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What is Conversion Rate and Why is it Important?

Published 25 January 2023
Last updated 25 April 2024
What is Conversion Rate
What is Conversion Rate and Why is it Important?

Do you want to know the key metric to help you improve your online business? Conversion rate is the answer.

Conversion rate can measure the effectiveness of a website or marketing campaign in turning visitors into customers.

In this article, we’ll explore conversion rate, how to calculate it, and why it is crucial for your business

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What is conversion?

Conversion can refer to various things depending on the context, but generally, it refers to changing or converting one thing into another.

It can also refer to the successful completion of a desired action or goal, such as converting a website visitor into a customer or converting a lead into a sale.

What is conversion in marketing?

In marketing, conversion refers to turning a potential customer into a paying customer by getting them to take a desired action, such as making a purchase, signing up for a service, or filling out a contact form.

This desired action is known as a “conversion,” and the rate at which conversions occur is known as the “conversion rate.”

What is conversion rate?

Conversion rate is a metric used to measure the effectiveness of a marketing campaign or website in converting visitors into customers.

It is typically expressed as a percentage of visitors that come to your website and the completion of the desired goal or conversion out of the total number of visitors you have.

A high conversion rate indicates a successful web design and marketing strategy. This means people are interested in and want what you offer and can quickly get it.

Additionally, this rate can determine the success of a company’s sales and marketing efforts. However, in practice, this percentage often needs to meet expectations.

What is a good conversion rate?

A “good” conversion rate can vary depending on the industry, the type of product or service being offered, the channel, the target audience, and the marketing goals.

Remember that a high conversion rate is only one aspect of success. Other elements, like customer satisfaction, repeat business, and profitability, must be considered.

What about the e-commerce conversion rate? What is a good e-commerce conversion rate?

As explained before, a “good” e-commerce conversion rate can vary depending on the industry, the type of product or service offered, and the marketing goals. However, on average, the conversion for e-commerce websites is around 2-3%.

It’s worth noting that the rate can vary greatly depending on the industry. For example, the conversion rate for fashion e-commerce is usually lower (1-2%), while for electronic e-commerce is a bit higher (3-4%).

Why is conversion rate important?

Conversion rate is an important metric because it measures the effectiveness of a marketing campaign or website in converting visitors into customers.

A high conversion indicates that the marketing campaign or website is more effective because a more significant proportion of visitors complete the desired action, such as making a purchase or filling out a contact form.

On the other hand, the conversion rate is important because it helps businesses to:

  • Measure the effectiveness of their marketing campaigns and website optimization efforts.
  • Identify areas that need improvement and optimize their website or campaigns accordingly.
  • Make data-driven decisions to improve performance.
  • Track the progress of their actions and measure the return on investment (ROI).

How to calculate conversion rate?

The formula for calculating the conversion rate is as follows:

Conversion Rate = (Number of conversions / Number of total visitors) x 100%

For example:

If a website receives 5000 visitors and 1250 of them make a purchase, the conversion rate would be (1250/5000) x 100% = 25%.

Note: You can calculate the conversion rate for any action desired by the marketer, not just purchases.

Why is conversion rate low?

There can be many reasons a conversion rate might need to be higher. Some common causes include the following:

  1. Poor website design: A website that is difficult to navigate, has a poor layout, or has slow load times can frustrate visitors and make them less likely to take the desired action.
  2. Lack of trust: A website with no professional appearance, customer reviews, or a clear privacy policy can make visitors skeptical about making a purchase or providing their contact information.
  3. Weak call to action (CTA): If the CTA on a website needs to be clarified or prominent, visitors may need to know what to do or be motivated to take the desired action.
  4. Poor targeting: A marketing campaign targeting the wrong audience or using bad channels may not reach the most likely to convert people.
  5. Unattractive offer: If the promoted request or product is not appealing to the target audience, they may not be motivated to take the desired action.
  6. High price point: A product or service with a high price point may make visitors less likely to convert.


In the end, the conversion rate is a metric that can assist you in determining the degree to which visitors to your website or marketing campaigns become customers. You can grow your business and make more money by tracking and improving your conversion rate.

However, you can also use CRM and Omnichannel software from Mekari Qontak to increase your conversion rate. With Omnichannel and CRM, you can personalize the customer journey and increase conversions. Sign up for Mekari Qontak now and start seeing results!


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