How to Calculate Sales Conversion Rate

April 22, 2020

In marketing terms, a conversion is when an individual acts in response to your call to action (CTA). For instance, most websites have a form where visitors are asked to sign up in order to get weekly newsletters. Any individual who signs up to the newsletter is a conversion.

However, a lot more goes into it. When an individual actually clicks and reads the newsletter, it qualifies as a conversion. A conversion can also happen when a client takes advantage of a discount coupon sent out by the site owner. Pretty much every response to your call to action is a conversion. The real conversion rate, however, is the one that results in a sale, hence revenues for the business.

What is conversion rate?

It’s pretty easy to track your conversions. It’s as simple as tracking the number of customers who have called you, picked up the phone, filled out the form, or signed up for the weekly newsletter.

Tracking your site’s conversions will assist to have an idea of which marketing tools offer optimum conversions. Using that data, you can easily and quickly calculate your conversion rate.

How to calculate your sales conversion rate

There are basically two methods used to calculate sales conversion rate. The first approach is to sum up the number of sales over a period of time and divide that by the total number of visitors and then multiply by 100. For example, if the total number of sales in a given period was 200, and the total number of visitors was 5,000, then it would appear like this:

Sales conversion rate = 200/5,000 = 0.04 * 100 = 4% sales conversion rate.

This ideally means that 4% of all the visitors to your website actually lead to a sale. The second method of calculating sales conversion rate involves the use of a unique set of site visitors. For instance, visitors emanating from search engines, particularly, those accessing your site via search queries, sometimes known as organic visitors.

You can calculate using both criteria and determine which is more accurate. However, calculations based on organic visitors almost always give accurate results.

Conversion rate is a vital topic for online businesses in the modern world. It precisely calculates the percentage of customers who actually buy products and services on the site, as well as, enable the site owners to measure customer decisions accurately.

These days, conversion rate optimization (CRO) provides a structured approach to boost the performance of your website. It is an important tenet when it comes to evaluating your current standing and making future decisions.