A “conversion” can refer to any key action that moves a prospect closer to becoming a customer, depending on the goal of the page or campaign. Common examples include:
- Completing a purchase (eCommerce)
- Signing up for a newsletter or webinar
- Downloading a resource (e.g., eBook, whitepaper)
- Filling out a lead generation form
- Starting a free trial or demo request
- Clicking a key CTA button
Formula:
Conversion Rate (%) = Number of Conversions / Total Number of Visitors x 100
Example: If a landing page receives 2,000 visitors in a month and 100 of them complete the lead form, the conversion rate is:
100/2000 x 100 = 5%
This means 5% of visitors performed the intended action.
Why conversion rate matters:
- Performance Indicator: It shows how effectively a page, ad, or campaign drives action.
- ROI Optimization: Higher conversion rates typically lead to lower acquisition costs and better marketing ROI.
- User Experience Insights: Low conversion rates can signal friction points, unclear messaging, or misaligned targeting.
- Scalability: Improving conversion rates often has a compounding effect on growth—especially for paid acquisition.
Factors that influence conversion rate:
- Quality and relevance of traffic
- Clarity and persuasiveness of the offer
- Landing page design and copy
- CTA placement and strength
- Page speed and mobile friendliness
- Trust signals (e.g., testimonials, reviews, security badges)
- Ease of completing the action (form length, checkout friction)
Example (Ecommerce): An online apparel store sees a 1.2% conversion rate on product pages. After simplifying the checkout process, adding customer reviews, and improving mobile speed, the conversion rate jumps to 2.4%. This doubles revenue without increasing traffic or ad spend, illustrating why CRO (Conversion Rate Optimization) is so powerful.