Definition: Conversion Rate

What is conversion rate?

Conversion rate is the percentage of visitors to a website or eCommerce store who take a desired action, such as making a purchase, filling out a form, or subscribing to a newsletter.

How is the conversion rate calculated?

Let's say you run an online store that sells shoes, and during a given week, 1,000 people visited your site. Out of those 1,000 visitors, 50 made a purchase. To calculate your conversion rate, you would divide the number of purchases by the number of visitors, and then multiply by 100, like this:

(Number of conversions / Total number of visitors) x 100 = Conversion rate

In this case, the conversion rate for the example above would be:

(50 / 1,000) x 100 = 5%

So your conversion rate for that week would be 5%. This means that for every 100 people who visited your site, 5 of them made a purchase.

Why does conversion rate matter?

A high conversion rate indicates that your website is performing well and that your marketing efforts are resonating with your target audience. Conversely, a low conversion rate may indicate issues with your website's design, user experience, messaging, or value proposition.

It's important to note that conversion rate is not a one-size-fits-all metric. What counts as a conversion can vary depending on your business goals and objectives. For instance, a software company might consider a free trial signup as a conversion, while an eCommerce store might consider a completed purchase as a conversion.

To improve your conversion rate, you can employ a variety of tactics, such as:

  • Optimizing your website's design and layout
  • Improving your copy and messaging
  • Using compelling visuals in your marketing messages
  • Simplifying your checkout process
  • Reducing friction points that may discourage visitors from converting

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