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What is Conversion Rate?

Learn all about digital marketing, we have built this glossary to help you understand everything to thrive in online marketing and promoting your website or business.

What is Conversion Rate?
In the realm of digital marketing, a 'conversion' occurs when a visitor to your website completes a desired action. This could involve making a purchase, subscribing to a newsletter, or filling out a form, amongst other things. The conversion rate is the percentage of total website visitors who perform these desired actions.
The formula for calculating conversion rate is pretty straightforward. You simply divide the number of conversions by the total number of visitors, and then multiply the result by 100 to get your conversion rate percentage. For instance, if you have 50 conversions from 2000 visitors, your conversion rate would be 2.5%.
Conversion rates are incredibly crucial for businesses, as they give a clearer understanding of how effective your website or marketing strategy is at driving desired consumer behaviour. A high conversion rate is indicative of successful marketing and web design, appealing to customers and driving them to take action.
Conversion Rate's Role in Digital Marketing
In the landscape of digital marketing, the conversion rate serves as a vital metric. It reveals how proficient your brand and website are at motivating visitors to perform specific actions that contribute to your business goals. These actions transform casual visitors into potential leads and then into paying customers, thereby directly influencing your bottom line.
A higher conversion rate equates to a better ROI. Your return on investment magnifies because you're making more of each visitor, efficiently achieving more conversions without increasing your traffic. This highlights the effectiveness of your digital marketing efforts.
Maintaining a good grasp on your conversion rate offers essential insights for future strategy planning. By discerning which segments of your digital marketing strategy yield the highest conversion rates, you can optimize your efforts and budget accordingly to produce the best outcomes.
Conversion Rate Examples
In eCommerce, a strong example of conversion rate comes from companies tracking the percentage of website visitors who complete a purchase. For instance, if 1000 people visit an online store, and 20 end up buying something, the store's conversion rate is 2%.
Similarly, another prevalent example can be seen in the context of Email Marketing. Here, the conversion rate is generally determined as the percentage of email recipients who click on a link within an email and complete a desired action, like filling out a subscription form or making a purchase.
A different scenario features a blog aiming to increase its subscriber base. Here, the conversion rate might be determined by the number of visitors who sign up for the blog's newsletter. For instance, if a blog gets 5000 visitors in a month and 250 sign up for the newsletter, the blog conversion rate would stand at 5%.