Among the terms most frequently used in e-commerce contexts is conversion rate, and one question I’m often asked is how to calculate the conversion rate for an online store.
That’s what we’ll take a closer look at in this post.
First and foremost, the conversion rate refers to the percentage of visitors to your online store who take a desired action. This could be, for example, the percentage of your visitors who make a purchase, sign up for a newsletter, or click on a specific page on your site.
The conversion rate is expressed as a percentage and can be calculated as follows:
How to calculate conversion rate
(Number of conversions (e.g., number of orders) / number of visitors) * 100% = conversion rate
And to provide a concrete example with actual numbers:
(250 orders / 10,000 visitors) * 100% = 2.5% – a conversion rate of 2.5%
Several tracking tools, such as Google Analytics, can now calculate your conversion rate for you, providing you with an overview of how many visitors are converting into customers on your online store.
Conversion rate and conversion optimization go hand in hand
When discussing conversion rate, one cannot avoid the concept of conversion optimization. This refers to the desire to improve the percentage of visitors who ultimately become customers.
Conversion optimization is an ongoing process aimed at improving aspects of your online store to keep it relevant for visitors. It’s essential to set some goals for your store and, based on those, dive into the data you’re presented with. In other words, how can you optimize your online store based on the information available to you?
Within conversion optimization, A/B split testing is often used, where different versions of the same website are tested to determine which version performs the best. These tests can include both minor and major changes to your website – the key is to change only one variable at a time in order to obtain useful data on that particular aspect you’re testing.
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