What is a conversion rate? In the world of business, it’s all about sales which must mean it’s all about conversion too. Conversions are how your website ultimately makes money, either through making sales or getting users into your marketing funnel.

One of the best ways to measure the success of a product, service marketing approach or just about anything else is by using a conversion rate.

By understanding conversion rates it becomes possible to implement new marketing techniques while optimising these methods to make the most of your marketing spend.


Let’s start with the basics.

What is a Website’s Conversion Rate?

The term “conversion rate” can mean a number of things to different people. However, normally a conversion rate is the percentage of individuals who take a desired action.

What is a conversion rate featured

The most common example of a conversion rate is a percentage of website visitors who end up purchasing a product or service from the website.

At other times, a conversion doesn’t need to occur when a website visitor makes a purchase. There are other Key Performance Indicator (KPI) opportunities that a business can use to measure other conversion rate forms.

Types of Conversion

While buying something is the most common kind of conversion, and indeed the most valuable, there are a number of other actions which users can take on your site:

  • Signing up for a service,
  • Contacting your business,
  • Entering in an email address to join a mailing list,
  • Becoming a registered user,
  • Downloading trial software,
  • Upgrading to a new service level,
  • Downloading an application on a mobile device.

In other words, a conversion rate meaning is determined by the action you want people to take on your site.

A company identifies a set outcome goal. This could be making sales or increasing a social media following.

Every user who interacts with a marketing campaign becomes a visitor and every one of these visitors who obtains the final goal set out by the company becomes a conversion.

How to Calculate a Conversion Rate

Calculating a conversion rate is rather straightforward.

First, you need to know how many people have visited your site, either in total or from a single marketing channel.

Next, identify the number of successful “conversions” your site had, such as the number of sales, the number of individuals who signed up for an email newsletter or whatever else the end goal for the marketing plan was.

Divide the number of conversions by the total number of interactions. This is your conversion rate.

Conversion rate formula
Calculating a conversion rate is straightforward. Image credit: PopUpSmart

What is Conversion Rate Optimisation?

The drive of any business is to reach its desired goals with the highest conversion rate possible.

While a 100 percent conversion rate is not likely, there are ways to boost the current conversion rate, through a process known as conversion rate optimization (CRO). This is the method of which the desired outcome is increased.

There are a number of different CRO methods.

In many instances, tips and tools used to improve the conversion rate will also boost other performance features on a website, such as search engine optimization and bounce rate.

One method for boosting the CRO is to reduce website load time.

The longer it takes a website to load the higher the likelihood of a visitor leaving the site. Website load time also impacts a site’s search engine optimization as search engines such as Google take into account load time when determining site ranks.

A reduction in load time will also help improve the bounce rate, decreasing the proportion of users who immediately exit the site.

Content and Conversion Rate Optimization

Another way to boost CRO is to increase the level of content. By adding more blog posts to a site during a given week, it’s possible to increase website exposure. This promotes the business further and allows visitors to increase interaction with the business.

These posts also help boost the number of times a search engine crawls the site, which helps with search engine optimization as well.

A few other ways a website, business owner or marketing agency can boost the conversion rate is to add social sharing options to a website.

This positions important content for a website above the fold and by focusing on a single topic when creating advertisement material.

By implementing these different tips, it’s possible for a website, business owner or marketer to improve the company’s overall conversion rate.

CRO and Web Design

There are also a number of web design elements which will help to boost your conversion rate. These include things like providing simplistic and easy navigation towards your key conversion points.

You can also experiment with different language and colour combinations on your calls to action, in order to choose the design which resonates the best with your users.

Conversion rate optimisation infographic
There are a number of stages to CRO. Image credit: SmartInsights

Monitoring Conversions on Your Site

While the standard conversion rate is the number of conversions divided by the number of unique interactions, there are other conversion rate monitoring methods that you should be aware of.

Some services, such as Google AdWords, help by automatically providing this information within a user’s dashboard. However, there may be times when the business wants to know how to perform the formula on their own.

For example, you’ll want to know which marketing channels or landing pages offer the best conversions, as well as how many site visits are required for the average user to make a purchase.

Outside of the standard conversion rate formula, the cost per conversion is important to know as well. This builds slightly on the standard formula. The cost per conversion begins with identifying the cost per click.

This is the amount of money a business spends bringing in a visitor to the website. Often, this is done by a CPC advertisement.

Conversion Cost Explained

Every time someone clicks on the advertisement the business is charged an advertising fee. Sometimes this fee will vary based on the current rate for which Google charges based on the keyword.

To begin the formula, it’s necessary to identify the current cost per click.

From here, the user needs to multiply the cost per click by the number of clicks. If, for example, the cost per click is £0.50 and 1,000 users clicked on the advertisement, it cost the company a total of £500 to generate the conversions.

If the business saw a total of 25 conversions, it’s then necessary to divide 25 by 500, which is 20 (or £20). In this instance, it costs the company £20 per conversion.

What is a Conversion Rate?

Your website’s conversion rate is one of the most important data points you have to decide if your online efforts are effective. Ultimately, this figure tells you how effective your website is as a sales tool.

By understanding a conversion rate, it becomes that much easier to identify ways to improve what the business does.

From conversion rate optimization to taking advantage of Google AdWords, there’s a considerable amount of knowledge any marketing professional or business owner can take from the conversion rate statistic.

To find out more about gaining more conversion on your website, contact ProfileTree today.

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