{"id":15208,"date":"2022-08-23T13:53:18","date_gmt":"2022-08-23T13:53:18","guid":{"rendered":"https:\/\/www.searchenginejournal.com\/what-is-conversion-rate\/461109\/"},"modified":"2022-08-23T13:53:18","modified_gmt":"2022-08-23T13:53:18","slug":"what-is-conversion-rate-how-do-you-calculate-it-via-sejournal-coreydmorris","status":"publish","type":"post","link":"https:\/\/marketingnewsbox.com\/?p=15208","title":{"rendered":"What Is Conversion Rate & How Do You Calculate It? via @sejournal, @coreydmorris"},"content":{"rendered":"
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Conversion rate is one of the most common metrics used by marketers, sales folks, and business professionals.<\/p>\n

It is discussed often and taken on the surface as an important metric or key performance indicator<\/a> (KPI) for most businesses.<\/p>\n

However, it can also be misapplied, misunderstood, or improperly established for use as a key metric.<\/p>\n

It is important to revisit conversions, conversion rates, and the use of the metric periodically.<\/p>\n

It is even more important for any new initiative to have the metric well defined and understood before positioning it as a key KPI.<\/p>\n

In this guide, I\u2019m going to dive deeply into what conversion rate is, how to calculate it, why that\u2019s important, and ways to improve it.<\/p>\n

What Is Conversion Rate?<\/h2>\n

Google<\/a> provides one of the more concise definitions of conversion rate:<\/p>\n

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\u201cConversion rates are calculated by simply taking the number of conversions and dividing that by the number of total ad interactions that can be tracked to a conversion during the same time period.\u201d<\/p>\n<\/blockquote>\n

Now, let\u2019s get into what it all means.<\/p>\n

Conversions<\/h3>\n

Unlike some business and marketing metrics, understanding conversion rates require some self-definition.<\/p>\n

It starts with defining what a conversion is \u2013 which can mean different things for varying types of brands and organizations.<\/p>\n

You can have more than one type of conversion. As a goal, you can have it factored into a marketing funnel or customer journey. Or, it could be a firm financial metric your business hinges on.<\/p>\n

Step one is to clearly define what a conversion is for you.<\/p>\n

One of the most common definitions I see relates to someone becoming a lead for a business that is focused on driving leads via its website.<\/p>\n

Another applies to ecommerce businesses, where the conversion is the completed sale transaction.<\/p>\n

Other common definitions include certain engagement metrics for businesses that rely on ad revenue generated by page views.<\/p>\n

Secondary types of conversions get into events, engagement, and other things like email signups that help support funnels, customer journeys, and overall sales processes.<\/p>\n

Conversion Rate<\/h3>\n

Conversion rate is a %.<\/p>\n

In high-level terms, it tells you the % of how many people came to your site who took the conversion goal action you defined.<\/p>\n

Some sources provide benchmarks for specific industries or areas to help you understand a good conversion rate and offer some objectivity.<\/p>\n

I\u2019m not telling you to copy your competitors, but I think if you want to value conversion rate, you need internal and external research to validate where you stand and where you want to be.<\/p>\n

Match this up with your persona research, target audiences, marketing funnels, and customer journeys<\/a>.<\/p>\n

You likely know what you want your site visitors and audience to do.<\/p>\n

How many of them do you want to do it? How big is the universe of your target audience? What is realistic regarding the number of total visitors you think you can get?<\/p>\n

Find answers to these questions along with mapping out your conversion goals and conversion rate goals.<\/p>\n

How Do You Calculate Conversion Rate?<\/h2>\n

Conversion Rate Formula<\/h3>\n

The formula to calculate the conversion rate is straightforward:<\/p>\n

Conversions \/ Visits* = Conversion Rate<\/p>\n

*I have to include an asterisk, though, as some definitions might not be as straightforward.<\/p>\n

You could also call these \u201cclicks\u201d or \u201csessions\u201d or look at them more granularly.<\/p>\n

My definition here can be adapted based on the language and definitions used by your analytics platform and your other KPIs.<\/p>\n

An example in calculating conversion rate for my site (a marketing agency providing services to clients) with the inputs and calculation:<\/p>\n