attention spans are short, and improving the length of their engagement is likely to only have moderate effect.


In that brief engagement time, your website needs to bring them a compelling reason to stay around and continue to engage. So your web design has to quickly engage a customer's interest.


Hubspot is a tool to introduce, track, and manage a company's customer relationships (CRM). On a month to month basis, the wise Hubspot manager will use the dashboard to obtain and calculate the information essential to the company's continued functioning.


It's all about web traffic


Websites like Amazon and YouTube generate millions of clicks every second. Those clicks create a plethora of data that are used to determine the future of the entire company. Insight generated from that data will be used in subsequent business deals, either with the customer themselves or with other companies for whom your data represents a valuable resource.


Happy Bookday To You


Let's say you have just launched a brand-new ebook and your definition of a conversion is a sale of one file. With this information in mind, you open your ecommerce site and begin to sell your book.


Your ecommerce site sees 4,000 clicks in the first hour. In that hour, it generates 32 sales of the book. That is raw data, and sales are certainly always appreciated. When analyzing this data, however, it's important to understand the goals that it supports.


For some websites, 4,000 clicks in an hour is a good rate. For a site like YouTube or Amazon, it might not even be a ripple in the ocean of data they sift on a daily basis. When analyzing your data, you have to be ready to apply the context of the site you're analyzing for.


Web Traffic


As long as you know your incoming web traffic, and the number of clickthroughs, you can calculate conversion rates fairly trivially. A good conversion rate varies business by business, depending on the area of interest of the business. Book publishing, for example, has historically low conversion rates, as publishers are asking customers to sign on for a long relationship.


Paid traffic vs. Organic traffic


Another question is paid traffic vs. organic traffic. Organic traffic is traffic that comes by through the internet while paid traffic is sent to your company by a paid campaign. The latter is often more likely to convert than the former. Paid advertising is, however, more difficult now than it once was.


Customers who were once open to anything coming into their computer off of the internet have turned on ad blockers because they've gotten tired of interstitials and pop-ups


Even something as simple as ecommerce, which a look at internet sources can reveal an average conversion rate in the range of 3%. However, depending on service and on source, a good conversion rate may be .1% or it may be 15%. It's difficult sometimes to determine what data you should be looking at when there are so many variations on the same info.


To calculate conversion rate, the sales force manager will need to divide number of conversions, or leads generated, by the number of visitors, or web traffic, and then multiply that by 100 to calculate the percentage.


Leads Generated ÷ Visitors x 100 = conversion rate


Using the example given above, the clickthrough rate is 0.8%. This data may indicate a successful first hour, depending on your plans, or it may generate significant cause for concern for your company. Either way, this information will determine your future relationship with the book you've just launched.


Hopefully this has just illustrated that it's not just important to get 50 more clicks from a webpage. An active webpage might get 50 clicks in a fraction of a second. What matters is getting more of your desired action for every X people who visite the page. And from a user POV, what's important at this point is what you do with the data you've just created.


Conversion Rate Optimization Of Your Homepage


The homepage is the most important part of customer creation and retention and for many businesses, it's one of their most overlooked opportunities. An overly complicated homepage can turn away customers before they've ever seen what you have for sale, but an overly simple homepage may leave viewers baffled as to how they could become customers.


What About Your Homepage


The homepage is also the easiest way to see what conversion looks like. A conversion for a homepage is simply a viewer who chooses to click through a link to see what's going on in the rest of the website. That information can be useful to quickly improve your homepage.


Your conversion rate goal is going to be based on your industry. A rate of 0.08%, the example above, is probably not going to be acceptable in the travel industry, while it might be quite good in the publishing industry. Creating impressions and building relationships is complicated in any industry.


Hubspot's Conversion Rate Tools


The real product of the Internet is data. Over the last 30 years, the Internet has created countless terabytes of data on human behavior through click data about people's habits: Who they follow on social media, how to change their minds about virtually any topic, how they choose to spend their time.


A customer's time is important. Ultimately, that's why conversion rate optimization benefits both your company and them. The less time a customer has to spend on your website to get what they want, the more likely they are to take what they want from you and not give their business to a competitor.


Consider Cart Abandonment


An abandoned cart is one of the biggest indicators that your website has a pain point that's causing customers to abandon an order that's almost completed. How many times has a customer left their cart, either deleting items out of the cart or canceling the order? This is an important entry point to understanding where customers are meeting barriers.


When you enter a relationship with the customer, they are letting you know what kind of deals they're interested in. An abandoned cart is revenue left on the table. It's a deal that the customer wanted to complete but for some reason, they decided to abandon the deal. Hubspot can help you turn those abandoned carts into completed deals.


Relationship Building Using Hubspot Data


Building that relationship needs to happen in seconds because the average customer spends just 54 seconds on a website. Over less than a minute, the relationship has to be built and matured, and the customer decides on the next step they're going to take. Either they're going to stay on your website, or they're going to click away to something else.


Hubspot's funnel reports can be customized down to a single object to analyze items as minutely as a single object or single deal, based on lifecycle stages. The next step and cumulative conversion rate tools are a simple visualization of how many contacts take a step into the funnel, creating leads and opportunities for the sales team to follow.


