What is conversion rate?
"Conversion rate" is a term for the proportion of a specific group that has taken a desired action. In online marketing, it most commonly refers to the proportion of visitors who have made a purchase on a website.
Conversion rate can also cover, for example, the number of visitors who have taken another desired action such as signing up for a newsletter, clicking on a specific button, or landing on a particular page.
How is conversion rate calculated?
Formula for calculating conversion rate:
Conversion rate is calculated using the following formula:
Number of conversions (e.g. transactions) / Number of visitors * 100.
That means if, for example, you have had 100 visitors and 10 sales, your conversion rate is 10/100*100 = 10%.
What is a good conversion rate?
What constitutes a good conversion rate will always depend on the industry you are in. Having seen conversion rates for thousands of webshops over the years, our overall experience is that a decent conversion rate is around 1.5%–3%, while a high conversion rate is above that and a low one is below it.
It is, however, very important to emphasise that these figures are highly indicative and that, as mentioned, it depends greatly on the industry and other factors when assessing whether a conversion rate is good or not.
How can I measure my conversion rate for e-commerce?
We typically recommend using the tracking tool Google Analytics to calculate your e-commerce conversion rate. In fact, the tool displays your conversion rate for you. However, this requires that e-commerce tracking has been set up in the tool.
Alternatively, you can calculate your e-commerce conversion rate using your webshop's visitor figures, found in your CMS or Analytics, and dividing the number of transactions by this figure, as shown in the formula in the section above.
Conversion rate optimisation
So how can you optimise your conversion rate? This discipline actually has its own name within online marketing and is called conversion optimisation or CRO (Conversion Rate Optimisation).
In short, it involves closely studying your website, including its usability and any obstacles to it. For this, there are several different tools such as A/B split testing, heatmaps, user tests, recordings and more.
Conversion rate optimisation is therefore an ongoing process that never truly has an end, as there are always new things to test and explore via, for example, A/B split testing.
We always recommend continuously investing in CRO on your website, as this way you can get more out of the visitors you are already attracting to your site.
Shall we have a conversation about how you can optimise the conversion rate on your website?
Would you like to optimise your conversion rate and get more out of your visitors? Call us on 30 12 42 72 for a no-obligation chat about how we can help you with conversion rate optimisation.
