What does conversion rate mean?
Conversion rate is one of the best ways to measure the effectiveness of your marketing.
Unlike click-through rate or Pay Per Click (PPC), conversion rate describes how good your marketing is at getting people to do what you want them to do (we call this "conversion" in the marketing world).
Depending on your business goals, a "conversion" can be almost anything, but here are a few common types of conversions:
- A customer makes a purchase
- A customer fills in their information in a form - e.g. a lead ad
- A customer calls your company
- A customer signs up for your subscription
- A customer downloads your pdf or other
There are lots of other conversion actions that people can perform on a site, but these examples should give you an idea of what a "conversion" might be. Basically, a conversion is a measurable action that propels a potential customer toward becoming a paying customer in an important way.
Calculate your conversion rate
Once you have defined which conversions you want to track, you can calculate the conversion rate.
Calculating conversion is actually quite easy. All you have to do is divide the number of conversions you get in a given time frame by the total number of people who visited your website or landing page and multiply it by 100.
In the following example, a conversion is a sale.
Conversion rate = total number of sales / number of leads * 100
Example: let's say you made 10 sales last year and you had 100 enquiries / leads. Your conversion rate for sales is therefore 10 %.
If you track conversions from your website's leads, your formula looks like this:
Conversion rate = total number of sales / number of unique visitors * 100
Example: if you made 10 sales in a month and you had 1,000 unique visitors to your site, your conversion rate would be 1 %.
You don't always have to calculate your conversion rate yourself, because if you set up your tracking properly on e.g. your Google Ads or Facebook ads and analytics platforms like Google Analytics, the different platforms actually show you your conversion rate.
Read more about conversion optimization.
