Conversion Rate

Definition:

Conversion rate refers to the percentage of website visitors or potential customers who take a desired action, such as making a purchase, filling out a form, or subscribing to a service, out of the total number of visitors or potential customers.

Conversion rate is the ratio of desired actions taken by visitors to a website or potential customers compared to the total number of visitors or potential customers, expressed as a percentage.

How-to guide:

  1. Define the desired action: Determine the specific action you want visitors or potential customers to take on your website, such as making a purchase, signing up for a newsletter, or requesting a quote.
  2. Track visitor behavior: Use analytics tools to monitor the number of visitors or potential customers who visit your website and the number of people who complete the desired action.
  3. Calculate the conversion rate: Divide the number of people who completed the desired action by the total number of visitors or potential customers and multiply by 100 to get the conversion rate percentage.

Real-world example:

If an e-commerce website receives 1,000 visitors in a month and 100 of them make a purchase, the conversion rate would be 10% (100 purchases / 1,000 visitors * 100).

Formula

Conversion Rate = (Number of Desired Actions / Total Number of Visitors or Potential Customers) * 100

VisitorDesired ActionsConversion Rate
1,00010010%
2,5001506%
5005010%

Conclusion

In summary, conversion rate measures the effectiveness of a website or marketing campaign by determining the percentage of visitors or potential customers who complete a desired action. It helps businesses evaluate their marketing efforts and optimize their strategies to improve conversions and achieve their goals.