Key takeaways:

• Conversion rate is the ratio between total visitors and the number of sales, expressed as a percentage.

• Conversion rates vary by marketing channel, as different metrics are tracked.

• Conversion rate improvements generally correlate with revenue increase, so working on website load times, adding trust signals, and clarifying value propositions can directly impact your bottom line

The number of website visitors you convert into customers indicates the effectiveness of your offer and messaging. Improving them without tracking your conversion rate is impossible. The concepts and tools for such a task can get quite technical, but with strong basics, you can achieve some measurable progress.

What is Conversion Rate?

Conversion rate is the percentage of visitors who complete a desired action. If you want visitors to subscribe to a newsletter, for example, and fifty out of a hundred do, then you have a conversion rate of 50%. While all conversions lead to a sale, there are two major types:

• A macro conversion is the primary goal that directly ties to revenue or core business outcomes. Examples include completing a purchase, starting a paid subscription, or booking a sales call.

• A micro conversion is a smaller action that indicates engagement or intent to become a customer. Adding an item to a cart, watching a product demo, or visiting the pricing page can be considered a micro-conversion.

Macro conversions might seem more important at first, but both types should be tracked. Multiple micro conversion datapoints might save you money, help compare different campaigns, and identify weak spots. The longer your campaign conversion times are, the more important micro conversions become.

Conversion Rate Formula

At its core, conversion rate is a simple ratio between the total number of conversions and the website interactions, and is expressed as a percentage.

What counts as an interaction depends on your strategy, product, and what you're measuring. Conversion rate can be calculated using visitors, sessions, events, clicks, impressions, or other metrics. Different types of projects use different calculations.

• Website. Your landing page receives 2,000 visitors per month, and 80 submit the contact form. Conversion Rate = (80 ÷ 2,000) × 100% = 4%.

• E-commerce site. A product page receives 5,000 sessions and generates 150 orders. Conversion Rate = (150 ÷ 5,000) × 100% = 3%.

• Email campaigns. You send an email to 10,000 subscribers, and 2,000 of them continue receiving offers. Conversion Rate = (2000 ÷ 10000) × 100% = 20%.

Conversion rate calculations become more complex with multi-step sales funnels, as customers must complete multiple conversion actions. For example, you send an email to 10,000 subscribers, 2,000 people click through, and 100 complete a purchase on the landing page.

• Email click-to-purchase conversion rate: (100 ÷ 2,000) × 100% = 5%.

• Email send-to-purchase conversion rate: (100 ÷ 10,000) × 100% = 1%.

Another conversion rate complication comes from repeat converters - users completing multiple conversions over time. You can solve this by switching your metric from unique visitors to events or sessions, or by limiting each user to one counted conversion within a defined timeframe.

When discussing business strategy, conducting meetings, or delivering presentations, ensure everyone shares the same exact definition of conversion. Otherwise, confusion may arise.

Types of Conversion Rates

Conversions happen across different environments, such as regular websites, ecommerce stores, SaaS subscription pages, and on marketing channels such as paid ads and emails. Sales context, intent, and constraints vary across these channels.

Website & Landing Page

Website conversion rate typically refers to the percentage of visitors or sessions that complete a key on-site action. Common examples include submitting a form, booking a demo, downloading a resource, or signing up. 

Improving website conversion rates often means working on UX, web performance, copywriting, and other details. Real User Monitoring and solutions like Navigation AI will provide volumes of data that’ll direct towards necessary fixes.

E-commerce

Conversion rate in online stores is straightforward. It's the percentage of sessions or visitors that result in a completed order. Most immediate improvements can be reached by fixing various checkout frictions, such as adding more payment or delivery options. Tracking the funnel, improving UX, and product descriptions can also be helpful.

SaaS & Subscription

Software as a Service (SaaS) products rely on conversion rate metrics that calculate visitors or sign-up milestones. Trial start, plan upgrades, renewals, and similar metrics are among the data points that can fall under the conversion rate. 

To boost conversions, companies focus on onboarding strategies, in-app or marketing funnel optimizations. Spotify, for example, achieves a high conversion rate by combining in-app nudges to buy premium with successful onboarding strategies in the free tier.

Paid Ads

The percentage of ad clicks or impressions that result in a desired post-click action is tracked when paid ads are used. Much of conversion rate optimization relies on correct audience targeting, effective creatives, and landing pages.

Email & Lifecycle

Email and lifecycle conversion campaigns focus on when visitors convert from one stage to the next. Conversion rate is then calculated as a percentage of recipients (or visitors) who complete a target action after an email or lifecycle prompt. Optimization often mixes content experiments with automation logic (triggers, delays, branching).

What Is a Good Conversion Rate?

There's no one "good" conversion rate applicable to all industries, traffic sources, pages, and goals. For example, a 2% conversion rate on a website's home page is much more impressive than on a highly targeted, optimized product landing page.

