Conversion Rate

The percentage of store visitors who make a purchase, calculated by dividing the number of transactions by the total number of visitors.

What is a Conversion Rate?

Conversion rate is the percentage of website visitors who take a desired action. It measures how effective a website or marketing campaign is in turning visitors into customers. A higher conversion rate indicates better performance. Conversion rate optimisation focuses on improving this metric by analysing user behaviour and implementing strategies to increase conversions. It's an important metric for evaluating online success.

How a Conversion Rate works

  • Definition: Conversion rate is calculated by dividing the number of conversions (desired actions) by the total number of visitors and multiplying it by 100 to get a percentage.

  • Importance: Conversion rate is a critical metric for businesses as it indicates the effectiveness of their website or marketing efforts in driving desired actions. A higher conversion rate means more visitors are taking the desired action, leading to increased sales, leads, or other valuable outcomes.

  • Optimisation: Conversion rate optimisation (CRO) involves strategies and techniques to improve the conversion rate. It involves analysing user behaviour, identifying barriers to conversion, and implementing changes to the website design, messaging, or user experience to encourage more conversions.

  • Factors affecting conversion rate: Various factors influence conversion rate, including website design, navigation, page load speed, mobile responsiveness, persuasive content, clear call-to-actions, trust signals, and a seamless checkout process. Understanding user preferences and addressing their needs and concerns can help increase conversions.

  • Tracking and analysis: Conversion rate can be tracked using analytics tools that provide insights into visitor behaviour, conversion funnels, and conversion sources. Continuous monitoring and analysis of conversion rate data help identify trends, patterns, and opportunities for improvement.

  • Benchmarking: Conversion rates can vary across industries, channels, and devices. Benchmarking against industry averages or competitors can provide insights into performance and identify areas for improvement.
Remember, a high conversion rate is desirable, but it's important to consider other metrics like average order value, customer lifetime value, and overall business goals to get a comprehensive understanding of performance and success.

Pros of Conversion Rate

  1. Performance measurement: Conversion rate provides a clear and quantifiable measure of how effectively a website or marketing campaign is converting visitors into desired actions. It serves as a key performance indicator (KPI) to assess the success of marketing strategies and website optimisation efforts.
  2. Optimisation insights: Conversion rate analysis helps businesses identify areas for improvement in their website or marketing funnel. By tracking conversion rates at different stages of the customer journey, businesses can pinpoint bottlenecks, optimise user experience, and implement targeted strategies to increase conversions and maximise return on investment.
  3. Decision-making and resource allocation: Conversion rate data enables informed decision-making and resource allocation. It helps businesses understand which marketing channels, campaigns, or website elements are driving the highest conversion rates. This information can guide budget allocation, marketing spend, and resource allocation towards the most effective strategies, ultimately enhancing overall business performance.

Cons of Conversion Rate

  1. Limited scope: Conversion rate alone does not provide a comprehensive view of customer behaviour and engagement. It focuses solely on the percentage of visitors who complete a desired action, such as making a purchase or filling out a form. It doesn't capture other valuable metrics like average order value, customer lifetime value, or customer satisfaction, which can provide deeper insights into overall business performance.
  2. Lack of context: Conversion rate doesn't always provide the full context behind visitor behaviour. It doesn't reveal why visitors may not be converting or what barriers they may be facing. Understanding the underlying reasons for low conversion rates requires additional qualitative and quantitative analysis, such as user surveys, usability testing, or website analytics, to uncover specific issues and opportunities for improvement.
  3. Benchmarking challenges: Benchmarking conversion rates can be challenging due to industry-specific factors, target audience characteristics, and business models. Conversion rates can vary significantly across different industries, product categories, and customer segments. It's important to consider these nuances and establish appropriate benchmarks to accurately evaluate and compare performance against relevant peers or competitors.


Below you will find answers to common questions
How can I improve the conversion rate?
Improving conversion rate involves a combination of optimising various aspects of the customer journey. Some strategies to consider include:

  • Enhancing website usability and user experience to make it easier for customers to navigate, find products, and complete purchases.
  • Streamlining the checkout process by minimising steps, reducing form fields, and offering guest checkout options.
  • Providing clear and compelling product information, including images, descriptions, and customer reviews, to help customers make informed purchasing decisions.
  • Offering incentives such as discounts, free shipping, or limited-time promotions to encourage customers to take action.
  • Implementing remarketing campaigns to target and re-engage with potential customers who have shown interest but haven't yet converted.
How does the conversion rate compare to industry benchmarks?
Benchmarking your conversion rate against industry standards can provide insights into your performance relative to competitors or peers. While benchmarks can vary by industry and business model, you can use industry reports, studies, or online resources to get a general sense of average conversion rates. For example, if you operate an e-commerce store, the average conversion rate might range from 2% to 5%. However, it's essential to consider factors such as your target audience, product category, and business model. Direct competitors or similar retailers within your niche can also serve as useful benchmarks for comparison.