Conversion rate

What the conversion rate means

The conversion rate is the share of visitors who take a desired action. In online retail that is normally the order, but the term is open: a newsletter sign up, a catalogue download or a completed contact form is a conversion as well. Anyone using the figure therefore has to define the goal first.

The formula is the number of conversions divided by the number of visitors, multiplied by 100. A shop with 50,000 visitors and 1,000 orders has a conversion rate of two percent.

Why industry averages help little

Published averages often sit between one and three percent. For a single shop they are of limited use, because they do not know the structure behind the numbers. A shop with strong brand traffic has a different rate than one drawing most visitors from ads. Assortment, price level and the share of new customers shift the value considerably as well.

Comparing with yourself is more useful. If the rate improves over time, a change worked. If it drops while traffic stays flat, something has become broken or unclear.

What the figure hides

• It averages opposites: a campaign with many visitors and few buyers lowers the rate, even if the new audience matters later.
• It says nothing about value: ten orders with a small basket are worth less than two with a large one. Revenue per visitor is the more telling number.
• It depends on counting: without a clear rule for sessions and returning visitors, two periods are not comparable.
• It invites discounts: price cuts lift the rate immediately and damage the margin for good.

Where the biggest levers sit

The order is usually the same. Excessive shipping cost and an unclear delivery date cost more orders than any layout. The product page with images, copy and available sizes follows, then the checkout, where superfluous form fields are the most common reason for dropping out. Only after that are small changes to colours and wording worth the effort, and their effect is hard to measure anyway.

Frequent questions

• Which rate is normal? Between one and three percent is common. Your own trend says more than the average.
• Should I check it daily? Weekly is enough. Daily values swing strongly with small numbers.
• Is revenue per visitor better? For decisions yes, because it includes the basket value.