Conversion Rate

What is Conversion Rate?


When visitors reach an online store, some of them will purchase products or services. Others will choose to go somewhere else on the Internet. If you count all of your traffic as a 100% metric, the conversion rate is the percentage of the total that decided to buy something.
The conversion rate measures a company’s performance during an advertising campaign. Although it is possible to gather this information during in-person shopping, most businesses use it for their online outreach efforts. 
Cost-per-click (CPC) advertising and the click-through rate(CTR) describe the conversion rate metric's first step. When a company know show many people click on their ads, the incoming traffic levels serve as the foundation for this information.
 If an e-commerce platform has four people out of 100 make a purchase, that means their conversion rate would be 4%. 
Since most websites have more visitors than 100 per day, the mathematics expands to whatever traffic levels they achieve. If the company gets 10,000 visitors daily with 400 sales, they'd still earn the 4% conversion rate.
A conversion rate often tracks sales, but it can also monitor specific visitor behaviors. Companies can designate a business call, form submission, subscription signup, or site registration to get tracked by this metric.

‍Takeaways of Conversion Rate

  • It offers numerous metrics to consider. When tracking conversion rate information, businesses can be as narrow or broad as they wish when determining what performance to examine.
  • Companies can maximize their investments. If a business tracks the specific conversion rates tied to keywords in theirCPC advertising, they can gain insights on what ones deserve a bigger budget.
  • It can identify creative weakness. When brands test different advertising efforts against each other, the conversion rate can be one metric that determines which ad copy performs better. It can also track qualified traffic to understand where the best prospects originate. ## Understanding Conversion Rate  Conversion rate metrics operate on a large scale. If a business converts four people out of 100, that information isn’t enough to understand a trend. It’s entirely possible that someone in that group had an accidental conversion. When companies get 10,000 or 100,000 people as a sample, the data becomes more dependable.  The one metric that a conversion rate doesn’t track involves multiple sales from the same individual. Companies that get numerous repeat customers might opt to follow their “click conversion rate” instead.
More Terms

You Might Also Like

This is some text inside of a div block.

Fulfilled by Merchant (FBM)

What is Fulfilled by Merchant (FBM)?

Fulfillment by Merchant (FBM) is a method of fulfilling orders in which a third-party seller handles all aspects of the order fulfillment process, including storage, picking, packing, and shipping.

This is some text inside of a div block.

3rd Party Logistics (3PL)

What is 3rd Party Logistics (3PL)?

A 3PL, or third-party logistics provider, is a company that offers outsourced logistics services to businesses that need to manage their supply chain operations more efficiently.

This is some text inside of a div block.

Search Engine Optimization (SEO)

What is Search Engine Optimization (SEO)?

Search Engine Optimization (SEO) is the practice of optimizing a website or web content in order to increase its visibility and ranking in search engine results pages (SERPs).