What Does Conversion Rate Mean?

Quick quiz: Which of the following is the correct definition of “conversion rate”?

A. sales / unique visitors
B. sales / total visits
C. actions / unique visitors (e.g. home page test, conversion goal is not a sale but a reduced bounce rate or a click on the main call to action)
D. sales / number of carts initiated
E. sales / relevant visitors (segmented by geography, campaign, etc)
F. (sales – refunds) / unique visitors

Answer: Any or all of the above may be considered a conversion rate. It truly depends on what you think is the best formula for measuring success. The important thing is that you have your calculation of conversion rate defined within your organization, and be careful when looking to external benchmarks (industry data, competitive data etc) to gauge what your target conversion rate should be. You may be comparing apples to hot dogs.


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