Conversion Rate

The conversion rate (CVR) is one of the most widely used metrics in digital marketing and advertising. It helps marketers evaluate the effectiveness of campaigns, landing pages, and overall user experiences in driving desired actions, from purchases to sign-ups and downloads. 

What is the Conversion Rate? 

CVR is the percentage of users who interact with an ad and complete an action, calculated by dividing the total number of conversions by the number of visitors to a website or media channel.

A “conversion” can vary depending on business goals; it could be a product purchase, newsletter signup, app install, form submission, or any other defined goal. 

Why is CVR Important? 

By measuring CVR, marketers can assess how efficiently a website, ad campaign, or landing page is turning visitors into customers or leads. A higher CVR means you’re getting more value out of your existing traffic, which often leads to lower customer acquisition costs, improved ROAS, more effective funnel performance, and deeper insights into customer behavior. 

How to Measure Conversion Rate? 

To measure the conversion rate, use the following formula: 

Conversion Rate (%) = (Number of Conversions / Total Visitors or Interactions) x 100. 

Example: 

If 500 users visit your landing page and 25 complete a purchase, your conversion rate is:

(25/500) x 100 = 5%

This formula can be applied to emails, ads, websites, and any channel where a specific user action is tracked. 

When to Use CVR?

The most common use case is to track sales conversions by measuring the percentage of website visitors who make a purchase, especially in retail and e-commerce sites. You can also track user journeys’ progress through the different stages of a sales funnel. For lead-generation campaigns, tracking the conversion rate can measure how effective the lead-generation form is. 

Marketers also use CVR as part of the group of metrics that measure the effectiveness of a specific channel within a campaign. CVR helps to have a glance at campaign performance at any given moment.

What Is a Good Conversion Rate?

What is considered a “good conversion rate” will depend on the specific industry, the marketing channel used, and the type of conversion goal being measured. A conversion rate for e-commerce, for example, is typically between 2% and 5%. Lead generation campaigns can have a slightly higher conversion rate of between 5% and 10%. Paid search can sometimes achieve conversion rates of 10% and higher. 

How to Optimize a Low Conversion Rate 

If your conversion rate is underperforming, several strategies can be employed to improve results. 

Enhance the user experience (UX) by optimizing page speed, ensuring intuitive navigation, and minimizing distractions that may hinder conversions. 

Carrying out A/B testing with different call-to-action (CTA) phrases, page layouts, and promotional offers can also uncover more effective combinations that drive better performance. 

Personalizing your messaging to align with user intent or behavior and making sure your site or campaign is mobile-friendly is essential. Simplifying complex or lengthy checkout and sign-up processes can also reduce drop-off rates and improve completion. 

Benefits of Measuring Conversion Rates

Tracking CVR measures how well your ads, website, or landing page are converting visitors. This metric is useful for tracking the origin of installs in mobile advertising. Tracking conversions also gives marketers deeper insights into engagement metrics such as in-app purchases and subscriptions.

Conversion Rate vs Click-through Rate

Conversion rate (CVR) measures the percentage of users who complete a desired action after clicking. On the other hand, Click-through rate (CTR) measures how many users click on a link or ad relative to the number of impressions.