The best way to track site performance is to calculate its conversion rate. How can you do it? With the help of the formulas, we have picked for you. Spare five minutes to read this article and get a clear understanding of the performance of your online business.
CR - conversion rate – is the percentage of positive results in any process compared to general indicators for a certain period of time.
In short, this is the percentage of completed target actions. The target action may mean adding the goods to the cart, visiting a certain page, receiving an application through the feedback form, receiving a lead (going to the website right from the ad), purchasing the goods, etc.
It is necessary to determine the conversion rate in order to evaluate business performance. It often happens that even with high traffic and high store attendance, the number of orders and pre-paid purchases is quite low. This happens because of poorly developed advertising strategies, errors on the web-site, service, or other reasons.
Conversion rate analysis gives you an idea of how your site meets your goals.
The conversion rate should be calculated at any stage of your business - from the business plan drafting up to planning the budget of the advertising campaign. How to calculate conversion rate in retail? First of all, you need to collect qualitative and quantitative data. Thanks to these statistics, you can fix critical indicators and choose a strategy for solving long-accumulated problems.
Before calculating the conversion, determine what type you need. Here are the conversion types:
Below we will discuss how to calculate a conversion rate of different resources.
How to calculate the conversion rate of a target page
This is the ratio of targeted actions made by the user on your site to the total number of visits. The result should be multiplied by 100%.
As you can see, the conversion depends on the goal you aimed to achieve on your site or on any other landing page. In eCommerce, most frequently a primary goal is to sell a product or service.
For example, you want to calculate the conversion from selling mobile phones. If there were 500 website visitors and 15 sold phones per day. Then the conversion will be 15/500 * 100 = 3%.
How to calculate conversion rate email marketing
For this channel, the percentage of successfully delivered emails is measured i.e. the ones that led to sales / retail sales, registrations, or any other specific actions that you aimed to achieve through sending an email.
To calculate the conversion rate, divide the number of recipients who performed the desired action by the number of emails delivered to the recipients. Multiply the result by 100 to get it in percentage.
For example, you sent 1,000 emails, 200 of them returned as undelivered. The number of delivered emails is 1,000 - 200 = 800. Let’s suppose 20 recipients have signed up for your monthly newsletter. Thus, the conversion rate is 20/800 * 100% = 2.5%
Lead conversion rate
This calculation shows the percentage of potential customers among all visitors who visited your site through an advertising link.
For calculating the conversion rate of leads, you should take the number of users who filled out the form, divide it by the number of visitors on your site and multiply it by 100 percent.
For example, thanks to advertising, you succeeded to attract 200 visitors to your website, among which 10 people were potential customers. Then the conversion rate of leads will be equal to 10/200 * 100% = 5%
An online store is a resource where users perform the actions you require (conversions). We have already identified the types of conversions and how to calculate them. Being an online store owner, you need to decide on the goals that you set for yourself and calculate conversions using the above-mentioned formulas.
To correctly calculate the conversion rate, you need to use power tools. At the moment, there is a large number of platforms and services for conversion tracking.
The most powerful and popular analytics tool in the world is Google Analytics. It has many extensions for you to quickly solve very complex problems. You can measure conversion rate with google analytics and track all the steps your client goes through on your site.
If Google Analytics says what’s going on, then Kissmetrics explains who does the action. Kissmetrics is a convenient analytic platform that allows you to track your audience and collect information about it from different devices.
Matomo is an open-source web analytics system with great functionality.
Mixpanel is a web-based platform for mobile analytics and analysis of user behavior in real-time applications.
VWO - is a multifunctional platform with data collection and the ability to conduct A/B tests.
The conversion rate is affected by the following factors: type of business, competition, prices, items of trade, website quality, number of customers.
For most business areas, a good conversion rate is between 3 and 5%. That is, among every 20-30 customers there is just one who is ready to buy goods or services of the company.
Here are the average conversion rate statistics provided by Marketing Sherpa for 25 different business sectors:
There is no universal index for conversion when we can talk about business success. Therefore, the only correct answer to the question “what conversion rate is considered high?” is your own indicator, which is increasing every month.
A phased and stable increase in the number of conversions is an indicator of stable sales growth and business development.
Conversion data on your site is one of the important indicators of online business. Only with the help of these indicators, you can determine the dynamics of your online project and professional growth. Start calculating them now and using them correctly to improve your business every day and to stay afloat.
Do you have any other questions? Don’t hesitate to mail us. Our experts are always pleased to share their knowledge and assist you in your business growth.
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