how to calculate conversion rate

How to Correctly Calculate Conversion Rate: 3 Easy Formulas to Use

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Measure Everything When It Comes To Sales and Marketing

Measuring results is critical to business growth and development – with the right data, you can make your sales and marketing processes more efficient while empowering your whole team to sell more. It can be tricky to figure out what numbers are most important, but one number is especially critical to your company’s success: your conversion rate.

Know How To Calculate Conversion Rates

Knowing how to calculate your conversion rate is a crucial piece of information for digital marketers. Your conversion rate is a measure of your marketing effort’s success, after all.  How do you calculate a conversion rate? Fortunately, calculating conversion rates isn’t hard with the right conversion rate calculation formulas – and with the right information, you can even optimize your conversion rate to make your marketing campaigns more powerful.

 

Conversion Rate Optimization (CRO) Calculator

If you want to find out how much additional profit you can make from CRO, we provide a simple, yet powerful, free online CRO calculator to help you set profit improvement targets.  It has many uses, for example, you can calculate ecommerce conversion rate improvement effects on profit.

 

Run Conversion Rate  Profit Improvement Calculator

 

How to Calculate Your Conversion Rate: What Is a Conversion Rate?

Simply put, your conversion rate is a percentage of how many conversions (or sales) you’ve had from a marketing campaign thus yielding a campaign conversion rate. You can calculate sales conversion rates across multiple marketing channels, including:

Email campaigns: Email conversion rates let you know how many people have become new customers as a result of email campaigns you’ve sent out.

Paid advertisements:  Calculating advertising conversion rates for paid ads – either through a site like Google or social media channels – tells you how many new customers you gained from these services.

Social media: The conversion rate for social media channels can give you a broad idea of how many people you’ve converted, or you can dive into the individual channels for better insight.

Social media and email campaign performance metrics can be easily checked with the right marketing tools – even social media platforms have their own free-to-use analytics tools. However, knowing how to calculate the conversion rate of any channel is an important skill. You may want information that is more detailed than what your marketing tools provide.

Calculating conversion rates and calculating conversion values for paid ads is the best way to find out if they are working. With a few simple conversation rate formulas, you can calculate conversion rates for various sales situations in your organization.

How to Calculate Your Conversion Rate: 3 Easy Formulas to Improve Your Marketing Efforts

Every business has different sales goals and marketing budgets, but these conversion calculation formulas offer simple methods to determine a variety of conversion rates you may want to calculate.

Google Ads Conversion Rate Formula

If you just want a basic formula for understanding how many conversions come from ads, Google has the most simplistic approach to measuring your overall conversion rate:

Number of conversions / number of total ad interactions = Ad conversion rate

You can make this formula more insightful by applying more specific criteria to it. For example, you could calculate the number of conversions in a specific state or compare conversions to ad interactions that happened during a specific time of day.

Ecommerce Conversion Rate Formula

Ecommerce stores are in a unique position to leverage their conversion rates and calculating them is relatively easy if you have access to the right date. The best formula for ecommerce conversions is:

Total ecommerce transactions / total visits to ecommerce site = Ecommerce conversion rate

This formula can be manipulated to give you other information about your ecommerce conversions. You could calculate conversions for specific products or product categories, or you could go further by determining how many transactions came from specific marketing channels.  You could also calculate website conversion rates overall.

Landing Page Conversion Rate Formula

Landing pages can be critical components of a marketing campaign. They can boost sales for new products or offer valuable information that leads to sales. A simple way to calculate this is:

Number of landing page conversions / number of visits to landing page = Landing page conversion rate

With a landing page, you have a lot of control over how people get to your site. You can calculate conversions from people who got to your landing page from an email campaign and you can understand how many new customers came from paid ads or social media campaigns.

How to Calculate Your Conversion Rate: Practical Tips for Conversion Rate Optimization

Knowing your conversion rate is just the start – your conversion rate can guide your marketing efforts and sales strategies. A fundamental goal of every marketer should be to increase your conversion rate. That means you need to optimize your conversion strategy.

The average Google AdWords conversion rate for all industries is 3.75% for searches and 0.77% for display ads, but conversion rates vary from industry to industry. Dating companies, for example, have the highest conversion rates at 9.64% while real estate has the lowest at 2.47% -- a significant difference.

Regardless of your industry, use these practical tips to optimize your conversion rates:

List segmentation: Segmenting your email lists can lead to better conversion rates – with segmentation, you’re getting the right message to the right person. Incorporate personalization and a compelling CTA to boost the conversion potential.

Target marketing: Improving your ad conversion rates requires you to target your customers more effectively. That means you need to analyze your customer data and pinpoint characteristics that make up your most frequent buyers. Surveys can help you understand your customers, as well.

Multichannel approach: When you’re launching a new product or landing page, use a multichannel approach to boost your conversion rates – social media, email campaigns, paid advertisements, landing pages, and blogs. This will increase the number of people who see your campaign.

Conversion rate optimization simply means you want to increase the number of conversions you get from a specific marketing interaction or campaign – you want to make your marketing campaigns more efficient.

Why Conversion Rate Optimization Is Critical to Your Business

Your conversion rate is a measure of how successful your marketing efforts are. Do your ads convert enough new people to make them worth the investment? Are your email campaigns generating new business or falling stagnant? You want your marketing campaigns to make an impact. They need to grow your business.

Conversion rate optimization is a crucial component of making your business more efficient and knowing how to calculate your conversion rate is the first step in optimizing your campaigns.  Successful CRO depends upon fast, easy, consistent, reliable measurement.  We've made it easy with our online CRO Profit Improvement Calculator.

 

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Lonnie Ayers

About the Author: Lonnie Ayers is a Hubspot Certified Inbound Marketing consultant, with additional certifications in Hubspot Content Optimization, Hubspot Contextual Marketing, and is a Hubspot Certified Partner. Specialized in demand generation and sales execution, especially in the SAP, Oracle and Microsoft Partner space, he has unique insight into the tough challenges Service Providers face with generating leads and closing sales using the latest digital tools. With 15 years of SAP Program Management experience, and dozens of complex sales engagements under his belt, he helps partners develop and communicate their unique sales proposition. Frequently sought as a public speaker in various events, he is available for both inhouse engagements and remote coaching.
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He also recently released a book "How to Dominate Any Market - Turbocharging Your Digital Marketing and Sales Results", which is available on Amazon.

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