Conversion rate is used to quantify the number of users that convert on your website. When a user converts, it means that the person went from being just a visitor to an actual customer or buyer.
The rate is specified as a ratio that needs to be multiplied by 100 after knowing how many users converted. Therefore, this ratio is always shown as a percentage.
For a better understanding of how to measure conversion rate, take this example:
Imagine you own a fitness website that gets 3,000 visitors monthly. Your ultimate goal is that those who come to your website buy your fitness program. The moment a person makes a purchase would be considered as the site’s user conversion. Now, let’s say that 40 of the visitors who came to your website on month X bought the program. Only the number of visitors or users who actually made a purchase or took decisive action on your website can be considered as a conversion.
Then, the conversion rate is calculated as follows:
40 purchases / 3,000 visitors * 100 = 1.33 %. That 1,33% would be your conversion rate for that given month.
Whether that number is good or bad depends on various factors: The type of conversion (subscribing to a newsletter, making a purchase, etc.), what industry you are on, and what you are offering, etc. Depending on your particular niche, conversion rates can be higher. The average internet conversion rate is about 2,5%.
To make sure your conversion rate is as good as it can be, you need to set goals. They need to be realistic and reflect what you want to achieve with your business.