What is...

Conversion rate

Do you need more clarity over your eCommerce?
Get your conversion rate analysed by the:
  • Audience
  • Traffic sources
  • Behavior

  • The conversion rate metric remains one of the best ways to keep track of the real performance of your advertising campaigns. Mainly, the conversion rate is the percentage of persons that not only visit your website or landing page but actually convert. Through your campaigns, they need to be motivated to go beyond simple clicks and become more complex clients. What a client means to you strictly depends on your business model and on what products or services you deliver. Thus, there is more than one type of conversion. A conversion can mean one or more things, here are only a few examples:

    1. Purchasing a product or service
    2. Submitting any kind of form
    3. Successfully engaging with your chat methods
    4. Signing up for a subscription (be it free or paid)
    5. Creating an account on your site
    6. Upgrading an account
    7. Downloading a product 

    In other words, the conversion rate is a measurable process that keeps track of the rate under which a percentage of visitors become actual paying customers. Contrary to other measurement types, such as the click-through rate or cost-per-click, the conversion rate directly informs you about how good your marketing campaigns were and what you can do to improve them in order to get a good conversion rate. With better marketing, higher conversion rates are sure to ensue.

    How do I calculate the Conversion Rate?

    To know if your campaigns were successful or not, you have to be able to calculate your conversion rate. Currently, you can directly track conversions through most advertising or analytics software platforms. However, since there are plenty of such platforms which you could be using at the same time, such as Google Analytics/Google Ads or Facebook/Instagram Ads, it can become confusing to calculate the conversion rate. A solid, yet simple calculus is something any company should be able to fall back to for more precise data regarding what percentage of visitors convert.

    As stated, the conversion rate is a great metric for evaluating almost every aspect of your online marketing methods. Remember, any kind of clicks (visits) are good, but a good conversion rate (amassing actual customers) is much greater. 

    One of the most interesting things regarding the conversion rate is that you can be as specific with what type of conversion you want to find out more about as you want. Do you have a bad conversion rate? Do you have a good conversion rate? If so, can you increase the conversion rate? Here are a few different types of conversion rate aspects you can use to examine your overall marketing performance: 

    1. The overall conversion rate (your website overall efficiency when converting traffic from any source)
    2. Marketing channel conversion rate (when using platforms, is the traffic from Google Ads or the traffic from Facebook Ads more likely to increase your conversion rate?)
    3. Page-level conversion rate (which of your pages are better at converting – usually the ones with better UX – user experience)
    4. Campaign conversion rate (which targeted campaigns increased your conversion rate?)
    5. Individual ad conversion rate (do you need to tweak the copy of your ads to get a good conversion rate?)
    6. Keyword conversion rate (which SEO keywords perform better in particular for your business target?) 

    The Conversion Rate formulas 

    To calculate the conversion, a solid, yet simple conversion rate formula that comes in 3 general variants can be used for the majority of cases:

    1. Conversion Rate = Total number of conversions  / Total number of sessions * 100%
    2. Conversion Rate = Total number of conversions / Total number of unique visitors * 100%
    3. Conversion Rate = Total number of conversions / Total number of leads * 100% 

    More than one conversion rate formulas exist because calculating conversion rate directly depends, as seen in the first paragraph, on what exactly you define as a conversion. Regardless, the numerator measures your conversions and the denominator measures your total traffic.

    A simpler and more general method to calculate conversion rate is represented by dividing the number of conversions in a fixed period by the total number of people who reached your landing page or your homepage and then multiply it by 100%: 

         Conversion Rate = (conversions  / total visitors) * 100% 

    Of course, some good questions may arise while or after using the conversion rate formula: 

    Can the same person convert more than one time? 
    Can that person change his type of conversion?
    Does multiple conversion affect my conversion rate?
    What is a good conversion rate, after all? 

    To deal with this conundrum, marketers usually employ specialized terms to describe these situations. While the conversion rate is the number of conversions divided by the number of visitors, to find out the percentage of visitors that converted from a paid campaign, no matter how many times they converted, you have to divide the converting clicks by total clicks and multiply by 100%. This is called the Click conversion rate. To find it out, use one the following formula: 

           Click conversion rate = (converting clicks / total clicks) * 100% 

    The same applies for the other questions, you just use different formulas. The conversion rate is very flexible – it’s your choice whether to take multiple conversions into account, which are perfectly valid if you, for example, own more than one product or service which you want to keep track of. In the long run, taking more than one type of conversion into account shows just how much you are willing to delve into the details of your traffic and perfect your future marketing strategies.

