What is a Conversion Rate

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Diagram representing the sales funnel_CardinalCommerceA conversion rate is one of the most helpful pieces of information for determining the effectiveness of your online business. In marketing your company and understanding whether your work is successful, you don’t need to focus on every number — just the right ones. It’s not difficult to understand the conversion rate or calculate it, and the resulting information can be especially useful for your online business.  

The Definition of Conversion

Conversion in business terminology refers to the event when a person who visits your website takes a desired action towards connecting with your business. You, the business owner, create the actions that would help site visitors take the next step. Determine what is important for building your customer base: Do you want them to register on your site? Submit email or contact info into your system? Like your social media page? Or download your product? When an individual completes one of these actions online, and moves from being just a site visitor to being involved at a more connected level with your company—this is called a “conversion.”

Computing the Conversion Rate

What is a conversion rate? The rate itself is computed by simple division. Your business needs to track two numbers in order to discover your conversion rate: the number of conversions and the total number of visitors to your website. To compute a conversion rate, divide the number of conversions by the total number of visitors. For example, if 1000 people visit your site, and 20 of them choose to sign up for your newsletter, your conversion rate is 2 percent. Why is this number valuable? It tells you whether or not that particular online action is successful or not.

Calls to Action

The term “call to action” (CTA) refers to the online spot where the visitor can click a button to complete the desired action to connect with you. Creating these buttons, forms, fields, or info spots is an important step towards conversions. If a visitor comes to your site, but can’t progress any further for additional info, that visitor will likely disappear. A CTA (such as a “Download” or “Create a Login” button) makes site visitor conversions possible. Create a form with clear directions or a simple labeled button where visitors can click to connect. That CTA will allow visitors to submit info to you or get info from you.


Measuring Profitability

How successful is your online business? If your website presently tracks visitors but not conversion rate, you are missing out on a helpful measure of customer experience with your online business. Taking the time to create CTAs and compute and track your conversion rate can yield valuable data for your company.

Back to Customer Engagement

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