What Is Conversion Rate?

Date First Published: 27th January 2023

Topic: Web Design & Development

Subtopic: Web Development

Article Type: Computer Terms & Definitions

Difficulty Level: 5/10

Learn more about what conversion rate is in this article.

Conversion rate is the percentage of users that have performed a desired action on a website (a conversion). For example, if 100 people bought a product on an ecommerce website and there were a total of 500 visitors, the conversion rate would be 20%.

Tracking conversion rates is important because it allows the performance of webpages and ads to be measured and identifies areas for improvement. A high conversion rate indicates successful marketing and web design and that people like what the website or ad offers, whilst low conversion rates suggest that the site is making it difficult for people to complete tasks or that the offers are too expensive or not valuable enough for the audience. Conversion rate is an important key performance indicator for online businesses.

How To Calculate Conversion Rate?

Conversion rate can be calculated using this formula:

Number of conversions ÷ Total number of visitors x 100

For example, if 50 people bought a product on an ecommerce website and there were a total of 440 visitors, the conversion rate would be calculated like this:

50 ÷ 440 x 100 = 11.36% conversion rate

A good conversion rate is above 10%. However, the conversion rate of online businesses will constantly change with some only ranging from 2% to 5%.

What Affects Conversion Rates?

The factors that can affect conversion rates include:

• User experience - User experience is a very important factor. The use of whitespace with as little clutter as possible, fast load times, accessible web design, simple navigation, no distracting elements, etc, will improve the user experience. More people will stay on the website, leading to more conversions.
• Call-to-action (CTA) buttons - Having the right call-to-action button with a colour that stands out and one that is easy for the audience to find will increase website conversions. Also, do not use too many CTA buttons as this can cause the user to be unable to decide which one they should use.
• Compatibility - A website compatible with multiple web browsers and devices will increase conversion rate and reduce bounce rate. The fonts should be compatible and the design of the website should be responsive, since lots of users browse using mobile devices.
• Simplified navigation - When people can find what they are looking for quicker, they are more likely to stay on a website, increasing conversions. Always ensure that the navigation is easy to understand and organised.
• The user's interest in the products, services, or offers. Obviously, the more users that are interested in the product or service, the higher the conversion rates will be.
• Payment options
• Delivery times
• Availability of products and services

Difference Between Conversion Rate and Click-Through Rate

The main difference between conversion rate and click-through rate is that conversion rate measures the percentage of the number of people that complete a desired action on a website, such as filling out a contact form, purchasing a product, signing up for a newsletter, or sharing a post on social media and click-through rate measures the percentage of visitors that click on an online ad and are directed to the advertiser's website. Conversions and click-throughs are very different. A conversion is not limited to clicking through an ad and more clicks will eventually lead to more conversions.

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