What is conversion rate?
This is a percentage that represents the average number of conversions. So to understand a conversion rate, first you need to understand what a conversion is!
A conversion is when a person completes a desired action online that you are tracking for your business. In short, it’s when someone performs your marketing call to action. You can define what the conversion action is that you are going to measure.
Usually, a specific button click can be called a conversion. This button click could be a URL, a form submission, an ad view, a video view, an email open, an online purchase, an app download, or even a call from a mobile phone. When you say that you have experienced a conversion, it means that someone completed the desired interaction. So for example, if you have a website with an appointment booking form, you can decide that this form will be used to measure conversions. When a customer fills out the booking form and presses the submit button, you have a conversion.
Conversions can apply to your website, specific landing pages, online ad campaigns, email campaigns, social media posts, or online marketplaces that you have a listing in. It’s possible to have multiple conversions. Let’s say that a customer sees your ad and clicks on it, you have a conversion. Now that customer is on your landing page and clicks on a button to visit your website. So you have second conversion. Finally, this customer purchases an item from your website and you’ve got your ultimate conversion. If you have a longer and more complex sale, you’re more likely to have a series of smaller conversions at various stages of engaging customers.
Some conversions are not tied to button clicks. An example is a customer that scans a QR code (those black-and-white pixelated squares) to get a coupon. Then this customer makes a purchase at a brick-and-mortar shop or restaurant using that coupon.
Once you have defined what your conversion action is, you can calculate your conversion rate. To calculate a conversion rate for a website, you take the number of conversions and divide it by the number of visitors. If, for example, you had 100 conversions on your website and 2,000 visitors last month then you have a conversion rate of 5%. For an online ad, you would take the number of conversions and divide it by the total number of ad interactions. Overall, you are taking the number of people who completed the conversion and dividing it by the number of people who could have potentially completed the conversion.
The higher the percentage, the better the conversion rate. A good conversion rate depends on the industry and how many conversions you’re tracking. If you’ve decided to track more than one conversion action, then it’s technically possible to get a conversion rate of higher than 100%. You can improve your conversion rate by assessing your content and figuring out where to make improvements.