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What is conversion rate? Definition and meaning

The conversion rate in the world of websites and e-commerce refers to the percentage of visitors who take a desired action such as filling in a form, voting in a petition, responding to a survey or questionnaire, subscribing to a newsletter, becoming a member, downloading software, buying a product, or requesting a free sample.

It forms part of ‘conversion marketing’ – the act of converting website visitors into paying customers or getting them to do what you wanted them to.

The term may also be used to measure the proportion of visitors to a page who click on banner ads. The total number of visitors is divided by the number of ad clicks. For example, if a web page received 1,000 visitors of which 50 click on an ad on that page, the conversion rate is 50 ÷ 1,000 x 100 = 5%.

Conversion RateIf one in every twenty visitors to a web page buys something, the conversion rate is 5%. Conversion may also refer to what proportion of visitors complete a form, add their signature to a petition, telephone for more information, become a member, subscribe, etc.

According to WordStream:

“Conversion rate is defined as the number of visitors to a website that complete a desired goal (a conversion) out of the total number of visitors. A high conversion rate is indicative of successful marketing and web design.”

Several factors determine whether conversion rates are high or low, including:

The appeal of the offer: an offer’s attractiveness depends on how effective the value proposition is and how well it is presented. In most cases, impulse items have greater conversion rates than larger products.

The website’s ease of use: the site needs to have intuitive navigation, clear explanations and instructions, and pages that load rapidly.

Conversion Rate OptimizationIt is not enough just to attract visitors. The online business also needs to find a way to sustain visitors’ time on the website and move them down the sales funnel.

Visitors’ interest levels: the Internet marketer’s aim is to match the right visitor, at the right time, and at the right place in order to achieve optimum conversion rates.

How much competition there is: if your offer is unique, your conversion rate will be greater than a website that has to compete with several others.

Generating offline responses

For websites than aim to generate offline responses, such as telephone calls or human visits to a physical store, measuring conversion rates is not so easy, because a personal visit or phone call cannot automatically be traced to its source, which may have been a referral, the telephone directory (Yellow Pages) or a website.

Companies can overcome this problem by asking each visitor to the physical store or telephone caller how they heard about the business, or offering a toll-free number that is linked only to inquirers from its website.

Where the response occurs within the website itself, a conversion funnel can be included in the site’s analytics package to track visitor behavior.

Conversion Rate Optimization (CRO), also called conversion optimization, is a system in Internet marketing for increasing the percentage of visitors to a website that convert into customers or people who take any desired action.

Conversion rate for currencies

Conversion rates may also be used in currencies to express the ratio at which one currency may be exchanged for another.

For example, a conversion of pounds sterling to US dollars of 1.32 means that £1 can convert to $1.32.

If a currency has a high conversion rate in relation to another it means that we can ‘buy’ more units of the other.

Video – What is a website conversion rate?

In this video, co-founder of Omega Vortex – Jeremy Privett – gives a high-level overview of what a site’s conversion rate is and why it is important to track.