Everything You Need to Know About Conversion Rate

Let’s take ten minutes to get back to basics about conversion rate: what it is, how to calculate it, how to improve it and how to make sure you don’t get in your own way. Ready? Let’s go!

First thing’s first: conversion can refer to almost anything. This is because conversion does not refer to any one specific action, but rather to any action a company considers valuable. A conversion could be a click, a purchase, a swipe, a subscription, a download…Basically, any desired action completed by a user (also called an event) can be referred to as a conversion. 

And what about conversion ‘rate’? This is just the number of conversions that actually occur in relation to the number of total possible conversions in a given timeframe. But more on that later. 

What is conversion rate? (and how to increase yours) 

The easiest example to illustrate conversion rate is in the context of e-commerce. Conversion rate is often used by e-commerce sites to measure the percentage of visitors that end up purchasing products. In other words, how many go through the entire conversion funnel. If you’re an e-commerce company, your goal will be to optimize your conversion rate, which should lead to increasing your bottom line. Conversion tracking can be done through any web analytics platform, like Google Analytics, Adobe Analytics or Mixpanel, for any period of time.

A conversion funnel diagram

How to calculate conversion rate

So, how should you calculate conversion rate? It’s pretty simple: All you have to do is divide the number of actions completed in a defined period of time by the total number of visitors to your website, then multiply the result by 100. In other words:

 Conversion rate = (Conversions or goals achieved / Total visitors) * 100.

So, imagine your e-commerce website got 25,746 visitors during a chosen time frame, of those 25,746 visitors, 4,832 completed a transaction. Then, your conversion rate is 18.76%. Pretty good!

Depending on what you’re looking to measure, you can also calculate conversion rate in the following ways: 

Conversion Rate = (Total number of conversions / Total number of sessions) * 100


Conversion Rate = (Total number of conversions / Total number of leads) * 100

 You can also find an automatic conversion rate calculator to get a precise calculation of your website’s conversion rate, for those not into doing their own math.

What’s a good conversion rate?

When it comes to benchmarking conversion rates, one size does not fit all. Comparing an FMCG e-commerce site conversion rate to a website for, say, automobile insurance is like comparing apples to oranges. It won’t help you figure out if your website is really converting well. That being said – and to be taken with a grain of salt – here are a few benchmarks:

This one is from Wolfgang Digital’s E-commerce 2020 KPI report.  Data was taken between November 2018 and October 2019 from their US and European clients.

A Conversion Rate Benchmark from Wolfgang Digital

Switching gears to a SEM context, we have some interesting data on click-through rates from Google Adwords: 

A CTR Benchmark on mobile by Google Adwords


What is CRO? (and how it helps you get more business)

Whether you’re managing a B2B software website or a fashion e-commerce site, you’re always going to want to generate more business. Often, marketers’ knee-jerk reaction is to pour more money into advertising, to generate more traffic – and, you hope! – more sales.

But this is the beauty of conversion rate optimization: instead of spending on acquiring more traffic, you can make educated, data-driven adjustments to your website to better convert the traffic you already have. 

You might focus on micro conversions – forms filled or clicks on key CTAs – that will lead to your macro conversions, like confirmed purchases. But to be sure that the changes you will make to your site will actually have the desired effect, you’ll need to run some statistically rigorous experiments. Let’s look at one such technique: A/B Testing.

A/B Testing

A/B Testing is a common CRO technique that involves changing one aspect of your website – the color of a CTA, the length of a form… – and observing whether this change positively or negatively impacts your chosen KPI. If your variation provides better results, you can hard code it into your site.  

An illustration of A/B Testing

For example, let’s say you’re an AB Tasty client and you’d like to increase clicks to your ‘confirm purchase’ CTA on your basket page. Using our WYSIWYG editor, you can test if changing the color of the CTA from blue to green will help here. Since you’ve already got AB Tasty’s tag on your website, you can get this test up and running in minutes. 

Unbeknownst to them, a shopper on your site will either be presented with the original version or the variation. This process is randomized, so that the pool seeing version A is more or less identical to those seeing version B. Since you’ll have set your test’s KPI to be ‘clicks on CTA’, you can easily see in the reporting which variation performed best once enough visitors have been exposed to the test to make it statistically significant. 

A/B Testing is a powerful tool in your conversion rate optimization toolbox, since it can let you remove any blockages to your conversion funnel, ensuring that more and more people convert – without having to increase your acquisition costs. You can try user insight tools like heatmaps, session recording and NPS surveys to understand where these friction points might be hiding.

Conversion killers (and how to avoid them)

Removing points of friction in your funnel is good, but avoiding them from the get-go is better! Here’s a quick list of the ‘conversion killers’ we frequently see, so you can steer clear of them as you optimize your site:

  • Too many distractions: Too many bells and whistles will only get in the way. Visitors should easily be able to find what they need. Avoid clutter and decision fatigue by presenting options in a neat, intuitive and organized way.
  • A slow site. Consumers are used to websites loading at lightning speed – not only are slow websites penalized in terms of SEO, they don’t help when it comes to conversions.
  • Unclear navigation. The keyword here is ‘intuitive’. If your users have to think too much about how to get to a certain part of your site, the UX is not user-friendly, and many visitors will drop.
  • Ultra-long forms. Yes, form length is always a toss-up between the benefits of collecting more information and the risk of seeing users drop. But as a rule of thumb, shorter is better.
  • Forced account creation. It’s usually best to give the option to checkout as a ‘guest’, and not twist the arm of your visitor into creating an account before they’re ready.

Wrapping up

Conversion rate is a crucial KPI to keep your eye on, since a good conversion rate is synonymous with a thriving business and will allow you to keep your acquisition budget in check. Try user insight tools to understand where there are trouble areas, and experiment to fix the problem and smooth out your conversion funnel. Don’t forget, conversion rate optimization is not a ‘set it and forget it strategy’. You should be continuously optimizing to be sure you stay agile and ahead of the competition. Your bottom line – and your customers – will thank you.

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