What You Need To Know: Click-through Rates
Click-through rate measures how many people who see your product, email app or website actually click onwards. Knowing the rate means you can track your content’s effectiveness and increase the number of successful conversions. Every platform has a different method for tracking (like social media, email or in-app actions), but each one will further your understanding of your audience and customer segmentation.
What is Click-through Rate?
Click-through rate is the proportion of people who click your link, call-to-action or in-app action when they view it. Not every single impression of your product, email campaign or website will lead to a click. Tracking the click-through rate gives you deeper insights than traffic alone, because the number of impressions doesn’t explain if people were motivated to continue.
Why Should We Care About Click-through Rate?
Imagine you want to advertise your business, so you print out 100 flyers and deliver them around the neighbourhood. Now imagine 99 out of 100 people throw out your flyer without ever looking at it. That’s what happens when you have a low click-through rate!
With the ultimate goal of converting and retaining users or customers, we have to make sure they get deep enough into our products and content to get value.
Improving the click-through rate on these opportunities pays off, making sure the time you invest in creating content and optimizing your app or website isn’t wasted.
A small percentage improvement in click-through rate can drastically increase the rate of user acquisition or conversion to paying customer, since the average rate is often a single-digit number.
How Do We Improve Click-through Rate?
1. Understand Industry and Platform Averages
The first step is to set reasonable expectations for your goals by doing research. What does your current click-through rate look like for the property you want to measure? What does it look like for others using similar email marketing, social media ads? How does your industry influence the rate?
2. Track The Current Click-through Rate
Depending on the property you are tracking, there are different ways to get it done. For social media ads, you have options like the Facebook Pixel which tracks the conversion of users viewing your ads. Other kinds of software can track behaviour on your website and inside apps to further customer segmentation.
3. Understand Your Audience
Who are your most loyal customers? Who are the people who have already been clicking? Having a good grasp of your customer segmentation will help you to customize messages and actions based on the audience.
You might find that reaching a certain level of investment in your platform or buying process means customers are more likely to finalize a purchase. You can use this information to incentivize other users to reach that stage.
4. Experiment With Design and Words
Finally, experiment with the design and the words you use to drive action. How can you make the next step more clear? How can you bring value to your users or readers sooner? Working methodically and keeping track of results will make the successful tactics apparent.
A common method is called A/B testing, where different groups of users are shown one of two variations of the same design to compare the results.
Speaking of Design
Here’s the vocabulary you need to know to talk about click-through rate:
Customer Segmentation: Customer segmentation is the process of defining and categorizing your customers into relevant groups. This can be achieved using historical data (like purchasing or in-app behaviour), or through user personas (group like users by demographics or other motivations and interests).
Email Marketing: Email marketing includes regular newsletters, promotional campaigns and event-based emails that are sent to customers. As one of the best performing types of marketing, many companies place an emphasis on building their email list and improving their content.
Loyalty: Loyalty is when users continue to use a platform or product, and may even begin to recommend it to others. Loyalty is important to measure and reward to increase satisfaction and encourage users to share their experience.
User Acquisition: User acquisition is the process of adding new users to your platform, product or service. Having a deep understanding of this process for your particular business can unlock insights that either decrease the cost of gaining users or increase the rate.
