Glossary
Conversion Rate
Conversion Rate
A conversion rate is the percentage of people who completed a desired action.

What is a conversion rate?

A conversion rate is used in the marketing field to describe the percentage of people who took a desired action, such as making a purchase, or clicking a link.

In order to calculate a conversion rate, you need to divide the number of conversions(desired actions) by the total number of people (users, visitors, viewers, sign-ups, etc.) and then multiply the result by 100 to express it as a percentage.

Conversion rate = (Number of conversions / Number of people) x 100

For example, let's say you have an e-commerce app and want to calculate the conversion rate of the purchase out of the total visitors. You can use the following formula:

Conversion rate = (Number of purchases / Number of visitors) x 100

If your app received 1,000 visitors in a month and 50 of them made a purchase, your monthly conversion rate would be: (50 purchases / 1,000 visitors) x 100 = 5% conversion rate, meaning that 5% of your visitors made a purchase on your app.

Why is a conversion rate important for marketers?

By understanding how many users are converting, organizations can make changes to their marketing strategy and website design to improve their conversion rates and ultimately drive more sales. For example, if you are running a paid advertising campaign and your conversion rate is low, it may be a sign that your ad copy or targeting is not as effective. On the other hand, if your conversion rate is higher than expected, it could indicate that your marketing efforts are paying off and that you are effectively reaching your target audience.

In addition to helping you measure the effectiveness of your marketing efforts, conversion rates are also significant because they can impact your bottom line. If you can improve your conversion rate, even by a small percentage, it can significantly impact your sales and revenue.

So, how can marketers improve conversion rates? There are several tactics to try.

  • Optimizing apps for conversions: This can involve making changes to the design, layout, and content of the app to make it more user-friendly and encourage users to take action.
  • Testing different marketing tactics: Experiment with different marketing strategies, such as email marketing, social media advertising, and content marketing, to see what works best for your business.
  • Offering incentives: Consider offering incentives, such as discounts or free shipping, to encourage users to take action on the app.
  • Analyzing data: Use data and analytics tools to understand what is and isn't working and make changes based on the insights.

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