Conversion Rate: Definition, Calculation, and Ways to Optimize It

Conversion Rate: Definition, Calculation, and Ways to Optimize It

Business expansion into the digital realm is promised to provide significant benefits with less effort. However, that does not mean that marketing efforts are simple and easy. There are many aspects and factors that contribute to the improvement and success of your sales. As part of digital marketing, you need to understand conversion rate optimization for your business.

How to? In this article, you will learn about it in full. Not only the meaning of CRO but also the benefits and steps for optimizing it on your website.


What is conversion rate?

Conversion rate refers to the percentage of website visitors or users who take a desired action or complete a specific goal on a website. This action could be making a purchase, filling out a form, signing up for a newsletter, or any other action that aligns with the website's objectives. It is a key metric in digital marketing and is used to measure the effectiveness of a website or campaign in driving desired user actions.

A higher conversion rate indicates that a larger portion of website visitors are taking the desired action, which typically signifies better user engagement, effective marketing strategies, and a well-optimized website. Increasing the conversion rate is a primary goal in conversion rate optimization efforts.

Conversion rate optimization (CRO) is the process of improving the conversion rate of a website by making changes to various elements, such as the design, content, layout, call-to-action buttons, and user experience, with the aim of increasing the likelihood of visitors converting.

It's important to regularly monitor and analyze the conversion rate of a website to identify areas for improvement and implement strategies to enhance the overall performance and success of the website.

Each strategy has different goals or targets. So, any action taken by the audience can be considered a conversion rate calculation as long as it meets that goal. Forms of action that become the goal of a campaign and become a benchmark for conversion rate are grouped into two types:

1. macro conversions, which refer to actions that directly impact revenue, such as:

  • Make a purchase.
  • Submit forms (contact us form, lead generation form, etc.).
  • Call your business.
  • Engage with your online chat.
  • Sign up for a subscription (paid or free, such as a newsletter).
  • Register an account on the website.
  • Downloading things like trial software, ebooks, and apps on smartphones
  • Using something like new features and updates to your software or application Apart from that, you also use your software or application for a certain period of time.
  • Engage with your site in a number of ways, such as time spent on the website, repeat visits, and number of pages visited.

2. micro conversion, which means actions that indirectly affect the business, such as:

  • interactions on social media,
  • take surveys, and more.


Sales Conversion Rate By Industry

The sales conversion rate can vary significantly by industry due to factors such as the nature of the product or service, target audience, and sales process. Here are some average sales conversion rates by industry, although it's important to note that these numbers can vary widely:

  1. E-commerce: The average conversion rate for e-commerce websites is around 2-3%. However, this can vary depending on the industry, with some niches experiencing higher conversion rates.
  2. Software as a Service (SaaS): SaaS companies typically have conversion rates ranging from 3-5%. However, this can vary depending on factors such as the complexity of the software and the target market.
  3. Retail: Conversion rates in the retail industry can range from 1-3%. Factors such as the type of product, pricing, and customer experience can influence these rates.
  4. Real Estate: The conversion rate in the real estate industry can be relatively low, typically ranging from 1-2%. This is due to the longer sales cycle and the high involvement and consideration required for purchasing property.
  5. Financial Services: Conversion rates in the financial services industry can vary widely depending on the specific product or service being offered. For example, credit card applications may have conversion rates around 5-10%, while more complex financial products like investment services may have lower conversion rates.

It's important to note that these are just general averages, and individual businesses within each industry may experience higher or lower conversion rates based on their specific

Conversion Rate Formula

The way to calculate the conversion rate is to divide the number of conversions on a website page by the total website visitors. The result of the division is multiplied by 100.

The conversion rate formula is:

Conversion Rate = (Number of Conversions / Number of Visitors) * 100%

To calculate the conversion rate, you need to know the number of conversions (desired actions, such as purchases, sign-ups, or downloads) and the number of visitors to your website or landing page. Divide the number of conversions by the number of visitors, and then multiply the result by 100 to get the conversion rate as a percentage.

Conversion Rate Example: If, for one month, there are 1000 visitors on a website and 100 of them make purchases, then the website conversion rate is 10%.

So, how many conversion rates are considered ideal? The average conversion rate in all industries is 2.35 percent. Globally, a 1-4% conversion rate can be said to be good. However, you need to pay attention when measuring and comparing these percentages; you must consider the region, type of industry, period, and marketing strategy.

However, there are also those who are higher. The higher the conversion rate, the greater the profit.