    For most businesses, the conversion rate is equal to their click conversion rate. Click conversion rate can be useful in scenarios where you get lots of repeated conversions and you want to see what percentage of your actual visitors are converting for a more degree of control. With this out of the way, let’s answer the most important question. What is a good conversion rate?

    What is a Good Conversion Rate? 

    A good conversion rate is something which, according to the above conversion rate formulas, you may already benefit from. If you don’t, however, there are some methods to optimize your conversion rate. We will discuss them as soon as what is a good conversion rate gets its clear answer.

    As already predictable, conversion rates vary depending on your traffic quality and quantity, which vary even further depending on what industry you are active in, what kind of business you currently conduct and what product or service you sell. Following these, what qualifies as a good conversion rate for you will be strictly specific to your business model and will always be heavily influenced by your advertising campaigns. Conversion rate optimization cannot be conducted until you know your product and service and the future customers they cater to. Regardless, a good conversion rate is usually one between 2% and 5% of your traffic.

    Besides, it’s vital to keep in mind that a conversion is not always identical to a purchase. The conversion rate is a useful metric, but the final goal of marketing and advertising isn’t the production of conversions, but the sales generation. Conversion rate data, useful as it may be, doesn’t tell the whole story. A good conversion rate can sometimes be bad for businesses if those conversions aren’t further turned into sales.

    How to increase your Conversion Rate

    The information you gather via the previous methods has to be used somehow, and that somehow is translated into finding means to increase your conversion rate, regardless of the type of conversion. The increase of your conversion rate takes place when you start employing a certain set of strategies that form the CRO – Conversion Rate Optimization.

    The conversion rate optimization helps you optimize certain aspects of your marketing campaigns, such as your landing page, homepage or overall website. This generally leads to more conversions from your usual traffic (meaning this helps you get more customers from the traffic batch that you already have). Think big but let yourself be impressed by small numbers. To increase the percentage of visitors conversion rate from 1% to 2% means doubling your conversion power.

    Without employing conversion rate optimization strategies, you are rather wasting money. The traffic that lands on your site is a lost opportunity if you don’t attract them to convert, thus getting a good conversion rate. CRO is very cost-effective, it has a great ROI (return on investment) and is nourished by traffic you already have. Of course, if a severe lack of traffic is your problem, CRO won’t help that much. You should strive to increase your site traffic through other advertising or marketing tactics, but this won’t be as cost-efficient. If the traffic problems aren’t severe, the rule of thumb is that conversion rate optimization comes first. Here are the main benefits of CRO: 

    1. CRO lowers your overall customer acquisition cost 

    Conversion optimization leads to the direct conversion of greater and greater percentages of your existing traffic. Hence, no additional cost will be associated, which translated into more profit. 

    2. Help your traffic stay more on your site

    You can do this by improving the overall customer journey. A better customer journey is influenced heavily by your UX/UI. If your visitors feel like staying more on your site, the conversion rate may increase. 

    3. Directly tweak your UX 

    You can do this by improving the overall UX – User Experience. A better customer journey is influenced heavily by your UX/UI. Provide your potential customers with something outstanding. Through CRO gathered data, you’ll get lots of actionable insights into your traffic. This enables you to build the product or service that your customers truly want, thus improving your conversion rate. 

    4. Optimize your Landing Page

    There are plenty of reasons to optimize your landing page. If you have a good quantity of traffic on your site, it is wise to send them directly to a page that is specifically designed to sell your products and services, a page that offers a great user experience. Conversion rate optimization works brilliantly with landing pages. The most common way to observe the efficiency of your CRO is through A/B testing.

    To run an A/B test, you have to set up two variants of the same page and split your incoming traffic between these two. Half to variant A and half to variant B. Of course, to split your traffic, you’ll need to employ some CRO software which usually comes with a fee – but the finality of your conversion rate optimization will generate more revenue than the price you have to pay for professional CRO software.

    The conversion rate is one of the most important marketing metrics. Unlike the click-through rate, the conversion rate tells you exactly what percentage of your incoming traffic is using your products and services.

    If those clicks don’t convert, you are losing easy money. Now that you know what the conversion rate is, how to calculate your conversion rate and how to optimize your conversion rates, it’s time to put all your conversion data to work for you!

    Shopping Basket