# What is Conversion Rate? Definition, Formula and Calculation

## What is the Conversion Rate?

### Conversion Rate Definition:

Conversion rate refers to the percentage of users who take the desired action once they land on your page. The action can involve clicking on a button, signing up, or making a purchase to become your valued customer. Businesses, apps, and websites have conversion goals, and their conversion rates will differ from time to time and site to site.

The conversion rate is a metric that reflects how many of the visitors from the web traffic have performed the desired action.

A conversion is an event where a visitor on a website performs an action chosen by a web designer.

### Examples of Conversion

• Buying something from the website.
• Purchasing a subscription.
• Sign up to make an account or register on the site.
• Engagement with the business through chat or call.

### Conversion Rate Types

• Overall conversion rate- overall traffic conversion.
• Marketing channel conversion rate- conversion of ad traffic.
• Page-level conversion rate- conversion based on web pages.
• Campaign conversion rate- promotional campaign-related conversion.
• Individual ad conversion rate- which ads convert more than others.
• Keyword conversion rate- certain words on the webpage that enhances the SEO. So we are dealing with the conversion through these keywords.

## How To Calculate the Conversion Rate?

The calculation of the conversion rate is simple.

The conversion rate formula is:

To obtain a percentage, you must divide the conversions by the number of visitors for a given period and multiply this ratio by 100.

For example, a particular free article on a magazine website gets 500 visitors in a month. Of these visitors, 50 subscribed for full access through a paid subscription, the magazine’s desired outcome. Now, the conversion rate will be said to be 10%.

Using the above conversion rate formula to calculate the website conversion rate. However, if your business has multiple goals, you must calculate them separately and as a whole package.

You can use multiple conversion rate calculators available on the internet. Below we give a conversion example of how a business that wants to sell clothes and increase subscribers can measure the conversion rates separately.

• Total conversion: Unique visitors / The number of visitors with any conversion
• Subscriber conversion: Unique visitors / The number of new subscribers
• Shopper conversion: Unique visitors / The number of new customers

## How To Increase the Conversion Rate?

We have learned that conversion and traffic generation are two different things. Therefore, when the goal is to boost the conversion rate, it is necessary to focus on the platform’s product.

If you want to reach a higher conversion rate, you need to analyze and critique the current status of conversion.

Two primary ways to increase conversion rate are:

### Provide the best offer and value proposition:

You can gain more and more visitors, but what matters the most is how many of them go on to act in the desired way.

This point has to do with the offer that the visitor is making.

Are they gaining the best value in return for their actions?

This point includes pricing, quality, users’ needs, and the solution offered.

### Improve and optimize the website:

Apart from the product features, a good UI and UX design is also a vital asset in a website’s conversion process.

It should convey the benefits of performing a specific action or buying a product from the website.

Make use of color tools, design methods, and SEO tools.

Pro tip: Build amazing products today using product management software

### What Can You Consider a Good Conversion Rate?

Every industry has different conversion rates. For instance, a conversion rate of a B2B will vary from that of the e-commerce website.

B2B’s journey is longer and will take time to reach a higher conversion rate. At the same time, the e-commerce platform will expect to achieve a high conversion rate soon.

A good conversion rate is anything between the 2-5% range. However, well-optimized websites can get between 10-11% conversion rates.

The top 25% of businesses have about 5.31% or more as their conversion rate.

Let’s look at different industries’ bottom, middle, and top conversion rates.

Finance

Top: 24.48%

Middle: 11.19%

Bottom: 5.01%

E-commerce

Top: 6.25%

Middle: 3.71%

Bottom: 1.84%

B2B

Top: 11.70%

Middle: 4.31%

Bottom: 2.23%

Legal

Top: 6.46%

Middle: 4.12%

Bottom: 1.07%

With the help of the above chart, you can check the conversion rate for your industry and try to push for higher conversion rates accordingly.

## Click Through vs. Conversion Rate

You need to understand the concepts and the difference between the click through rate and conversion rate. Knowing well the difference between the two will help your digital marketing campaign.

A click through rate is a metric that shows how many people successfully clicked on your ad to visit a page.

The conversion rate is the percentage that shows how many visitors take action from amongst the total users who landed on your page.

Click-through-rate = Clicks / Impressions

Conversion rate = Conversions / Clicks

If your click through rate is low, the ad you are showcasing is irrelevant to your audience. Hence improvement in your ad copy is necessary.

On the other hand, your target audience clicks through and lands on your page if your conversion rate is low. However, it doesn’t interest them to convert as a customer.

Click through rates can help you measure how well your ad campaign ranks. A good CTR indicates the following:

• It shows that you are on the right track
• A good click through rate translates into a good conversion rate
• You can have a good ad impression by share
• You can get a better quality score

A good conversion rate depicts the following advantages:

• Increase in return on investment
• You can optimize the conversion rates
• Gain high traffic from Google

## FAQs

The event where a visitor goes on to perform an action that the business desires. The action can be purchasing, subscribing, signing up, liking or sharing, etc.

Conversion rate tells about the percentage of visitors among the total traffic that performed the desired action.

Bad conversion rate will vary according to the business situation. However, generally speaking, if your conversion rate is below 3%, you have a bad conversion rate, and it is time for you to look at your strategy.

Two main reasons for having a bad conversion rate are that the website is not mobile-friendly and the navigation is poor.