Website conversion rate - an introduction
Website conversion rate (also known as website conversion ratio) is an important e-commerce metric that tells you whether your website is able to convert visitors into actual customers (which ultimately drives revenue). Website conversion rate is normally expressed as a %.
What is website conversion rate?
Website conversion rate measures how well your website drives visitors to take a desired action e.g. to make a purchase. It can be used to measure successes (or not) of website product launches or highlight any issues with the customer buying journey. In either case, you’re able to see how well your website is converting visitors to customers and generating revenue. Effective marketing will drive traffic to your website which then needs to be converted into sales.
Why is website conversion rate important?
There’s no business without customers, and so being able to measure how your customers are responding to your website and their willingness to buy your products is key. Improving conversion rate can have a material impact on revenue without necessarily spending more on marketing.
Your conversion rate can highlight both competitive advantage and potential points of failure across the customer journey, such as:
Website conversion rate and products
- Product alignment to customer preferences.
- Merchandising and photography.
- Suggested basket add-ons
Website conversion rate and pricing
- Free shipping or free returns.
- Discounts or promotions.
Website conversion rate and supply chain and logistics
- Estimated delivery timeframes.
- Frictionless payments e.g. Apple Pay, Klarna etc.
Website conversion rate and marketing
- Targeting the right customer and quality traffic.
- UX and customer journey.
Being able to monitor website conversion rate, and at which point customers leave your website can help influence what decisions you make. For example, if customers bounce straight away, are your product pages matching what’s been offered to them? If customers add products to their basket but don't check out, is the process of checking out clear enough and before leaving the site is there a prompt they are yet to check out? If customers leave at the stage of selecting shipping, does it indicate shipping is either too expensive or not quick enough for the customer?
All this feedback can help make improvements to the customer journey and increase your conversion rate.
What does website conversion rate look like?
How do you calculate website conversion rate?
In order to calculate your website conversion rate, you will need to know the number of orders (or actions you’re defining as a conversion) in a set period, as well as the number of unique website visitors in that same period. Simply divide the number of conversions by the number of visitors.
The formula to calculate website conversion rate is:
Website conversion rate = number of conversions/ unique website visitors x 100%
Website conversion rate worked example
If a company has 100,000 unique website visitors and 1,000 orders in the same month, its website conversion rate would be calculated like this:
Website conversion rate = 1,000 orders / 100,000visitors x 100% = 1.0%
How can you improve your website conversion rate?
The number of unique visits is ultimately driven by the effectiveness of your marketing which is often measured using ROAS but in terms of the number of orders, this can be driven by factors such as website ease of use, speed of page loading, product relevance, checkout experience, response time to customer chat questions and many other factors related to user experience.
A higher conversion rate generally means you’re attracting the right audience for your product, or that your products are relevant to what you’re advertising i.e. your marketing resonates with your customers. It also means that the user journey through your website created a positive customer experience.
A lower conversion rate could be caused by a variety of reasons, such as focusing on the wrong audience, slow loading pages, poor photography etc.
If your session numbers are low, then using website conversion rate could be misleading as you’re not using large enough sample of data to accurately determine the impact of various changes. In this case, you should focus first on increasing your website sessions.
Using website conversion rate allows you to better understand the impact of your marketing strategy, product launches, product placement and changes to the user experience on your ability to convert visitor into customers, which in turn grows your revenue.