Conversion Rate

The conversion rate explains how many prospects turn into new customers or take another expected action. eCommerce businesses run loyalty programs and offer heavy discounts to tempt store visitors to become customers. In simple terms, a higher conversion rate means you’re compelling more people to take an intended action.

For example, if you run an advertisement on Facebook which reaches 10,000 viewers, with 400 viewers clicking on the ad, you’d calculate the conversion rate as follows:

Conversion rate = (The total number of conversions/The overall size of the audience) x100

Conversion rate = {(400)/(10,000)} x 100 = 4%

This same calculation can be applied to other digital scenarios too. Conversions could be site visitors turning into shoppers or blog readers becoming subscribers.

eCommerce brands keep working on out-of-the-box ideas to boost the conversion rate as much as possible because this practice can unlock several benefits, such as:

  • More customers
  • Boosted profits
  • A competitive advantage
  • Reduced acquisition costs
  • Improved brand image
  • Enhanced CLV

Create a world-class post-purchase experience