With the rise of ecommerce websites, the conversion rate calculation has become increasingly important. But, it is not as easy as you think. Your conversion rate will be wrong if you don’t get your math right.
If you’re selling anything online, it’s important to calculate conversion rates. But what is the conversion rate? And how do you calculate it? I’ll share my tips and tricks for calculating conversion rates for any ecommerce business.
If you’re just starting with ecommerce, you might be wondering how to calculate conversion rates for your website. But what is the conversion rate? And how do you calculate it?
I’ll show you exactly how to calculate conversion rates and how analyze them so that you can improve your business. Whether you’re selling a physical product or an eBook or you’re trying to sell a service, you’ll learn how to calculate conversion rates for your business.
Why should you calculate conversion rates?
As an ecommerce business owner, knowing your conversion rates is important. After all, if you’re spending time and money on a product or service, you want to know whether or not you’re making the most out of it.
The problem is that “making the most out of it” is vague.
So, how do you determine your conversion rate?
First, you need to define your conversion rate.
What exactly does your conversion rate mean?
Let’s say you sell an eBook, and want to know how many people actually buy it.
A conversion rate is the percentage of people who purchase something from your website versus the total number of people who visit your website.
You can think of conversion rate as a measure of your website’s effectiveness.
What makes a good conversion rate?
You need a good conversion rate to ensure your sales are profitable.
A good conversion rate is more than 50%.
If you have a 50% conversion rate, you’re doing well.
But you’re doing great if you have a 60% conversion rate.
Now, let’s talk about how to calculate your conversion rate.
The different types of conversion rates
Conversion rate can be described as a ratio of the number of customers who perform a certain action on a website (e.g., purchase an item) to the total number of visitors who visit that website.
It’s also sometimes referred to as a click-through rate because conversion is usually the result of a click.
There are various types of conversion rates. Here’s a list of the most common ones:
• Cost per acquisition (CPA) – The average amount a customer has to spend before they convert.
• Cost per sale (CPS) – The average amount a customer spends before buying.
• Conversion rate – The ratio of customers who perform an action (e.g., click, buy, fill out a form) to the total number of website visitors.
Calculating conversions based on revenue
Conversion rate is the number of customers who complete a specific action (e.g., make a purchase) divided by the total number of customers who visit your website.
If you’re selling anything online, it’s important to calculate conversion rates. But what is the conversion rate? And how do you calculate it? I’ll share my tips and tricks for calculating conversion rates for any ecommerce business.
Here’s how I calculate conversion rates.
You need to know the total number of unique visitors, the number of visits, and the number of purchases made on your website. Then, you need to see the conversion rate. To do so, divide the number of assets your website makes by the total number of visitors.
What are conversion rates?
A conversion is any action your visitors take that leads to you making money. For example, when someone purchases something from you or subscribes to your mailing list.
Conversion rate is the percentage of conversions from visitors to customers. It’s a really important metric, especially for B2C companies, because it gives you a quick idea of how many customers you’ll have if you keep working on improving your site.
It’s also a good idea to track this metric at the product level to see how well certain products perform. There are many ways to calculate conversion rates, and the most effective ones involve customer surveys and A/B testing.
Ecommerce conversion rates by stage
Calculating your ecommerce conversion rates is like finding the “golden goose” of your sales. Knowing if you’re making enough money from your sales or losing more money than you’re making is essential. To calculate your ecommerce conversion rate, you need to know what stage of the sales process you’re at.
This is the easiest way to determine if you’re making money.
1. Purchase
This is the first step in the buying process. Here you’re offering your buyer the opportunity to buy your product or service.
2. Pre-order
Here you’re offering your buyer the opportunity to pre-order your product or service.
3. Click
This is where you’re giving your buyer the ability to buy.
4. Order
This is when you’re processing the order and shipping it.
5. Completed
This is where you send your buyer an email or ship the product.
Frequently Asked Questions Ecommerce Businesses
Q: How can you calculate conversion rates for e-commerce businesses?
A: You can calculate conversion rates based on how many leads you get from different sources. If you’re getting one tip from a webinar, it would be considered 1.5 conversions.
Q: Do you think the average conversion rate is too high or too low?
A: Too low or too high depends on what you’re selling. For example, an online retailer would have a higher conversion rate than a company that sells food or clothing.
Top 3 Myths About Ecommerce Businesses
1. Converting from one product to another is very hard.
2. You’ll never get more than 10% conversion rates from your website or landing page.
3. There are too many conversion rate formulas
Conclusion
Conversion rates are critical to any ecommerce business. They tell you how much of your audience is converting into customers. In other words, they tell you what your profit margins are. If you don’t know how to calculate conversion rates, you’re missing out on the opportunity to increase profits. I will explain how to calculate conversion rates for ecommerce businesses and increase your profits by optimizing your conversions.