Conversion rate type

There are various types of conversion rates that can be measured depending on the specific goal or action being tracked. Some common types of conversion rates include:

  • Sales conversion rate: This measures the percentage of leads or prospects that convert into paying customers.
  • Lead conversion rate: This measures the percentage of website visitors or leads that convert into qualified leads or prospects.
  • Click-through rate (CTR): This measures the percentage of users who click on a specific link or call-to-action (CTA) compared to the total number of users who view the link or CTA.
  • Form submission rate: This measures the percentage of users who complete and submit a form on a website or landing page.
  • Cart abandonment rate: This measures the percentage of users who add items to their shopping cart but do not complete the purchase.
  • Email conversion rate: This measures the percentage of recipients who take the desired action (such as clicking on a link or making a purchase) after receiving an email.
  • Social media conversion rate: This measures the percentage of users who take a desired action (such as making a purchase or signing up) after engaging with a social media post or advertisement.
  • Website conversion rate: This measures the percentage of website visitors who take a desired action, such as making a purchase, signing up for a newsletter, or filling out a contact form.

These are just a few examples, and the specific type of conversion rate to track will depend on the specific goals and objectives

Conversion Rate Optimization

Conversion rate optimization (CRO) is the process of increasing the percentage of website visitors who take the desired action, such as making a purchase, signing up for a newsletter, or filling out a form. It involves analyzing user behavior, identifying areas of improvement, and implementing changes to improve the conversion rate.

Analysis of Relevant Key Metrics

In doing CRO, you must first determine the problem you want to address and use metrics to monitor the overall performance of your search engine marketing strategy.

There are several types of metrics that you can use, namely:

  • Website traffic metrics: measure the performance of website visits.
  • Engagement metrics: measure audience engagement on the marketing channels you use.
  • Conversion metric: measures the number of conversions.
  • Revenue metric: analyzes the amount of revenue from selling your products.

Then, how do you find out these metrics? Tools like Google Analytics are useful enough to provide information automatically.

Define your goals

Identify the specific actions you want visitors to take on your website, and set measurable goals. This could be increasing sales, generating leads, or improving engagement.

Analyze user behavior

Use tools like website analytics, heatmaps, and user recordings to understand how visitors navigate your site, which pages they visit, and where they drop off.

Identify Bottleneck

Identify the pages or steps in the conversion funnel where visitors are most likely to abandon the process. Look for areas where user experience or friction might be a factor.

Conduct A/B testing

Test different variations of your website elements, such as headlines, calls-to-action, forms, and layout, to see which ones lead to higher conversion rates. Use A/B testing tools to compare performance and make data-driven decisions.

Optimize landing pages

Ensure that your landing pages are clear, persuasive, and aligned with the visitors' expectations. Use compelling copy, appealing visuals, and a strong call-to-action to encourage conversions.

Improve website speed

Slow-loading websites can lead to higher bounce rates and lower conversion rates. Optimize your site's speed by minimizing code, compressing images, and using a reliable hosting provider.

Simplify forms and checkout processes

Lengthy or complex forms can deter visitors from completing their desired action. Streamline the form fields and make the checkout process as smooth and intuitive as possible.

Enhance mobile experience

With the majority of internet users browsing from mobile devices, ensure your website is responsive and provides a seamless experience across different screen sizes.

Leverage social proof

Display testimonials, reviews, endorsements, or social media mentions to build trust and credibility, influencing visitors to convert.

Continuously monitor and iterate

Conversion rate optimization is an ongoing process. Monitor changes in your conversion rate, collect user feedback, and keep testing and iterating to further improve your website's performance.

Customer Service (CS)

Many potential customers find it very helpful if a company or manufacturer has good customer service.

Even though all the information about the purchase has been listed in full on the website, visitors sometimes prefer to ask directly.

The reason is that talking to humans is definitely more fun than just passing through a machine. Therefore, make sure visitors have easy access to customer service.

Through this channel, it is hoped that the chances of a purchase occurring are greater than relying solely on CTAs. One form of easy access is by displaying a help chat button on the website.

Doing Remarketing

Through remarketing, you can show ads to people who have recently visited your website on other websites they open after that.

The goal of remarketing is to maintain the desire to buy. So, the conversion rate is a very important parameter, and it can be increased by various techniques.

Conversion rate optimization (CRO) is the process of improving the conversion rate on a website or landing page. It involves analyzing user behavior, identifying areas of improvement, and implementing changes to increase the likelihood of visitors taking the desired action.


Conversion rate is a measure of success in implementing digital marketing strategies. By implementing CRO, you can find out the behavior of visitors when visiting your website. That way, this can make them do CTA, which ends up making sales transactions.

Thus, the benefits you get from implementing CRO will also increase.