Optimizing your Conversion Rate is one of the best ways to measure your company's advertising and web analytics performance. By definition, Conversion Rate is "percentage of users who take a desired action" (thanks, Nielsen!). More specifically, we like to look at it as how you can measure the effectiveness of a campaign or website to engage visitors. While the metric seems simple on the surface, it gives valuable insights into areas of future growth and improvement. We'll take you through how to calculate this metric, how to understand it in the context of your industry, and how to apply it to the platforms you're using now.
How to Calculate Conversion Rate
You can calculate conversion rate by dividing total goal completions (i.e. sign-ups, purchases) over the total interactions (i.e. clicks, page visits). Conversion Rate can be assessed for various time-periods (i.e. day, week, month, year), and, if the page visit and completion rate are tied to certain products or campaigns, you can assign a specific conversion rate for each.
If you’re confused about how to define goal completions and interactions, we’ve included some nifty definitions and examples below:
Goal completion includes the number of times that your desired goal was, well, completed. For instance, for this, you may track the amount of visitors who have completed a transaction with your webpage, which will show the effectiveness of your website in generating leads.
Interaction includes the number of times that a certain action was completed. For the prior example, you may designate an interaction as the traffic made on a landing page. This would involve the number of visitors that show consideration or intent to purchase in your shop.
When choosing what to include in your calculations, remember: consistency is key! That means, if you decide to include XYZ in your conversion rate for the month, you should include it in the next month’s conversion rate as well. Having consistent metrics will allow you to better identify the causes of good or bad performance. For instance, if your conversion rate for the month of July is 80 purchases out of 400 page visits, and lower numbers appear in the month of August, that means that your landing page may need improvement.
Connecting Conversion Rate to Your Business
Again, as you begin (consistently) monitoring Conversion Rate, you’ll be able to find insights specific to your strategy. Of course, it’s also important to understand your Conversion Rate in relation to your broader industry. To help you know what to expect, we’ve included a list of average Conversion Rate per industry:
Apparel - 2.77%
Arts & Entertainment - 4.51%
Business & Industrial - 3.71%
Computers & Electronics - 3.16%
Dining & Nightlife - 4.74%
Finance - 4.17%
Health - 4.63%
Hobbies & Leisure - 3.39%
Home & Garden - 4.26%
Jobs & Education - 4.15%
Law & Government - 7.45%
Real Estate - 3.40%
Retailers & General Stores - 4.23%
Sports & Fitness - 3.83%
Travel & Tourism - 3.95%
Vehicles - 7.98%
Further, while you can identify goals or interactions for many channels, we’ve identified popular platforms that are particularly relevant to Conversion Rate. These may be good places to begin if you’re getting started with this metric:
Google Analytics: Using this platform to get your Conversion Rate is very convenient. It will help you track the actions that your website’s visitors did and get your goal conversion.
Klaviyo: This is one of the best platforms that you can use if you want to get your conversion rate easily. Klaviyo perfectly analyzes the conversion rate made for each campaign your website creates.
Mailchimp: If you already have an account in this marketing platform, you can also use its conversion rating tool. It automatically analyzes your conversion rates and gives you suggestions on how you can improve it.
Tracking Conversion Rate with Lido
While Conversion Rate is easy to calculate, it’s important to keep in mind that Conversion Rate is one of many valuable metrics to track your performance. If you don’t want to spend hours at the end of the month juggling numbers from your Google Analytics, Klaviyo, and Mailchimp accounts, consider trying Lido. Lido can help you build a dashboard to monitor your data and give a look into how your key metrics (such as Conversion Rate) change over time.