A Report on the Analysis of Low Conversion Rates in Digital Marketing

This report provides an in-depth analysis of the challenges associated with low conversion rates in digital marketing. It explores the various factors contributing to this issue, including ineffective landing pages, poor communication channel usage, and the changing decision-making processes of customers. The report examines the impact of these factors on customer behavior, such as click-through rates versus actual purchases, and highlights the importance of data analysis and targeted marketing strategies. It also discusses the role of budget allocation, competition, and security concerns in influencing conversion rates. The report concludes with recommendations for improving conversion rates, such as selecting the right communication channels, designing attractive landing pages, and generating click-stream data to better understand customer behavior. The report emphasizes the need for businesses to adapt to the evolving digital marketing landscape and prioritize strategies that effectively convert website visitors into customers.

Digital marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN ANALYSIS AND ARGUMENTS......................................................................................1
CONCLUSION................................................................................................................................4
RECOMMENDATIONS.................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
In recent era, digital marketing is at boom. It has transformed the way of marketing
products and services. Companies are highly focusing on improving their digital marketing to
attract more customers. But in present times there has been a lot of issues which is been faced by
companies. Moreover, due to change in some trends it is difficult to make predictions (Spiller
and Tuten, 2015). Recently, companies are not able to convert visitors into customers through
digital marketing. There are a lot of people visiting their website but not purchasing any product.
The website traffic has increased but average conversion rate compared is increasing at very
minimal rate.
So, this assignment will show reasons behind low conversion rate. I believe that there lay
certain reasons due to which conversion rate is low. In spite of doing huge efforts, the return on
investment is not up to that extent. The report will cover the main issue of less conversion rate
despite of more or higher number of clicks on online portal for which one of the reason is that of
bad use of communication channels.
MAIN ANALYSIS AND ARGUMENTS
Digital marketing has improved and modernised the way of doing marketing. It has
connected people with company through effective communication. Through this, it has been easy
in selling products and building a customer base. There are many issues which is been faced in
digital marketing, but among them low conversion rate is most popular. It has forced businesses
to emphasise more on conversion of visitors to customers. Conversion rate refers to dividing
total number of visitors with those who completed their goal. A high rate is indication of
effective marketing and low means ineffective one. Apart from this, it indicates that customers
are attracted towards company but not towards their products. They are not able to attain desired
results through digital marketing.
As said by Pim, (2013) conversion rate is considered as a key performance indicator. An
organisation develops a defined strategy which helps in developing relationship with customers.
The forecast which is made related to conversion rate is not done by analysing data. So, the
information obtained is not effective. Moreover, target people are not specified in it. Hence,
many people just click on ads but do not buy product. Alongside this, due to insufficient funds an
effective digital marketing strategy is not been developed. This is because there is low return
from conversion rate. Moreover, company is focusing on other strategies to attain desired
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outcomes. Budget allocation is also a reason due to which conversion rate is low. It limits
efficiency of company to develop an effective strategy to target people.
But on contrary Quinn and et.al., (2016) said that analysing data and target audience are
not the reason behind low conversions. It is because of ineffective landing pages, mixed
messaging, etc. which is creating deviation among people. Furthermore, due to poor use of
communication channels there is no rise in conversion rate. However, in spite of using many
social sites it has been difficult to identify which source is not giving required results. There are
many issues as well related to people's perception due to which they just only click on ad and
select product, but at last moment they change their mind and refuse to buy goods. The problem
of technical error also results in non-conversion. It occurs when people click but they are been
directed towards spam ware or any other page. The ineffective landing pages restrict customers
to reach website. This increase traffic but there is no variation in conversion rate.
According to Holger and Yvonne, (2018) another factor is change in decision making
process of selecting target audience and appropriate marketing tool. The companies are not able
to identify that through which channel conversion rate can be increased. Alongside it, there has
been high rise in competition in digital marketing. It has impacted on the conversion rate
optimisation of the customers. This has highly influenced in converting customers through
clicks. The change in decision making process has allowed customers in only observing products
and then buying. They view website and variety of goods available, but do not buy.
As elucidated by Shyu and et.al., (2015), the issue of low conversion rate is rising due to
customer insights. It means that they are not able to get satisfied shopping experience. In today’s
marketing era there are many deviations which are influencing insights of customer. Even by
clicking they are not been converted. So, there lacks a communication gap which has become a
barrier. It has restricted business to get interact with them after visiting website. Also, the
customer journey has been modified. It has led to decline in satisfaction level of them. It is major
concern for companies as digital marketing trends are transforming. Consequently, user
selectivity in buying products is varying. It is not constant on any particular social site. There is
frequent change in selection of social sites. Due to this, result is not obtained from any specific
one. Also, there is difference between information obtained from data analysis. Thus, companies
are in dilemma that which social site should be opted.
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On the other hand Quinn and et.al., (2016) said that low conversion rate is not only issue
but also change in marketing trends is reason behind it. Currently, the competition in marketing
on various social sites has risen. It has influenced customer's mind in ignoring website just by
only clicking it. Now, businesses are targeting all people and have not formed segments. Hence,
they are not able to focus on particular segment and convert them. There has been rise in security
issues in digital marketing. It has changed perception of customers regarding clicking on ads.
Moreover, conversion rate from video and content marketing is high. But cost required in it is
very high and profits generated from marketing are low. So, due to this people do not prefer to
engage more on social media.
