What Is a Conversion Rate?

What Is a Conversion Rate?

By Charles Joseph | Editor, Financial Affairs
Reviewed by Corey Michael | Senior Financial Analyst

A conversion rate is a metric used in online marketing to calculate the percentage of visitors to a website who complete a specific goal, out of the total number of visitors. These goals, or conversions, can come in a variety of forms depending on the website’s objective. It might be a sale, form submission, newsletter signup, or any other action you want the user to perform. The conversion rate is calculated by dividing the number of conversions by the total number of visitors, then multiplying that result by 100 to get the percentage.

Related Questions

1. How do you calculate the conversion rate?

You calculate a conversion rate by dividing the number of conversions by the total number of visitors and then multiplying the result by 100. This gives you the conversion rate percentage.

2. What is a good conversion rate?

Want More Financial Tips?

Get Our Best Stuff First (for FREE)
We respect your privacy and you can unsubscribe anytime.

A good conversion rate depends on your industry and your specific goals. As a broad benchmark, a 2% to 5% conversion rate is often considered good in the e-commerce space. But, it can be higher or lower depending on multiple factors.

3. Can you improve conversion rates?

Yes, you can improve conversion rates through a variety of methods, including website optimization, A/B testing, improving website loading speed, and creating compelling content or offers.

4. Why is conversion rate important?

Conversion rate is important because it directly affects your return on investment. The higher the conversion rate, the more revenue you generate from the same amount of web traffic.

5. Are all conversions the same?

No, not all conversions are the same. Some conversions might bring immediate revenue (like product sales), while others might lead to potential revenue in the future (like newsletter sign-ups).