Conversion rate: What are they used for?

Definition

Conversion rate measures the percentage of website visitors or users who take a desired action, often referred to as a “conversion.”

What is a conversion rate?

Conversion rate is a key performance indicator (KPI) used to evaluate the effectiveness of a website or marketing campaign in achieving its objectives. A higher conversion rate generally indicates that a larger percentage of visitors are taking the desired action. The action could be making a purchase, filling out a form, signing up for a newsletter, or any other goal.

The formula for calculating conversion rate is:

Conversion rate = (Number of conversions / Number of visitors) x 100

Marketers often use conversion rate data to optimise their websites or landing pages. Changes to website design, copywriting, call-to-action buttons, and other elements are made to improve the likelihood of conversions.

Factors such as website usability, page load times, and the overall user experience significantly impact conversion rates. Improving these aspects can positively influence conversion rates. Marketers often conduct A/B testing (split testing) to compare the performance of different variations of a webpage or marketing campaign. Conversion rate data helps determine which variations are more successful in driving conversions.

While a high conversion rate is desirable, it’s essential to consider the quality of conversions. Not all conversions are equal, and marketers may need to assess the value of each type of conversion in relation to business objectives.