In a research done by Keegan and Rowley, (2017), it has been observed that various
mode of communication is another issue in low conversion rate. When companies try to attract
audience by using various social site only through one digital marketing content and ads, it
distracts mind of people. Moreover, on every site landing page might be different. Thus, it
creates confusion in mind of audience. So, they only click and check it but not converted. This
situation occurs when people are continuously observing ads on networking sites. Thus, both
communication channel and ineffective page are reason of low conversion rate.
On contrary Smith, (2019), stated channel of communication is not a reason. It is because
companies use those networks which best fits in marketplace. There lacks a factor that encourage
customer to convert from visitor to buyer. Additionally, trust of buyer on company plays vital
role. Businesses are not able understand the relationship of customer web experience and their
decision process. Due to this they are not able to convert visitors to buyers. However, ineffective
targeting and low focus on conversion has been major issue in digital marketing.
There are several reasons due to which conversion rate is low. It is necessary to take
effective and proper measure in motivating visitor to convert them. Consequently, in digital
marketing various other issues exist as well, but organisations are not getting return from
investment made in digital marketing. It has been found in many studies that in spite of
improving digital marketing strategies there is no impact on conversion rate. The average rate
observed is low as compared to number of clicks. Furthermore, customer journey and decision
making process is modified but there is no influence on conversion rate. Also, it is analysed that
audience only rely on authentic source. They first evaluate website source and then buy products.
People also get influenced from decision making process. In this case some landing pages may
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not display home page (Shyu and et.al., 2015). Here, people just view products and next pages.
In digital marketing low conversion rate reflects ineffectiveness in strategies.
In my view this issue has developed due to use of several communication channels and
ineffective landing pages. When a user clicks an ad, many a times website is not opened. It might
be due to technical error. Thus, the page after loading for particular time gets abandoned.
Moreover, I realised that customers are impatient so they close that page. In my opinion digital
marketing has become a successful strategy implemented by firm. It has led to increase in traffic
on websites. I realised that problem faced in low conversion rate is due audience issue. With high
number of ads and communication channels, it negatively impacts on mind of customers. Thus,
they are not able to buy products. I noticed that in conversion rate, landing pages play a crucial
role. So, if the page is not opened even after clicking on it, then people ignore it afterwards.
Apart from this, I analysed that companies are analysing data to find out needs of people.
But it has not helped in conversion rate rather only website traffic has increased. I think that
reason of low budget is main issue in low conversion. The business allocates only limited budget
for digital marketing. It is because there is very low return on investment. Alongside it, from
conversion, expected targets are not attained. Therefore, it is making it difficult for business to
raise budget for digital marketing.
So, I think that it is necessary to develop a new model for conversion rate optimisation.
Here, two methods can be applied that are micro and macro. In micro customer can be allowed to
see video or pages and in macro they can be offered discount on initial purchase. Besides this,
they can be given a free subscription for specific time period.
CONCLUSION
It can be concluded that issue of low conversion rate in spite of numerous clicks is highly
impacting on sales and profits. There are many reasons due to which this issue is still prevailing
and not been solved. The ineffective analysing data and non-selection of target population lies on
top. Then comes budget allocation and communication channel due to which customer are not
been converted. It has been summarised that business are not evaluating data of various social
sites. Hence, the decisions taken by them are not effective. Moreover, ineffective landing pages
restricts visitor to buy products. They just click page and opt out after viewing certain webpages.
It results in non-conversion.
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RECOMMENDATIONS
There are several recommendations that can be followed by companies to increase
conversion rate. They are as follows:-
 Firstly, targeted audience must be selected among population. Moreover, it will enable
firm to focus on targeted audience. By this issue will be resolved.
 Company should select right communication channel. As digital marketing is done on
various social sites thus only from one source high conversion rate can be obtained.
 The landing pages should be designed in attractive way. It can be beneficial in solving
issue of errors and crashing of pages. By this audience can be easily converted into
potential buyers. Furthermore, advance technology should be used in tracking journey of
audience. From this information gathered can be used in increasing conversion rate.
 The concept of mixed messaging should be removed. It can be done by emphasising only
on one method of promotion. It will enable in taking customer to final stage where they
buy company's product.
 Business should generate click stream data and categorised it on basis of statistics and
learning models. From this they can target specific customers and convert them into
buyers.
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REFERENCES
Books and journals
Keegan, B.J. and Rowley, J., 2017. Evaluation and decision making in social media
marketing. Management Decision. 55(1). pp.15-31.
Peter and et.al., 2014. Challenges and solutions for marketing in a digital era. European
Management Journal. 32.pp. 1-12
Pim S. 2013. Developing a New Model for Conversion Rate Optimization: A Case Study.
International Journal of Business and Management. 8 (10).
Quinn, L. and et.al., 2016. Troubled waters: the transformation of marketing in a digital
world. European Journal of Marketing. 50(12). pp.2103-2133.
Shyu, M.L. and et.al., 2015. Key Success Factors In Digital Marketing In Service Industry and
the Development Strategies: A Case Study On Fleur DE Chine At Sun Moon
Lake. International Journal of Organizational Innovation (Online). 8(1). p.171.
Smith, K.T., 2019. Mobile advertising to Digital Natives: preferences on content, style,
personalization, and functionality. Journal of Strategic Marketing. 27(1). pp.67-80.
Spiller, L. and Tuten, T., 2015. Integrating metrics across the marketing curriculum: The digital
and social media opportunity. Journal of Marketing Education. 37(2). pp.114-126.
Online
Holger F. and Yvonne G. 2018. Forecasting the Effects of In-Store Marketing on Conversion
Rates for Online Shops [online] Available through:
<file:///C:/Users/user/Downloads/forecasting-01-00006-v2.pdf>.
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