What Do I Need to Know About ‘CVR’?
What does CVR mean, it stands for Conversion Rate. When you get down to it, marketing is a numbers game: when presented with potential buyers, a marketer will want to make sales with as many of them as possible. This principle could apply to high street shoppers, television viewers, or even users on popular websites.
However, unless you happen to be the best salesman in the world, it is highly unlikely that you’ll ever manage to make sales with 100% of your customers. Certain marketing methods will attract more buyers than others, and it is the marketer’s job to choose the ones which will have the highest chance of success.
A ‘conversion rate’, or ‘CVR’, refers to the proportion of customers who do what a marketer wants (sometimes this is also referred to as the ‘conversion ratio’). For an advertisement, this could refer to the number of customers who see it, click on it and then complete a pre-specified action, such as making a purchase or signing up to a mailing list.
Typically a CVR will be calculated by taking the total number of users for a marketing campaign, dividing this figure by how many users completed the action in question, and then multiplying the result by 100. Naturally, a marketer will want the result to be as high as possible! The number of users in a campaign could refer to the amount of visits to a website, the number of emails in a mailing list, and so on.
Keep in mind that in order to add to a CVR, a customer must take the designated end action. Using an online shop as an example, this would refer to a customer actually making a purchase. Other actions, such as browsing the shop’s catalog or adding items to a basket, would not count.
Now, let’s go back to what we said about choosing marketing methods which have a high chance of success. This will usually depend on the demographics of your customers, such as what they are most interested in, as well as factors like age, gender, income or location. A marketer should also consider where his customers are most likely to find advertisements. For example, a company wanting to sell childcare products may choose to place adverts on websites which are popular with parents or childcare bloggers.
By choosing the right advertisements and placing them in the right locations, a marketer will be far more likely to enjoy a higher CVR. They can also track the CVR for different advertising campaigns, in order to give themselves a clear idea of what works and what doesn’t with their customers. This is an essential part of all marketing campaigns, especially with tools like websites, mobile apps and video advertisements offering more choices to advertisers than ever before.
Marketers with limited budgets need to choose options which are:
- Located where customers will be able to find them
- Targeted towards customer requirements
- Capable of giving customers what they need as easily as possible