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How to Calculate Ecommerce Conversion Rate? All Formulas Included!

Oliver Kenyon
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January 23, 2024
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Wondering how to calculate ecommerce conversion rate? What if I told you that it’s actually quite simple?

Businesses of all sizes are always looking to improve their conversion rates – but they don’t necessarily have the time, knowledge, or resources to do so. Most of the time, businesses don’t even know where to start when it comes to tracking their exact conversion rates.

Fortunately, you can take some simple steps to start tracking your conversion rates on e-commerce websites. With the right tools and a bit of knowledge, it’s possible to understand exactly where your conversion rates are at and how you can tweak them to perfection.

Remember, each niche, website, platform, and product has a different conversion rate. You can’t expect your conversion rates to be the same as those of another business. That being said, you should understand that there are certain factors that you can control.

For starters, you need to identify a few key performance indicators (KPIs). These are measurable metrics that can be tracked and adjusted to help improve your conversion rates.

If you’re looking for tips on how to improve your conversion rates, check out this article! In it, you’ll find some simple ways to track and improve your conversion rates on e-commerce websites.

 

Now, let’s focus on the first thing.

What is a Conversion?

Conversion is a term used to describe the transformation of an individual from a visitor into a customer. A conversion can refer to any goal that you want to achieve with your website, including:

  • Converting visitors into leads by getting them to sign up for your mailing list
  • Converting visitors into customers by getting them to purchase from your online store
  • Converting visitors into advocates by getting them to refer others to your website
  • Converting visitors into subscribers or followers by getting them to subscribe to your blog, social media page, or another content site
  • Converting visitors into action by getting them to complete a specific task on your site, such as signing up for a webinar or submitting a form

Why is it Important to Measure Conversion Rates?

Hundreds of articles could be written about why it’s important to measure conversion rates. There are so many benefits to having accurate conversion rate data:

1) Monitor your marketing strategy:

Knowing your conversion rates can help you understand which of your marketing efforts are working and which need to be tweaked or improved. You can understand it like this: a high conversion rate means that your marketing strategy is effective and you should continue to pursue it, while a low conversion rate means that you may need to look into other options.

Example:

If you’re running a PPC campaign, your conversion rate can help you decide which keywords or ads are effective and which ones should be modified. When you have accurate conversion rate data, you can make better decisions about where to invest your marketing budget and adjust your strategy accordingly.

2) Make better business decisions:

Knowing your conversion rates can help you make better business decisions. You can use the data to understand what’s working and what’s not, and make changes to improve your overall business results.

Example:

Have you ever wondered if a new feature on your website would increase conversions? With the right data, you can test it and see how it affects conversion rates. This allows you to make informed decisions about features, products, and services. An e-commerce site, for example, could use conversion rate data to inform product development decisions.

3) Identify problems:

Ecommerce is all about trial and error. Knowing your conversion rates can help you identify problems with your website or product and find solutions. You can use the data to understand where potential customers are getting stuck or why they’re not making a purchase.

Example:

If you notice a sudden drop in conversion rates, you can investigate the cause. Did something change on your website? Did customer service drop off? Did competitors launch a better product? The answers to these questions can help you understand what’s causing the drop in conversions and how to fix it.

4) Increase revenue:

One of the most obvious benefits of measuring your conversion rates is that it helps you increase your revenue. When you know which areas of your website are underperforming and which ones are performing well, you can make changes to increase conversions.

Example:

If you notice that visitors are not purchasing after viewing specific product pages, you can analyze the layout of those pages and make changes to improve their effectiveness. You can also experiment with pricing or promotional offers to increase conversion rates.

Now, you know how important it is to measure conversion rates. Now, moving forward, let’s see the essential steps to calculate and measure your conversion rate.

Essential Steps to calculate the conversion rate

How to calculate the rate? Here are some simple steps that you can take to start tracking your conversion rates on e-commerce websites:

  • Get the number of website visitors and the number of conversions that occur on your site.
  • Get the number of conversions that occur with a specific goal, such as a purchase or sign-up.
  • Use the ecommerce conversion rate calculator by ConversionWise to calculate your conversion rates.
  • Analyze the results and identify potential areas for improvement, such as improving your design or checkout process, offering more engaging content, or offering better customer support.

Check this screenshot for the ecommerce conversion rate calculator by ConversionWise:

Check how just a 1% addition in conversion rate can fetch you an additional revenue of $90000. This is just a 1% addition, and you can imagine the potential benefit of your website having a higher conversion rate. Well, to calculate your exact conversion rate, it is advisable to use an ecommerce conversion rate calculator.

What is considered a good conversion rate?

There is no single answer to this question, as the conversion rate that is considered “good” or “bad” depends on a number of factors, including:

  • The industry in which your business operates
  • The size and type of your website or online store
  • Your unique conversion goals, such as increasing revenue, acquiring new customers, or gaining subscribers
  • Your target audience and their preferences

On average, conversion rates for e-commerce sites range from about 2%, though some niches may have higher or lower conversion rates. If you are looking for tips on how to improve your conversion rates, there are many resources available online that can help you to get started.

