Conversion rate

What is the conversion rate?
How to calculate the conversion rate?
Why is the conversion rate important?
How to track the conversion rate?
How to interpret the data?
How to improve the conversion rate?

What is the conversion rate?

The conversion rate (CR) represents the share of users who have completed a specific target action on a website out of the total number of its visitors. This action can include registration, subscribing to a newsletter, filling out a form, or making a purchase. CR is an important metric in advertising and internet marketing, as it allows for evaluation of the effectiveness of customer acquisition. However, this metric can also be applied in offline settings, for example, to determine the number of buyers in a store relative to all its visitors or to assess sales conversion based on customer inquiries to the company.

Unlike click-through metrics, which only show user interest, the conversion rate demonstrates what percentage of traffic actually achieves the business goals set. For instance, on the Unisender website, the main target action is registration, and CR helps determine what percentage of visitors registered over a specific period.

How to calculate the conversion rate?

The formula for calculating the conversion rate is as follows:

CR = (Number of visitors who completed the target action / Total number of visitors) × 100%

Let’s consider an example: if a cleaning service website received 3,000 visitors in a month, and 300 of them ordered a cleaning service, we will calculate the conversion rate:

CR = (300 / 3000) × 100 = 10%

In this case, the CR is 10%, which means that 10% of the website's visitors not only showed interest in the offer but also utilized the service. Conversion can be calculated for all traffic as well as for individual channels, such as through email campaigns. This allows for the analysis of sales funnels, determining CR at each stage.

Why is the conversion rate important?

In internet marketing, the conversion rate serves as an indicator of the effectiveness of both the website itself and its traffic sources. Understanding CR allows for the assessment of how well targeted traffic is being attracted from each source. For example, if an advertisement shows high click-through rates, but CR remains low, this may indicate that visitors are not interested in the product. In this case, attention should be given to improving the website.

For example, if 500 people subscribed through a form on the website in a month, but the total number of visitors was 100,000, then the CR would be 0.5%. This signals the need to refine the form or use other tools to attract subscribers. Similarly, the effectiveness of the website can be evaluated based on any target action, such as the number of purchases or requests for a callback.

Additionally, the conversion rate helps assess the return on investment. Knowing the total budget spent and the number of conversions, one can calculate the cost per customer and track CR dynamics. For instance, if a website spends 200,000 rubles on content, and the number of conversions is 1,000, then CR will be 2%, and the cost per conversion will be 200 rubles.

How to track the conversion rate?

If the project is small and the number of target actions is limited, the conversion rate can be tracked manually by collecting data on visitors and orders. However, as the volume of data increases, there arises a need for specialized tools. In the online space, CR is usually tracked through analytics systems, such as Yandex Metrica, which allows for the analysis of conversion at various stages. It is important to remember that the service by default evaluates the rate based on sessions rather than unique users.

To track CR, it is necessary to set up goals and conditions for achieving them in the chosen analytics system, which will record task completion and calculate the metric's value. The results can be viewed in system reports, such as the "Conversions" report in Yandex Metrica. In some cases, more complex systems may be required, such as call tracking or CRM systems.

How to interpret the data?

It is essential to consider the quality of the data and correctly interpret the results of the CR calculation. For example, if the conversion to registration is 100%, but only one person visited the target action page, this result cannot be considered successful. In another example, on a B2B website, the CR for purchases is 2% of the total traffic of 10,000 visitors. This may seem low, but in reality, it equates to 200 people, which is an excellent result given the high transaction amount.

To obtain more accurate results, one can assess CR not as a single number, but within a confidence interval. For instance, if based on 1,000 visitors you determined that the conversion is 1%, then with 95% probability, the actual conversion will be between 0.38% and 1.62%. This approach helps to evaluate the results more accurately.

How to improve the conversion rate?

To increase the conversion rate, it is necessary to track user paths and identify the stages where they "drop off." After that, it is essential to address shortcomings, such as improving the website, refining advertisements, or replacing ineffective channels. It is also important to pay attention not only to the text but also to the design and usability of the site, to convey information to the user in a clear manner and encourage them to take action.