Various sources, such as Adobe, report typical conversion rates averaging around 2-4%, but such generalizations are rarely accurate and shouldn't be treated as targets. It's best to consider your industry benchmarks and compare with competitors in your niche before setting goals.

• For e-commerce sites, 1.9-3% is standard, with 3%+ considered a strong achievement and 4% an excellent goal according to Shopify.

• For specialized landings, 6-12% is often reported for highly optimized pages, with 15% being an excellent result.

• For SaaS product pages, 2-5% is common for free trial signups from organic traffic, with 5 to 8% considered a strong result for warm audiences as reported by some agencies.

• For email campaigns, 1-3% is typical for cold outreach, while 5%+ is considered an excellent result. Recent benchmarks show a drop in averages for email marketing.

Once you know your audience and segment, you can use such baselines to improve your own benchmark for each defined period. Run tests against your historical conversion data to identify where improvements might be made.

Why Conversion Rate Matters

Every improvement in your conversion rate means more customers or leads with the same marketing spend. More customers mean more revenue – even minor conversion rate optimization improvements increase a product's profitability.

For digital businesses, conversion rate is closely tied to their efficiency in converting visitors into paying customers. If you spend $10,000 on ads and generate 1,000 visitors but only 10 convert (1% conversion rate), you spent $1,000 per customer, also known as the customer acquisition cost (CAC).

If each customer’s lifetime value (LTV) is $600, then your Return on Investment (ROI) is negative, and your LTV:CAC ratio is concerning. 

Raising the conversion rate even one percentage point would convert twenty visitors to customers, lowering your spend to $500 and turning the ROI positive.

How to Track Conversion Rate Correctly

Conversion rate optimization starts from accurate tracking, as no good decision can be made with inaccurate data. Using Google Analytics 4 (GA4) is the most popular free tool to monitor conversions. They are defined as specific events, such as "purchase," "form_submit," or "sign_up", that you mark as desired visitor actions.

If needed, you can create custom GA4 events to track conversions with greater accuracy.

Ad platforms like Facebook Ads allow tracking conversions by tagging and mapping specific user actions, such as clicking a "Buy" button. The results are then compared with the impressions and clicks data from the ad platform. Setting up these tools isn't always easy, and some mistakes are common.

• Metric choice. Your conversion rate reporting and targets should focus primarily on the actions that matter most to business outcomes. Secondary micro conversion rates should be used in specific cases when there’s a clear intent.

• Double-firing events. Conversion rates might be inflated due to the same conversion firing multiple metrics. Extensive testing of your monitoring setup should be performed to avoid such issues.

• Cross-domain issues. Sessions can break, and conversions may not be attributed correctly if separate subdomains are used for different parts of the website. If, for example, checkout is in one domain and confirmation in another, cross-domain tracking must be set up.

• Missing events. Changes to your site can break events that were set to monitor conversions. Regularly audit and double-check any changes to checkout flows, registration forms, and similar features.

Tools like Uxify analyze the site's core business and automatically define the customer journey and the conversion points through advanced data analytics. Our tools can also be manually overridden based on industry expertise.

Conversion Rate Optimization Basics

Conversion Rate Optimization (CRO) is a structured, research-driven process for increasing the number of visitors who become customers or complete some other desired action. The efforts are much more data-driven than they might seem at first glance.

The overall goal is to understand where users drop off, why they hesitate, and which changes are most likely to deliver the desired outcomes. Properly executed, conversion rate optimization looks like a test program that uses quantitative and qualitative inputs.

• Quantitative data shows what is happening in key steps of your funnel (visits, product views, checkout, etc.). Tools like heatmaps and click maps show where the most attention is focused and where audiences struggle or drop off completely.

• Qualitative inputs help explain why users behave the way they do. On-site widgets, polls, and surveys are often used to gather feedback. In some cases, session recordings are popular and useful.

15 Practical Ways to Improve Your Conversion Rate

Improve Your Offer & Messaging

1. Clarify your value proposition. Your headline and sub-headlines should be direct and immediately tell visitors what you offer, who it's for, and why it matters. Vague, overly clever copy confuses and loses visitors.

2. Ensure messages match. Your message intent must align with the whole landing page or ads. Consistency reassures visitors that they're in the right place, and a lack of it hurts conversions.

3. Address common objections. Anticipate the reasons people hesitate to buy, usually related to price, trust, risk, and complexity. Most customers don't ask questions – they simply leave if their worries aren't addressed.

Optimize UX & Page Structure

4. Use one primary Call to Action (CTA) per page. It's best when each page is optimized for a single specific action you want the user to take. Don't put all your CTAs on every page.

5. Simplify forms and remove unnecessary fields. Reduce the friction for the customers and make it as easy as possible to complete your desired actions.

6. Use scannable headings, bullets, spacing, and a clean layout. Make your landings easy to scan and avoid laggy interactions or layout shifts with CLS optimization measures.