Report Building


Data can be broken down into human-comprehensible reports using Hubspot tools. The funnel report is one of the most useful in Hubspot, with the contacts, deals, and events funnels helping the company see where it's doing well and where it can do better.


As the customer gets further down the funnel, one would normally assume that they'd be closer to completing the sale. But often, the deal can be abandoned very late in the process for relatively petty reasons, and while customers will get started with very little hesitation, they like to feel that they have control as the deal continues toward close.


A/B Testing Is A Key


In testing a website, there's little better to see how you can seal the deal more effectively than an A/B test. By testing different variations on a webpage for different customers, a company can quickly and effectively sort out the effects on conversion rates for different homepage variations. In as little as an hour, trend differences can be tested.


Why A/B Test?


For A/B testing, conversion rates between minor variations can be easily tested, giving a company direct data that will help them create deals and ad copy that will add value to their websites. Once the A/B testing period is complete, which could be a month, a day, or as little as an hour, select the better performing variant of the feature to be the only feature going forward.


A/B testing a quick, easy step, and it's an industry standard marketing tool to choose the best text to use on the web.


Performing an A/B Test


A/B testing, which is also called split testing, is randomized experiment type where two or more text or image variations are weighed against each other to compare how they perform. Once the test is ready for deployment, it can be put out to customers to see how the variations act in terms of each one's conversion rates.


The two or more conversion rates can then be directly compared and the better-performing version can take over for the lesser performing ones. In Hubspot, the most common A/B test variation is the two-version A/B test, which is also easiest to create, and has the advantage that it minimizes variables. Two test pages, two data points.


Solving visitor pain points


Many companies will tell you that the customers doing you the biggest favor are customers who complain. While complaints can be painful for employees tasked with managing them, and customers sometimes do need to be encouraged to treat those employees with more kindness, they're important to improve your conversion rate.


To improve your visitor experience, Hubspot can help you run an A/B test on an element of your user interface that customers are telling you that they're dissatisfied with. This can be as little as a single word on a homepage, or as much as a confusing link to your ecommerce.


Offers


One of the most common reasons to perform an A/B test is to see what kind of special offer works better to entice a customer to buy. A special 10% discount for new customers, for example, may be a good deal for the customer and the company when a site is starting out and needs to attract new traffic. Free shipping may be the way to go for an established ecommerce venture.


Headlines


On the internet, headlines aren't just for newspapers anymore. The headline of a blog post or other article on the internet can make or break a website by creating impressions that may be hard to shake. A/B testing on Hubspot can incorporate variations as small as one word in a headline.


Once those headline variations are set, the company can move into a testing program that can give a great deal of data for future improvements in web design, directly improving revenue.


Trigger Timing


In many cases, the A/B test can be on as little as what the optimal trigger timing is for an interstitial. In the case of many newspapers online, it can be beneficial to let a customer get a little bit into reading an article on the website before activating the paywall interstitial.


Trigger timing affects conversion rates. Too soon and the customer may not have read enough. Too late and the customer may have read the entire article


Step 1: Research


Before you begin to build an A/B test plan, you will need to conduct research to see how the website is currently performing. Running tests on the website's configuration before you begin will let you know what your conversion rates currently are, which will let you calculate where you want your conversion rates to be and create the text to try to bring those rates up.


The research that determines the A/B test's form can be done in as little as a handful of steps. Hubspot has automatic table generation tools that can break down as few variables as the user needs. These tools can be accessed via the Hubspot dashboard and are live at any time.


Once the research is started, if the company decides that an A/B test should be done, it's time to move on to the following steps.


Step 2: Define the Experiment


An A/B test is a form of experiment. So in this step, defining it by keeping in mind the particular data that the experiment will be looking at is the goal. If the data are poorly defined, the experiment also will be, and may well fail. The whole point of A/B testing is to make a decision, and good decisions can't be made with bad information.


Step 3: Create the text variations for your website.


With two versions of your copy, which could be differentiated by only the add or subtraction of as little as a few words, you have created your A/B test variations that can then be fed into the system.


A/B text or an A/B image are both in the same area of design. A minor variation that can be tested to see which has the greater effect on customer engagement.


Step 4: A/B Test goes live


With the live date of the A/B test, the two different copy texts become available to customers and will be available to serve. In most cases, the A/B test will be served to customers based on their IP address so that each individual customer won't be aware that a test is going on. Nor should they. The success of an A/B test is linked to its being invisible to the customer.


Hubspot tools will help make this step of the test a success. By gating test results by IP address or by country, the table will be filled out.


Step 5: Analyze the test results


An A/B test seldom needs a month or even a day to get actionable information. On a well-designed website, actionable information can be gathered from an A/B test in as little as six hours. When one of the options shows a clear add of value against the other, select that option to be the main option going forward.


A/B testing is a continuous process, so it's always good to run different texts to customers.


Step 6: Deploy changes


This is also part of Step 5, but deployment of changes doesn't need to be a one-and-done process. A website with a good process should be constantly testing its text to improve its conversion rates. Helping you with this is one of the biggest things you can accomplish with Hubspot.


Go to hubspot.com and follow HubSpot on social media to see more information about this and other features to enhance your business.


Sources:

Hubspot 1, 2, 3, 4, 5, 6, 7 | Adoric | VWO

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