When e-commerce store owners discuss their most important marketing metrics, conversion rate is almost always near the top of their list. That’s with good reason—the number of people who visit your online store and make a purchase is crucial for a store’s success. But improving it is easier said than done. It’s important to understand how to calculate it, how to improve it, and what factors inform what a good conversion rate for you is.
What is a conversion rate?
Conversion rate is calculated by dividing the number of conversions by the total number of interactions or visits to your store, expressed as a percentage.
Store owners consider it to be highly important because it affects the return on investment (ROI) of all your other marketing efforts. Whether a potential customer visits the site from a social media campaign or Google Ad, a higher conversion rate means you’ll see a bigger return on those campaigns. Assuming your traffic stays the same, if your store can convert 2% of website visitors instead of 1%, your revenue doubles.
Conversion rate formula
Total conversions
This is the number of desired actions completed by visitors on your store.
Total visits to your website
This represents the overall number of visitors who have accessed your store within a specific time period. It includes all the interactions and sessions on your store, regardless of whether a conversion occurred.
By dividing the total conversions by the total visits to your store, you can calculate the conversion rate, which indicates the percentage of visitors who converted or completed the desired action.
