What is conversion rate?
To understand what a conversion rate is, you first need to know what a conversion is. A conversion is a pre-established measurement related to a specific action by a user. This can be completing a purchase on an e-commerce site, filling out a form on your website or on a página de destino , a subscription to a newsletter, a download of an libro electronico , or a registration for a webinar, for example.
Within this, we then have the concept of conversion rate. It is measured by the number of conversions generated in relation to the number of visits (when we talk about a website). In Google AdWords , for example, the conversion rate automotive email lists can be the number of clicks on a specific ad, the number of visits to your blog or a specific video or even the number of calls obtained in relation to the ad.
In other words, the conversion rate is linked to the action you determined and related to the universe that revolves around it.
How is conversion rate calculated?
On a website, for example, that gets 10,000 visitors and has 1,000 signups (or conversions), the conversion rate is 10% (that was a piece of cake). On a Google Adwords ad that had 1,000 views, the click-through rate might have been 12% (120 clicks) and the conversion rate (relative to clicks) might have been 5% (6 purchases).
Another example could be sales made. On a website with 8,000 visitors, 160 sales were made. Applying a rule of three, we have that the sales conversion rate was 2%:
Number of sales / Number of visits *100
When we talk about virtual stores, in Brazil, the conversion rate is around 1.65% .
How important is conversion rate?
Conversion rate is a metric that helps measure results. In inbound marketing, for example, conversion rates can be measured within the sales funnel. By defining each stage of your funnel , you'll be able to measure how much your funnel is converting as you move from one stage to another and plan actions to optimize conversion rates.
In addition, conversion rates allow you to more accurately assess the Return on Investment of your digital marketing actions.
By analyzing your conversion rates, you can direct marketing and sales so that both teams can improve their results and bring good business to your company.