Conversion calculation formulas for an online store. Part 1

What is an online store conversion?

Every entrepreneur is concerned about the problem of developing his business. This is important for both an offline business and an online store. When working on the Internet, a businessman needs to understand how effective his marketing strategy and is, what return he receives from various promotion channels. In our article, you will find answers to questions about how to calculate the conversion rate on online services, and about what needs to be done to increase this indicator.

Various data are used to evaluate the effectiveness of online projects. The conversion of an online store is expressed as a percentage of the ratio of the number of actions of users who have achieved a certain goal to the total number of visits. For example, a ratio of one product purchase transaction to every ten visits would be called a conversion rate equal to 10%.

Target actions when visiting the site can be operations performed by the client:

  • purchase of the selected product;
  • adding the product to the “Basket”;
  • transition to placing an order;
  • account registration;
  • installing a trial version of a program, game, etc.;
  • e-mail subscription;
  • communication via chat;
  • sending a contact form.

In the process of developing an e-commerce project, the business owner is of course most concerned about the final goal — the purchase. It is worth trying to break this goal into several tasks and work on each one. For example, you put a demo version of your game on the landing page, but the number of downloads of the trial version is high and sales are low. Then you should look for the reason for refusing to buy the product. If you continue to research the motivations of users and try to implement a lead magnet for sales, you can achieve higher results.

How to calculate the conversion of an online store?

So, the conversion of the online store is calculated as follows:

    1. Find out the total number of visitors to the site for a certain period. These data can be obtained using free and paid services: SimilarWeb, Alexa and Gooogle Analytics.
    1. Taking into account the goals set during the implementation of the marketing strategy and the goals of the business, conversion can be considered differently.

Use the formula to calculate the conversion rate:

Conversion rate = number of conversions/number of visitors * 100%.

For example, if your website has 1,000 visitors and 20 conversions per month, simple calculations on the calculator will show that the conversion rate is 2%.

Formula and examples of online store conversion calculation

The total percentage of conversion of an online store can differ significantly from indicators for individual areas. The overall (total) traffic conversion rate is measured while considering account conversions from all sources: search, social networks, other sites, etc.

Data on the conversion results of different channels are tried to be obtained to evaluate how effective the advertising campaigns were, to compare the number of performed targeted actions regarding conversions from the Google contextual media network, and targeted advertising on Facebook or Instagram. You can see the best converting channels and focus your efforts on them.

For example, you sell sports equipment on your resource and use 3 promotion channels: PPC advertising, SEO optimization, and promotion on social networks. Calculating the conversion rates from these campaigns will answer which of the directions is more profitable. You will be able to reduce advertising costs in other channels.