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How To Calculate Conversion Rates

Every marketing campaign you create is attached to a conversion goal. This goal is simple: get audiences to do something. There is some action or step that you hope your marketing audiences will perform.

If you advertise for a pair of shoes, you hope customers click and then purchase the product. If you sponsor a post about a seminar, your conversion goal is to acquire sign-ups or reservations for this event.

Your conversion rate is a measure of how successful your marketing efforts are at getting customers to complete this desired action. It is a critical measure that needs to be fully understood by marketers.

What Is Conversion Rate?

First, it is important to fully break down the definition of conversion rate. As mentioned, it can be a measure of how effective your marketing strategies are. More specifically, however, it is a ratio of what percentage of your website visitors perform the desired conversion action.

What Is A Conversion Activity?

Just about anything that supports your business goals can be considered a conversion activity. Here’s a brief list of common conversion activities that businesses use marketing to support:

  • Buying a product
  • Scheduling an appointment
  • Signing up for a subscription
  • Submitting contact details
  • Calling
  • Downloading (eBooks, apps, software, etc.)
  • Attending a seminar or event

This is just a small sample of conversion-related actions.

How To Calculate Conversion Rates

Your conversion rate is a relatively simple ratio. To calculate, you divide the number of conversions by the total number of people that visited your website page in the given period.

For instance, if your site had 4,000 visitors in the month and 200 conversions, then your conversion equation is:


Thus, your conversion rate for this example is 5%.

It’s important to measure conversions within a specific time frame. In the example above, conversions were being analyzed for a single month.

Types Of Conversion Rates

Not only are there different types of conversion activities, there are also different ways to apply conversion ratios. In other words, you can analyze conversion ratios at different degrees of specificity.

For example, your overall conversion rate is the broadest measure that looks at how your website converts traffic from any source. Alternatively, businesses can analyze traffic from a single source, which allows that company to determine which channels are most effective.

You can even analyze conversion rates based on landing page, keyword, ad copy and campaign. Similar to analyzing conversions based on marketing channels, these strategies allow you to compare different conversion rates and see which landing page, keyword, etc. performs best.

Again, conversion rates allow you to measure how well your marketing is working. That can be applied at any level, even as small as keyword performance!

What Is A Good Conversion Ratio?

Conversion rate averages are influenced by a number of factors. So, the answer to what is a good conversion ratio is that it depends. The size of your business, your ad budget, industry, products, location and many other factors affect conversion rates.

While there are some benchmark averages available on the Internet, the best way to determine a good conversion ratio from a bad one is to look at your own data.

When analyzing your conversion rates, there are a few things to keep in mind. First, conversion rates can vary greatly based on different products or services. Some of your offerings are just going to be more enticing than others.

Second, remember that conversion rates are not the end-all-be-all measure. Sometimes, you can have high conversion rates, but if the activity isn’t sales-focused, you may not be creating revenue.

The Importance Of Conversion Rate Tracking

Before you can begin analyzing your conversion data and measuring the success of your marketing strategies, you need to properly install conversion tracking. The emphasis on ‘properly’ is key because, for every business that neglects to enable conversion tracking, there is at least one more that has it incorrectly set up.

Arguably, the latter is even more damaging because accuracy is so crucial when making decisions about conversion rates. If your conversion tracking is improperly installed, then you may be seeing skewed performance data that can lead to bad decisions.

The reason that so many marketers fail to enable conversion tracking correctly is because it is difficult to install. A lot can go wrong with inputting this script into your web pages. And, if your conversion goals or activities change, then your tracking also needs to change.

You may want to enlist the help of a developer to handle this step in the process!

Improving Conversion Rates

You’ve calculated your conversion rates and found that some of your campaigns or strategies are producing subpar conversion rates. How can you improve these efforts to produce more conversions?

Optimize Your Landing Pages

When it comes to converting traffic to conversion, landing pages are incredibly important. These are the pages you’ve specifically designed to encourage website traffic to convert. If your landing page experiences are lacking, then visitors won’t feel compelled to complete the desired action. They are more likely to click away and return to the previous page.

Target The Right Audiences

Conversion rates can sometimes be low because your marketing messages are falling on deaf ears. These irrelevant audiences have very little interest in converting, no matter how good your marketing copy, landing pages or call-to-actions are. If you’ve adjusted these other tactics and still aren’t seeing good conversion rates, it may be best to remove these audiences from your targeted list.

Test Repeatedly

Since conversion rates are so dependent on your own business, there is no universal secret sauce that can be applied to any marketing strategy and magically cause conversion metrics to skyrocket. Instead, businesses need to test their own theories about how to adjust their marketing to increase conversion rates.

Often, this means producing two variants of the same landing page or marketing message. Then, analyzing which one performs best. Running these types of tests will help you understand how and why some people convert and others don’t. Then, you can apply those insights to improving conversions.

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