# How to Calculate The Conversion Rate

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Digital marketing Blog Ecommerce

The conversion rate is important for any business. This should be done when preparing the business plan, say nothing about active work, especially for using customer attraction channels. The conversion rate has to be increased during this entire period of developing your company.

• How to calculate eCommerce conversion rate?
• How to calculate conversion rate in retail?
• How to calculate website conversion rate?

## What is a conversion rate

A conversion rate is a ratio of target visitors to all visitors. Target actions are buying something, sharing contacts, and taking a survey. The conversion rate can be 0-100%, but it seldom rises or falls to extremes.

For online stores, the conversion rate is a ratio of the buyers to all visitors. So it should be calculated as a ratio of these figures. Making a sale is the main target (both sales online and by phone are considered).

The conversion rate can tell much about the company’s performance. For example, the online store has high usability and SEO; buyers find what they want if it is high. Conversely, a low conversion rate means that visitors seldom become customers.

## How to calculate the conversion rate

Let us discuss the calculator of the conversion rate.

It is easy to do this based on the ratio of visitors who made a purchase or another target action to all visitors. The calculator for this is given below:

Conversion rate (CR) = Cost Per Action (CPA)/Cost Per Click (CPC) x 100,

where CPA is the target actions made by the visitors

• CPC – all visitors
• for converting the result into percent multiply it by 100.

If 500 users visited the website and 35 of them ordered something, the conversion rate will be as follows:

35*100/500 = 7%.

The conversion rate can be used for determining the efficiency of the online store. The company holder should not strive to appear at the top by traffic but boost the sales as high as possible. Unfortunately, high traffic does not always bring a high conversion rate.

## A good conversion rate

There is a dependency between the conversion rate and the profit. Still, when analyzing different online stores, it appears that some websites with a low conversion rate have a higher profit. It mainly depends on the business sphere.

Please note that these data are average. This depends. If the conversion rate of your online store is 2.0% and the average CR of the industry is 2.5%, don’t panic: the conversion rate can be increased. Other figures should also be analyzed (ROI and profit change dynamics for the last few years).

Stores selling music, software, and games have an all-time conversion rate. This is because users who visit them know what they need to buy.

## Why is it critical?

The conversion rate shows the impact of marketing efforts on the profit and online source changes on business efficiency. This is true not only for e-commerce – subscription for mailout can be successful for an informational portal, and signing up or other actions can be successful for a landing page.

This is very important as retail giants enter the e-commerce market; this sphere has an unparalleled growth notwithstanding the crisis.

## Factors that influence the conversion rate

Olena Huk has prepared a video, “What is new in the website UX analysis in 2020 | Usability trends | examples”. We recommend watching it and finding out what should be analyzed and changed on the website. Enjoy!

Online store conversion depends on several factors, both related to the functionality of the internal and external ones. If you realize this, you will be able to improve this performance and improve conversion.

Traffic quality. Users visit websites just for the fun of it, and others open in occasionally forwarded from another website.

Informative value. There are two most common extremes: an excess of graphics, text, and other elements on the website or lack of information. Orders are based on the received data. Remove all elements that can distract the user from studying the fly page is the main target.

Trust of the seller. The final decision by the prospect of whether to make an order or not depends on the reliability and trust of your store. This can be even more important than the price difference. Trust elements include product quality certificates (if provided for the item), test results, detailed contacts of the seller, detailed warranty, and return/refund terms and conditions.

Feedback. This can be considered as the continuation of the next point, but this is not the point. The opinion of other people who own this item can become an additional argument for making the decision, especially if the page contains detailed feedback describing the advantages and drawbacks and some questionable aspects based on the user experience.

Product range. A choice increases the chance that the user will make a target action. The assortment can be extended with the items and supplementary products or accessories, increasing the offer value.

Shipment and payment. Every buyer has their preferences – somebody pays with a bank card, somebody makes an order if there is cash on delivery. The same for shipment: capital dwellers prefer to pay a courier for door shipment, and citizens of small towns prefer using transportation operators or USPS services. We discussed this in the article about shipments from an online store and recommend reading it.

Convenient work. An error occurs when the user is redirected to the shopping cart, and the  “Purchase” button sometimes fails. The inconvenience of use is also a great problem. Sometimes, a user has to fill in many fields for making an order, or the navigation/filters in the catalog are inconvenient. Users hardly want to view thousands of pages to find the needed product. So ergonomic use and the so-called online store usability influence the conversion rate.

If we put all recommendations for boosting sales in one sentence, we will have the following: create an attractive, convenient, and sound website covering the interests and needs of your target audience. Of course, do not forget to work on attracting really good traffic.

## How to increase the conversion rate of an online store

Usability audit. Visitors are interested not only in the target action. Perfect navigation is the key to improving the conversion rate;

Put the updated prices in a prominent position. The information about prices should be clear. If you offer several service plans, describe their peculiarities.

A convenient shopping cart. Add some useful options, showing the list of the added positions when hovering on the area;

Subscriptions forms. The database with the contacts of prospects can be extended. It is recommended to do this with subscription forms unobtrusively placed. Add it in the footer or pop-ups;

Use pop-ups with lead magnets. The pop-up draws attention if it contains a profitable offer;

Develop your blog. Blogging is not the preserve of writers and creative people. Blogs allow showing the new items and approve yourself as an expert;

Organize smart mailouts. This method is suitable for cross-selling and upsales. Notify the users about products related to those they have ordered already;

Convenient search. The search should interpret even some slightly inappropriate keywords and offer the right variants. The search box is usually located in the upper part of the page;

Leave your contacts. If the owner is not anonymous, provides their phone number, messenger links, and the real address, s/he is not likely to be a fraudster;

An elaborate loyalty program. It allows creating the custom kernel. If you stimulate your buyers with discounts and bonuses, they will get used to make purchases;

Optimize the mobile version. A modern lifestyle and advanced technologies allow making orders all over the world if there is an Internet connection;

Use videos. Photos are usually less informative than videos. The latter allows presenting the items better, reviewing, and answering the most frequently asked questions. If a man or a woman appears on the video, this will bridge the gap between your company and the buyer and remove excessive formality.

## Conclusion

Develop proper strategies, strive, experiment, and make conclusions based on the data obtained. There are no universal solutions – they should be found for each certain case.

Soon we will publish new material about the methods of increasing the conversion rate for an online store. So be the first to check this out!

Article by:
CEO Andrew Chornyy

CEO Plerdy — expert in SEO&CRO with over 11 years of experience.