How conversion rate is calculated

Conversion is a customer or your site visitor doing precisely what you intended for them to do. For instance, your landing page is designed to collect email addresses, and the visitor inputs their email address and submits it; this is a conversion.

Put another way, when a customer or your site’s visitor does something you offered them to do means you have converted them into a useful customer, rather than someone who came to your site or page and did nothing else.

In the case of sales, if your site visitor ends up buying something on your site, you have converted that visitor into a buying customer.

What is the conversion rate?

Conversion rate is determined by the number of visitors visiting your site or landing page and those doing exactly what the page intended for them to do. For instance, buying a service, product, or just signing up for the newsletter.

The process of calculating conversion rate:

Calculating the conversion rate is fairly simple and straightforward. Let’s explain conversion rate calculation using an example.

In any particular time period, let’s say 50 visitors came to your site. You are selling a product on your site. Five of those visitors ended up buying the product, and 45 of them didn’t buy anything at all.

In this example, your conversion rate is:

Total number of visitors: 50

Total buying visitors: 5

Applying the formula:

5 ÷ 50 = 0.1 (the actual number of paying customers)

And now for the percentage:

0.1x 100 = 10%

So, your conversion rate is either 0.1 or 10%. The percentage is preferred for easier understanding.

Knowing conversion rate is an essential factor. It helps determine the efficacy of a page design, product presentation, and user impact. Knowing the conversion rate, you can easily determine if your visitors are liking what they are offered and if the product or service you intend for them to buy, or use is effective or not.

Want to know what a good conversion rate is? Or Why your conversion rate is dropping?