Check this chart by Privy for Niche, Industry, and Platform Average Conversion Rates:

As you can see, the conversion rates for different niches and platforms can vary widely. If you are looking to improve your conversion rates, it is important to consider all of the different factors that can affect them and work to optimize your website or online store accordingly.

Landing page conversion rate

Now, let’s focus on the second thing.

Ecommerce Conversion Rate Formula: Landing page conversion rate = number of conversions / total number of visitors

To calculate your landing page conversion rate, you simply need to divide the number of conversions that occur on your landing page by the total number of visitors to that page.

Usage: The landing page conversion rate is an important metric to track, as it can help you to optimize your website and improve your conversions over time.

Example: If you have 100 visitors to your landing page, and 10 of those visitors complete a conversion action (such as signing up for your mailing list), then your landing page conversion rate would be 10%. This tells you that 10% of your visitors successfully convert to that particular landing page.

Important note: While it is important to track your landing page conversion rate, you should also consider other factors that may be impacting your website’s performance and overall conversion rates-such as your website’s design, the quality of your content, and the overall user experience.

You can read more about how to increase your conversion rates on e-commerce websites.

Targeted customer group conversion rate

Another important factor to consider when calculating your conversion rate is the targeted customer group from which you are converting. For example, if your e-commerce website sells products to a wide range of customers (such as women, men, children, etc.), you might have different conversion rates for each of these customer groups.

In order to calculate your targeted group conversion rate, you will need to divide the number of conversions that occur within each customer group by the overall number of visitors to your website from that particular customer group.

To give you a concrete example, let’s say that you sell products targeted at women, men, children, and seniors. If your website gets 500 total visitors each day, 100 of those visitors are women, 200 are men, 100 are children, and 100 are seniors.

If you get 20 conversions (such as completed purchases or signups) from women, 10 conversions from men, 15 conversions from children, and 5 conversions from seniors on any given day, then your targeted customer group conversion rate for women would be 20%, and your targeted customer group conversion rates for men, children, and seniors would each be 5% for that particular day.

Marketing channel conversion rate

Another important factor to consider when calculating your conversion rate is the marketing channel through which you attract visitors. For example, suppose you have a high conversion rate through your paid advertising channels but a lower conversion rate through your organic search traffic. In that case, measuring and understanding these different conversion rates is important to optimize your marketing efforts.

To calculate this particular conversion rate, you need to divide the conversions that occur through each marketing channel by the overall number of visitors to your website from that particular channel.

Using our example above, if you get 100 visitors through paid advertising channels each day, and 5 conversions occur on those days, your conversion rate for paid advertising would be 5%. If you get 500 visitors through organic search traffic each day, and 15 conversions occur on those days, your organic search conversion rate would be 3%.

Ads channel conversion rate

Next, you will also want to consider your conversion rates through different advertising channels. For example, suppose you use both Facebook ads and Google Adwords. In that case, measuring the conversion rates through each channel separately is important to optimize your budget and marketing efforts.

Formula:

To calculate this particular conversion rate, you need to divide the conversions through a given advertising channel (such as Facebook ads or Google Adwords) by the overall number of visitors to your website from that particular channel.

Using our example above, if you get 100 visitors through Facebook ads each day, and 2 conversions occur on those days, your conversion rate for Facebook would be 2%. If you get 500 visitors through Google Adwords daily, and 10 conversions occur on those days, your Google Adwords conversion rate would be 2%.

This way, you can use these different conversion rates to optimize your marketing efforts and budget according to the channels that are generating the most conversions for you. Whether you are focusing on increasing traffic to your site or improving the rate of conversions for each visitor, understanding and optimizing your conversion rates can be a key part of growing your e-commerce business.

FAQs

How do I calculate my conversion rate?

Answer: To calculate your conversion rate, you need to divide the number of conversions that occur by the overall number of visitors to your website. For example, if you get 500 visitors to your website and 20 conversions occur on any given day, then your conversion rate would be 4%.

What is the average conversion rate?

Answer: The average conversion rate for e-commerce websites is typically between 1-2%. However, this is just an average, and different websites may have higher or lower conversion rates depending on the industry, product, and marketing efforts.

What steps should be taken to complete the conversion?

Answer: To maximize your conversion rate, you should optimize your website’s user experience and marketing efforts. This could include improving the website navigation and design, optimizing your content for search engine rankings, leveraging targeted ads, and more.

CRO and mobile devices: What’s the impact?

Answer: Optimizing your website for mobile devices in today’s digital landscape is crucial. With more and more users accessing the internet via their phones or tablets, ensuring your website looks good on smaller screens is essential. CRO is also important for mobile devices, as it can help you identify any potential roadblocks or bottlenecks that may be preventing visitors from converting.

Wrap-Up

So, how to calculate ecommerce conversion rate? To start, you will need to divide the number of conversions that occur on your site each day by the overall number of visitors to your website.

ConversionWise’s e-commerce rate calculator can help you easily calculate the exact conversion rate for your site.

Additionally, you should consider your conversion rates through different marketing channels and advertising platforms to identify the most effective channels for your business. Finally, by using these different conversion rates as a starting point, you can optimize your marketing efforts and budget to help you achieve even greater success for your e-commerce business.

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