What is the conversion rate?

A marketing strategy that does not incorporate mechanisms for analysis and results reading is, basically, doomed. It’s very difficult, if not impossible, to know our faults or how we can improve processes. That’s why in digital marketing, analysis is indispensable.

Now with that point hammered home, we can be sure that one of the essential KPIs (Key Performance Indicators) when it comes to analysing a business model is looking at the conversion rate.

But what is it exactly and how is it calculated?

In essence, the conversion rate refers to the percentage of consumers that carry out a specific action: buying, downloading, booking, signing up, etc.

It is calculated through dividing the number of specific actions carried out with the number of customers who visit the website.

If the conversion rate is always needed in any digital marketing strategy, then it’s even more true in the case of e-commerce in order to take the pulse of the business. So, it should be monitored frequently to understand and determine variables in achieving the proposed objectives.

The most robust benchmarks for conversion rates are very much focused on north American audiences, so we cannot assume that Latin America or Europe will be the same.

However, it is a good starting point and it indicates that the average conversion rate is between 1% and 3%. This means that out of each 100 people to visit your site, only 1 – 3 people will carry out the action we want them to.

Now that we’ve seen why the conversion rate is so important as an indicator, we immediately go on to asking ourselves: how can I increase the conversion rate on my website?.

Our advice: don’t overlook thoroughly analysing conversions. Eventually, this helps us to better know how visitors behave on our website. Therefore, we can set up strategies based on facts and in turn, these strategies will be much more useful.

After we’ve analysed the results of our digital efforts and we understand our consumers’ behaviour better, we can move onward and upward in achieving goals and increasing that oh-so valuable Conversion Rate.