The Conversion Rate (CR)
The Conversion Rate, in English conversion rate, is one of the most important metrics in online marketing. It describes visits that have successfully converted into a contact or a purchase. Consequently, the Conversion Rate serves to measure success.
What is a conversion?
The word “conversion” comes from English and can be translated into German as Konversion, as well as transformation or conversion. In online marketing, a conversion describes the transformation of a page visit into a purchase, a contact, or other desired interactions with the website.
The interactions with the website can be very diverse . Website visits convert …
- in an online purchase
- add the entry to a wish list
- in a seminar registration
- into a download of a white paper or similar
- in a newsletter subscription
- and so on …
It becomes clear that not only online shops have conversion opportunities. A new website rating on Google My Business can also be a conversion, as well-rated websites (for example in the hospitality industry) are more successful than competitors that are not or are poorly rated.
Calculating Conversion Rate: A Simple Formula
The conversion rate is calculated from the ratio of visits to, for example, downloads or online purchases. The formula is as follows:
Purchases / Visitors * 100 = Conversion Rate
It is important to note the following (especially for online purchases): First, you should ensure in Web Analytics that you are only tracking real visitors (internal test visitors, etc. should be filtered out). Then you should consider that the conversion rate for online purchases is always a gross number. Cancellations, returns, etc. are initially not deducted in web tracking. Therefore, you should make the following split:
- Gross Conversion Rate: This value assesses the success of the respective online marketing channel, for example search engine advertising (SEA)
- Net Conversion Rate: You deduct all returns and cancellations. This value can only be assessed in relation to the assortment and across the entire shop, as in most cases, for example SEO, has no immediate or comparatively low impact on returns etc.
Additionally, you should link conversions that cannot be associated with purchases to monetary goals . You should ask yourself, what is a newsletter sign-up worth (in euros) or a download. Then you can also evaluate the cost-revenue ratio (KUR) from the conversion rate.
Conversion Rate Calculator
Here you can easily calculate the conversion rate (CR). For this, enter the number of users who have completed a desired action under “Conversion” and the total number of users who visited your website or campaign under “Visitors”. The conversion rate will be automatically determined for you.
What is a good conversion rate?
This question is not so easy to answer. First of all, conversion rates depend on the following aspects (and these aspects are just a selection):
- Industry – depending on industry different conversion rates are common
- Similarly, the pricing and price communication play a role in online retail
- It depends on whether it is a download instead of a purchase
- Conversion rates can perform worse if registration or cart processes have not been optimized
- If you define a website rating (5 Star Rating) as a conversion, then there can be different values when you incentivize (reward) it or not
This list could go on indefinitely. Different online marketing channels have different conversion rates. Affiliate marketing usually has a higher rate than paid search engine advertising (SEA) and SEA usually has a higher rate than organic search engine marketing (SEO). So it is difficult to name an exact number or compare with other entrepreneurs, as each website is very individual.
As in almost all online marketing quotes, the following should apply: “There is never a limit upwards”. – Nevertheless, it is important to know that Rheinwunder has rarely seen CRs in the double-digit percentage range without working with a professional agency. Whether in the SEO team or in affiliate marketing, improvement has always been possible for us – we turn your single-digit conversion rates into successful double-digit conversion rates!
Do you want to improve your conversion rate and need support? Then contact us! Do you want to learn more or have your team trained on this topic? Then take a look at our analytics seminars.
