How To Calculate Conversion Rate

To calculate conversion rate you simply need to compare the number of conversions (numerator) over the possible candidates (denominator) usually expressed in a percentage. The art of calculating conversion rate is in the assignment of those values.

Calculating the Numerator, or Conversions

The numerator in the fraction is the number of total conversions in the time period. The assignment of conversion value should be something of true conversion, not prospective. For example, you would not look for conversions on a customer who purchased a product simply by looking at those who added it to their cart. You must calculate it off of the action that is the defining action in the conversion.

Calculating the Denominator, or Number of Possible Candidates

This is by far the most challenging aspect to define and can change your conversion percentage in dramatic ways. Two conversions out of 10, is a much better conversion rate than two conversions out of 100. So getting the number right here is very important to your overall result. Here are some things to think about …

  • Calculate an action that has true potential in engaging in the conversion. For example, don’t count every user to your site towards your ebook conversion rate, rather calculate the visitors of the page with the form.
  • In the same example, don’t narrow your total candidates by those who are past the decision point to only people who have started filling out the form. They are past the decision point and moving towards conversion.

Time Period of Conversion Rates

Every conversion rate needs to have a time period, as conversion happens over time. To calculate conversion rate accurately, you must know the time in which you are trying to measure so you can find accurate values for both parts of the fraction.

Increasing Conversion Rate

The best way to increase your conversion rate is to increase the number of conversions, while keeping the denominator the same. This is typically done through some conversion optimization or website design. Wondering how you should go about it? Contact us for a no pressure conversation on your marketing needs.

Best of luck!

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