What is a Conversion Rate?
The percentage of user actions taken after total clicks on a display ad or other digital asset. Your marketing plan defines your actions, commonly including clicking on a second link, downloading an asset such as a B2B (business-to-business) white paper, or signing up to receive special retail offers. The formula is clicks/actions = conversion rate. The higher your conversion, the more successful your campaign.
Example
For example, suppose a website receives 1,000 visitors in a month, and 50 of them make a purchase. The conversion rate would be calculated as follows:
Conversion Rate = (Number of Conversions / Total Number of Visitors) * 100
Conversion Rate = (50 / 1000) * 100
Conversion Rate = 5%
The website’s conversion rate in this example is 5%. This means that 5% of the website visitors completed the desired action: making a purchase. A higher conversion rate indicates that more visitors are taking the desired action. In comparison, a lower conversion rate may suggest improvements to the website or marketing strategy to better engage visitors and convert them.