How to calculate conversion rate is actually quite simple and the results of doing so will radically improve the functionality of your website, leading to more engagement and sales. In this article, we’ll go over what conversion rate is, why it’s important, and how best to use the statistic to benefit your website.
Once you fully understand conversion rate, the efficacy of your site will rise tremendously and give you the engagement you’ve been looking for.
What Is Conversion Rate?
In short, conversion rate is the total percentage of the visitors that come to your website that complete a certain goal that you would like them to accomplish. This number is derived from the total number of people coming to your site.
This means that you want the highest number possible – conversion rate directly translates into how successful your marketing and web design have been and also indicates how likely your visitors like what you are offering them!
There are many different types of conversions depending on what you want visitors to your site to do. This can be anything from making a purchase on your online store, to signing up for an email list for your blog.
It can be something like submitting a form for a petition, or even a way to contact you or other important people. Conversion rates simply discern the percentage of visitors who come to your site and actually do something.
Of course, conversions can also be a little more in-depth than simply following one metric: if, for instance, you want people to sign up to your mailing list and also make a purchase, you can track the conversion rate of that process as well.
Conversion rate is a metric that you can use however is most useful to you and your business, which is why it can be such a potent statistic to track!
As mentioned above, there are many different ways you can track conversion rates for your domain. Here are some more in-depth breakdowns of the classifications of conversion rate that you will likely want to be mindful of in the future.
Overall Conversion Rate
This rate determines how likely it is that someone engage in a desired activity on your entire website. This gives an overall picture of how well your site is operating and if you need to focus on any particular strategy.
Marketing Channel Conversion Rate
This allows you to decide which source of advertising is giving you the best bang for your buck. By analyzing the specific sources of traffic (such as Google Ads, Facebook Ads, Instagram Ads, etc), you can see which source is giving you the best results.
Page-Level Conversion Rate
This allows you to track how, specifically, any given page is doing in terms of encouraging your audience to perform a task. Whether it’s a landing page or the home page of your store, how much is it being interacted with?
Campaign Conversion Rate
This tracks the specific conversion rates of any ongoing campaigns for your website. Maybe you have taken out ads with Google or given your information to an influencer on Instagram – whatever the source, this is the method to track its efficacy.
Individual Ad Conversion Rate
The conversion rate of an individual ad is also important to understand in order to see if your marketing campaign is performing as well as you want it to. Learning more about the ads on, and pointing towards, your site is valuable information.
Keyword Conversion Rate
Keywords make up a considerable amount of overall SEO work, so it’s important to know which keywords are working for you and which aren’t doing so well. Precision with keywords is crucial to attract more traffic from searches, for instance!
How Do You Calculate Conversion Rate?
The easiest way to calculate conversion rate is to simply look at the statistics of your domain and do some simple math. In order to find conversion rates, here are three different formulas you can use:
Conversion Rate = Total number of conversions / Total number of sessions * 100
Conversion Rate = Total number of conversions / Total number of leads * 100
Conversion Rate = Total number of conversions / Total number of unique visitors * 100
By default, Google Analytics measures a session based conversion rate.
While it depends on what specifically you’re trying to measure, each of these formulas will give you a valid answer to the question of how to calculate conversion rate.
Let’s use an example to illustrate how to perform these equations:
Say you had an online shoe store. Your intended conversion is someone coming to your website, navigating to the store, and finally, making a sale.
Let’s also say that your site gets 10,000 unique visitors every month and that you are able to sell 3,000 shoes every month.
Using the equations listed above, that leaves us with:
10000 / 3000 * 100 = 0.0333, or 3%
Conversion Rate Formula for Google Ads
The conversion formula for Google Ads is very simple and essentially the same as the examples above. For Google Ads, the formula is completed by dividing the number of conversions by the total number of ad interactions during the time period designated.
If, for example, you had 80 conversions out of 1,000 interactions, your conversion rate would be 8% (80/1,000 = 0.08 = 8%).
This free tool tracks user interactions after they click on your Google ad. To get started with this functionality, head to the Google Ads desktop, then Conversion source, select a heading such as a user activity, give the tracker an informative name, and then fill out the rest of the form for the tracker.
Once complete, the conversions will appear in the conversions column of your overall site.
How to Track a Conversion Rate?
The most important aspect of conversion rate analysis is to first track any and all information related to the conversion in question. In other words, you need to know how many people clicked your ad or bought your shoes in a given timeframe in order to give you the starting point you need to truly analyze the data provided.
You can use many different tools in order to analyze this information, such as Google Analytics, Google Ads, Facebook Ads, and more, and each of these tools will have on-board features to allow you to track this information easily.
By tracking and analyzing your data regularly, you will be able to see what is working with your domain and what strategies need assistance. Perfect for making more conversions happen on your website!
While in every case the answer is: the higher the better, the reality of the situation means that you will have to judge your conversion rate by the industry average for your industry. There is a massive difference between the fashion and beauty industries and the tech industry, for instance.
There are many resources available to see which industry has which average conversion rate, but we have included an informative graph to also illustrate the range:
In short, much of what you are measuring depends on what exactly you are measuring with your conversion analysis. In addition to this variability, the nature of your business as a whole will also determine the average to aim for.
This average varies greatly depending on the industry and also upon which service you are attempting to track.
[caption id="attachment_59561" align="aligncenter" width="750"] Source: https://www.irpcommerce.com/en/gb/ecommercemarketdata.aspx[/caption]
Why Should You Track and Calculate Conversion Rate?
Ultimately, if you have a website business, you will need to determine how effective your website practices are in order to understand what needs to be done next. The only way to grow and better adapt your business to the needs of your customers is by first analyzing their action patterns and acting upon that information!
Conversion rate data is the perfect metric to use when examining performance, especially in terms of where to make improvements. It will allow you to better allocate budgets to your project, which parts of your domain you can focus on, which parts of your store you can skip over or remove completely, and many more. Understanding how often people actually engage with your site will tell you if your site is even working at all!
This is why it’s so important to monitor them continually. Good website design takes time and many things need to be checked to ensure overall health. By checking and re-checking the vital statistics of your website, you can track how effective your current strategies are at getting the population to do what you want them to do.
This can be as simple as clicking on a blog entry to read it, or as elaborate as signing up for an email service while also making sales in your store.
Conversion rate analysis is a potent tool because it allows for maximum versatility! No matter what information you need about the functionality of your site, the conversion rate will allow you to determine if it’s working or not. By using it intelligently, you will be able to greatly impact the success of your business.
If you need help with measuring and increasing your conversion rate - contact us!
At Delante since August 2017. A humanist with a marketing bent, interested in UX. She likes Pandas and writing and knows how important content is in SEO, so she also took care of the copywriting department at our company and conducts trainings on the subject. And after work: cinema, travel, board games, and Heroes III.
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