Add Social Proof & Trust Signals

7. Add social proof. Include reviews, testimonials, or case studies near key CTAs to build trust and reduce perceived risk. It's important that social proof is genuine, as faking it can backfire.

8. Use clear trust signals. Focus on what's important in your niche and include signals like badges, guarantees, transparent pricing, free trials, privacy policies, and other signals.

Boost Performance & Mobile Experience

9. Improve page load speed. Slow pages kill conversions as every extra second is a chance to leave. Tools like Navigation AI can help preload pages for instant delivery to users.

10. Fix broken or confusing elements. Test your checkout, forms, and key CTAs regularly. Broken buttons, unclear errors, or confusing elements create unnecessary friction

11. Ensure performance. Practice INP optimization for a responsive and fully mobile-friendly experience. You can implement our free INP tool to measure page responsiveness across different browsers.

Funnel-Specific Improvements

12. E-commerce. Work on streamlining your checkout process and enabling express payment options. Payment friction is one of the most common conversion killers for online shops. Boosting Shopify pages with dedicated AI solutions might also help.

13. SaaS. Confusing pricing plans are some of the most common reasons for a low conversion rate. Choosing a plan should be as easy as creating an account.

14. Lead Generation. People tend to share their email only for high-value offers. Work on lead magnets that are worth it for your audience, specifically - checklists, templates, demos.

15. Emails and ads. Ensure your creatives, emails, and other advertising elements start converting as soon as possible. Don’t wait for the prospect to arrive at your landing page or a checkout section. Start the sale immediately.

How to Run A/B Tests

An A/B test is an experiment where two versions of the same page or ad are shown to different random visitors to see which performs better. Specific metrics, like conversion rate or click-through rate (CTR), are measured and compared between A and B groups.

As such, A/B testing is most valuable when the impact of changes is uncertain – as long as you test something people would disagree on. Trivial changes like minor color changes or obvious issues like broken forms are usually not worth the time to A/B test. 

Performing A/B tests for conversion rates makes the entire process more scientific and prevents you from rolling out changes that hurt performance. For A/B tests to be more reliable, a few basic rules must be followed.

• Representative sample size. Enough users and conversions must happen in each variant for the results to be representative. Online A/B test sample size calculators can help with the details.

• Sufficient duration. Short tests might give you misleading results, so it's best to run experiments for at least a full common business cycle.

• One primary metric. A common mistake is measuring too many metrics in A/B tests. To avoid losing focus, define a single primary metric beforehand and use it as the main benchmark.

Common Conversion Rate Mistakes to Avoid

• Relying on vanity metrics, like pageviews, followers, or impressions, instead of actual conversions. Often, this means you are paying to attract visitors who simply show up but do not further your revenue goals.

• Treating all traffic as equal is another trap that lures site owners into making changes to their websites. No amount of funneling, UX, or copywriting changes will help sell to the wrong audience. You must also evaluate what you bring.

• Making decisions on tiny datasets produces unreliable long-term results. It's important to have patience and avoid big decisions until you have a reasonable number of conversions per variant and at least a full business cycle.

• Blindly copying competitors without understanding their underlying reasoning can be a big mistake. Sometimes following trends pays off, but often brand trust, product economics, and various other factors are different.

Frequently Asked Questions

What is conversion rate, and how is it calculated?

Conversion rate measures the number of people who complete a desired action (purchase, subscription, etc.) out of all interactions. It's measured by dividing the number of conversions by total interactions and expressing it as a percentage. Depending on the channel, what measures, interactions might mean visitors, impressions, clicks, and other metrics.

What is considered a good conversion rate?

What's a good conversion rate highly varies by industry, product, specific offer, and other factors. Typically, a general cross-industry average is from 2% to 4% conversion. To determine what a good conversion rate is in your context, consider historical performance and current industry-specific benchmarks or competitor results.

What counts as a conversion in digital marketing?

Conversion happens when a visitor completes an action that you want them to perform. Usually, this aligns with business goals of making sales, gathering subscribers, collecting views, and similar. Macro conversions directly contribute to these goals, while micro conversions are smaller actions that lead to them indirectly.

Why is my conversion rate low (or dropping)?

Every case of visitors not converting to customers well is unique and requires a separate investigation. Some of the most common problems are poor user experience and website performance, complicated funnel, poor copywriting, lack of trust, and changes in market or consumer behavior.

What’s the difference between conversion rate and click-through rate (CTR)?

Click-Through Rate (CTR) shows the percentage of people who click on ads or link placements. Conversion rate measures the percentage of completed actions, such as purchases or sign-ups. CTR measures the top of the funnel, while conversion rates measure the middle or the end of it.

How can I quickly improve my conversion rate?

Quick wins in conversion rate are rare, but they usually come from making it easier for customers to act. Simplify the purchase forms, build trust, and streamline the checkout process in general. Removing the overall friction of the website in its UX design and optimizing site speed is also crucial.