CR: concept, formula for calculating the conversion rate

Conversion rate, also known as CR, is defined as the percentage of website visitors who have completed a specific targeted action out of the total number of website users. These actions can include, but are not limited to, ordering services, purchasing goods, registering, requesting a callback, etc. In online marketing, a person who has completed an action on a website is often referred to as a "lead".

The website conversion rate is a key performance indicator for any business and reflects the proportion of visitors who have completed a desired action, such as purchasing a product or signing up for a subscription.

Conversion Rate (CR) is often analysed for the following types of marketing campaigns:

• Make a purchase or order goods from the web shop.
• Send a request for a callback or expert advice.
• Subscribing to an email newsletter.
• User participation in social activities, such as sharing on social media, leaving comments on a blog, etc.
• The level of user engagement with website content.

How to calculate CR correctly

Calculating the CR (conversion rate) does not require any special mathematical knowledge. Just follow these simple steps:

Determine the specific time period for which you want to measure your conversion rate. It could be a day, a week, a month, a quarter or a year. Divide the number of conversions by the total number of visitors during the specified period. Multiply the result of this division by 100% to get the percentage.

The formula for the calculation is as follows

A/X*100%

Where:

• A - number of users who performed the target action during the selected period,
• X - the total number of website visitors during the same period.

Conversion is expressed as a percentage. For example, if 400 people visited a landing page in one day and 20 of them left a request, the conversion rate for that page is 5%.

Good conversion rate

The conversion rate is a dynamic metric in online marketing that depends on numerous factors, such as the specifics of the market niche, the average check, the level of competition, the product range, etc.

Experts have established average conversion rates for various industries, which can be used as guidelines when planning a business launch:

• Finance, banking and investment - 10%.
• Media and advertising - 10%.
• Health and education - 8%.
• Software development, IT sector - 7%.
• High technology, innovation - 5%.
• Manufacturing - 5%.
• Tourism - 4-5%.
• Retail, wholesale, e-commerce - 3%.
• Non-profit organisations - 2%.

These metrics are general and may vary depending on specific circumstances, but they provide a basic understanding of expected conversion rates in different industries.

Ways to increase conversion rates

There are many ways to increase conversion rates, some of which are specific to a particular niche. However, there are universal recommendations that can help improve your website's conversion rate if it seems low:

1. Increase the functionality of the site. Add elements that can improve the user experience, such as site search, social media links, high quality photos and videos. Think about what can increase user confidence in your site.
2. Experiment with the presentation of content. Low quality content or its poor presentation can have a negative impact on CR. Try different approaches: change the structure of offers, rearrange blocks, add new elements and analyse the results. Monitoring the impact of changes will help you understand what works best.
3. Include clear calls to action (CTAs). CTAs are critical elements that motivate users to take targeted actions on the site.
4. Update product information. Make sure product descriptions are complete and answer any questions users may have. Comprehensive information can significantly increase the chances of conversion.
5. Optimise your site for ease of use. Provide easy access to key features and categories, and make navigation intuitive. Improving the user experience on the website can significantly increase the conversion rate.

Conclusion

Although conversion rate (CR) may seem like a simple metric, its role in determining business success is undeniable. CR allows you to evaluate the effectiveness of an advertising campaign, reflects the attractiveness of products to customers and helps you understand how well a website is designed. A high conversion rate indicates that a company not only knows how to capture the attention of consumers, but also how to convert their interest into real action - purchases, subscriptions or other targeted actions. As such, CR is an important tool for evaluating the effectiveness of business strategies and web design, providing valuable guidance on potential areas for optimisation and improvement.