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What is the Conversion Rate? Definition, Calculate, & Examples

In the 21st century, with the proliferation of online shopping, how to bring your products and the store’s name to customers’ attention is one of the critical questions of store owners. The conversion rate is one of the most important criteria to know if your site has an excellent performance, which can bring good sales.

To have an overall view of the conversion rate, we need to have an insight into the definition, how it calculates, and how to optimize the conversion rate?

Table of Contents

What is the conversion rate?

What is the conversion rate

Conversion rates (calculated as percentages), a key metric in digital marketing, assess the effectiveness of website traffic, marketing initiatives, and conversions. To calculate, divide the number of conversions by the total visitors.

Example: If an eCommerce site records 200 monthly visitors with 50 sales, the conversion rate is 25%.

Conversions encompass various user actions, such as clicking a button (CTA) or completing a purchase. Websites and apps usually have multiple conversion goals, each with its specific conversion rate.

What is a good conversion rate?

Your conversion rate directly reflects the effectiveness of your public-facing content. If, for instance, 6% of your website visitors engage in desired actions like joining your mailing list or making a purchase, your website is considered 6% effective. The most recent surveys and studies conducted in 2023 indicate that the worldwide average website conversion rate stands at 3.68%.

This conversion rate may vary across industries. For example, sectors like electronics or business services often achieve higher conversion rates, while others, like industrial equipment, may have lower-performing websites. Ensure accurate comparisons by researching industry benchmarks.

Why does conversion rate matter?

To assess the effectiveness of your marketing initiatives, it’s crucial to understand the level of audience response. The conversion rate, which compares customer responses to total contacts, stands out as a highly valuable and accurate metric.

Let’s imagine that if 50 people joined your mailing list last month, it might seem like a cause for celebration and relaxation. However, upon realizing that these 50 signups originated from over 50,000 website visitors, resulting in only a 1% conversion rate, it becomes evident that the content needs adjusting.

Conversion rates also offer insights into the success of your segmentation strategies. By knowing your conversion rate, you can enhance marketing campaigns on platforms like social media, tailoring them to specific users based on factors like location, interests, and more.

What factors impact conversion rates?

Numerous factors can influence favorable conversion rates, including:

  • Source of Traffic: Varies based on channels and mediums through which app and website visitors arrive.

  • Types of Conversions: Whether they involve form fills or purchases.

  • Regional Variances: Online purchasing popularity can differ across countries.

  • Messaging on Landing Pages: The content and presentation on landing pages play a crucial role.

  • Optimization: The degree to which your website or app is well-optimized.

  • Device Types: Variances among mobile devices, desktops, or tablets.

  • User Experience: Generally, better user experiences tend to correlate with higher conversion rates.

How to calculate the conversion rate?

Tracking conversion rates across all your channels is vital for maintaining an effective Shopify conversion rate optimization process. To achieve this, it’s important to grasp the calculation of Conversion Rate Optimization (CRO).

Here’s a standard formula for calculating conversion rates:

Conversion rate = Total number of conversions / number of visitors x 100

Consider that your store had 1,000 visits and 60 sales last month. Then, your conversion rate equal: 60 / 1000 x 100 = 6 (%)

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How to optimize the conversion rate?

This is a nightmare situation for marketers if the site has a low conversion rate, which means that the e-commerce site is not performing as well as it should. It’s time to take solutions to optimize the conversion rate.

Improved customer service

The interest level of visitors is maximized by matching the right visitor to the right place at the right time. Customer service is an essential factor which helps visitors find suitable products.

By showing your audience that you’re always available, ready for support, and provide a meaningful response which can answer their needs, you will gain more loyalty. It will help shorten time to purchase decisions. Unless you’re in an industry that deals with one-time purchases. The first purchase will also be a method of persuasion. Therefore, you need to ensure that it’s an overwhelmingly positive one.

How to optimize the conversion rate

Promotions and incentives

The interest of the offer includes the value promotion and how well it is presented to connect with the user. Good deals and promotion are the methods which arouse customers’shopping desires, makes visitors decide to purchase on your site. Buy X amount, you will get the Y discount will encourage customers to buy more and push them to come back. Special promotions extension can be the right choice in this case.

Besides, making the promotion attractive is also crucial as it’s an impression on visitors’ eyes when they navigate to your site for the first time. They may spend more time investigating the deal that you offer, then consider if they really need it. Having an appealing banner slider and promo bar helps your site catch visitors’ eyes while they traffic to your site.

User-friendly site

The simplicity of completing the desired action for customers is dependent also on the site’s usability. It includes intuitive navigation and fast loading pages. Improve the transparency of your categories, making the site easier to navigate and resort to minimalism. Waiting for the site to load whenever customers have a selection will make them out of patience. They can leave your site before they find the products that they need. It will kill the conversion rate of your site.

So keeping customers on one page, saving their shopping time will make them satisfied. It is the reason why the Layered Navigation module is chosen to install. Making customers happy during their shopping journey is not enough if the final step, which is the checkout process, takes a long time. Consider having more payment gateways with common payment methods or the checkout page display in one page is the solution to push visitors to revert to your loyal customer.

Make use of the CTA button

The main goal of your homepage is to direct customers to a product page. To ensure a homepage that prioritizes conversions, structure it around a prominent call to action (CTA) that is clearly noticeable. Consider all other information, regardless of its significance, as supplementary content.

Keep the content above the fold—visible without scrolling—neat and simple. This area may include a hero image of your top-selling or recently launched product, a headline, a navigation bar, and, importantly, the primary CTA.

If you want to incorporate a product narrative or additional details, it’s recommended to place them lower on the page for visitors to explore as they scroll.

A streamlined product discovery process is crucial, and a search bar is a fundamental feature to achieve this goal, commonly found in most Shopify themes.

Optimize the user experience by incorporating a plugin that offers intelligent search suggestions, checks for misspellings, and recognizes synonyms, providing tailored product recommendations based on user input.

Explore applications that allow you to customize the search results page, designating products as “best-selling” or “low-stock.” This customization can create a sense of urgency, motivating users to make a purchase.

Ensure transparent pricing

Unexpected charges at checkout, such as taxes or last-minute shipping fees, are a major cause of cart abandonment, accounting for about 47% of cases. To mitigate this, clearly state shipping costs in your product descriptions well before the checkout stage. If prices vary based on products or location, provide an estimate or a chart for buyers to calculate.

Reasons for Abandonments During Checkout Source:Baymard Institute

For an even more straightforward approach, consider incorporating delivery costs into the product price on Shopify and making “Free shipping” the default option. Offering free delivery is a bonus for online retailers, akin to complimentary popcorn in movie theaters—not a necessity but a pleasant addition.


In the final words, the conversion rate indicates how good the performance is, whether your marketing strategy helps gain profit and how visitors engage with your website. Understanding the conversion rate can help store owners have a better strategy to drive visitors to your site with successful purchase orders.

Many factors can affect the conversion rate, and a website owner can influence some of these to improve the conversion rate, which will result in more leads and sales. There’s no magic or shortcut, the most important is to remember that you run your e-business in the long-term, it requires the effort to make everything better. Effective tracking and measuring, supported by structured testing, is a recommended method of optimizing website conversion rates.

You can know more about the ways to optimize the conversion rate by visiting the article.

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