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What is the Conversion Rate, its importance and How to calculate the conversion rate?

What is the Conversion Rate, its importance and How to calculate the conversion rate?

What is your Conversion Rate? This is the most asked question for those businesses who are running advertising campaigns.

Some people think it's a complex formula that can't be described in words or doesn't have any idea how to answer this question. Well, if you're struggling to answer this question and want to know everything about conversion rate, then you're at the right place. In this article, we've covered everything about conversion rate, its types and how you can calculate conversion rate. By the end, all your queries related to conversion rate will be cleared, and you can confidently answer this question.

Without any further delay, Let's begin!

What is the Conversion Rate?

A Conversion Rate is a simple formula used by businesses to measure the performance of their advertising campaigns and figure out their sales, profits/loss, budget and other marketing activities. In simple words, with conversion rate, you can calculate the percentage of visitors on your website, landing page or store who are converted into your customers. It's one of the most important metrics for businesses to understand the performance of their marketing campaigns and the best possible way to optimize the campaigns and get better results.

How to Calculate Conversion Rate?

To calculate the conversion rate for your campaign, you can use a simple formula, i.e.,

Total number of conversions divided by the total number of visitors and multiplied by 100%


Conversion Rate = (Total number of conversions / Total number of visitors)*100

With this formula, you can easily find your business's conversion rate.

Let's understand with an example!

If you're running an e-commerce store and want to analyze your store's conversion rate, then you can use this ecommerce conversion rate formula to get results.

Many businesses use the conversion rate formula to identify sales, but many want to identify leads, clicks and conversions percentage and track these results. There are some other types of conversion rates used by companies like:

  • CPL
  • CPC
  • CCR
  • CPA

Let's discuss these metrics in detail!

CPL (Cost Per Lead)

CPL is also known as Cost Per Lead, and this metric is used by businesses to figure out the cost for each lead generation through their advertising campaigns. Cost per lead is one of the important metrics used to identify the cost for each lead and how to optimize the campaign to get leads at less cost.

The Cost Per Lead formula is:

Cost Per Lead (CPL) = Total campaign cost / Total amount of leads

CPA (Cost Per Action)

CPA is also known as Cost Per Action, and this formula is used by businesses to identify the cost for each action/result through marketing campaigns. Many businesses use this metric regularly to identify the cost for each action, like sign-up, sales, form, etc. With this metric, it's easy for businesses to identify the cost spent to get each action and how to optimize the campaign.

Cost Per Action formula is:

CPA = Total campaign cost / Total amount of conversion

CCR (Click Conversion Rate)

CCR is also known as Click Conversion Rate, and this formula is used by businesses to identify the conversion percentage of the total number of clicks through advertising campaigns. With the Click Conversion Rate (CCR) metric, businesses can understand how many clicks on a website/landing page are converted into customers.

Click Conversion Rate formula is:

Click Conversion Rate (CCR) = Total number of conversions / Total number of clicks

CPC (Cost Per Conversion)

CPC is also known as Cost Per Conversion, and this formula is used by businesses to identify the cost for each conversion through advertising campaigns. Cost Per Conversion (CPC) is one of the essential metrics to identify the budget spent on each conversion and the best way to optimize the campaign and get conversion in less amount.

Cost Per Conversion formula is:

Cost Per Conversion (CPC) = Total campaign cost / Total number of conversions

These are some important metrics used by businesses to identify different conversions per their requirements.

Types of Conversions

For different businesses, there are different conversions available that help them to analyze the performance of their marketing campaigns and grow their business. Here are some important types of conversions:

  • E-commerce store
  • Submitting form
  • Sales call
  • Website engagement
  • Live chat engagement
  • Download App/File
  • Subscription
  • Free-trial
  • Account creation
  • Button click
  • Content share/engagement

These actions are also counted in conversions as per business requirements.

Importance of Conversion Rate

For businesses, the conversion rate is the most important element for their business growth. By using conversion rate, any business can analyze the performance of their marketing campaigns and what are the things that generate results. So that after reviewing the campaign, they can make the changes according to what works best and run campaigns more effectively to get better results. Conversion Rate is a simple formula that helps businesses identify how many people are interested in their products/services and how many are getting converted into customers. These statistics help them make the right decisions, enhance their marketing campaigns, and target only potential customers to increase sales and conversions.

It's important to know whether your efforts are putting in the right place or you need to change the direction to get better results and to know the right direction; conversion rate is the most effective metric that helps businesses to analyze the performance of advertising campaigns and the best way to optimize the campaigns for better results.

Conversion Rate Tracking

You need to track your conversions if you want accurate results for your advertising campaigns. So that you can use this data to analyze and understand the best way to optimize your marketing campaign. Many helpful tracking tools are available in the market that help you track your conversions on your website, landing page or store and give you accurate data to analyze.

Here are some top-rated tracking tools:

  • Google Ads
  • Google Analytics
  • Facebook Ads
  • Twitter Ads
  • Pinterest Promotion

These tracking tools help you keep an eye on each conversion so that later you can analyze the data, optimize your campaign, and generate better results.

But the question is, How do we optimize the conversion rate?

Conversion Rate Optimization

Once you've applied a conversion rate metric to analyze the performance of your advertising campaigns, then it's time to make the changes in the campaign based on the performance of campaigns and what brings you better results. To improve your marketing campaigns, you can use Conversions Rate Optimization (CRO) and increase your conversions more effectively.

Here are some effective ways to optimize your conversion rate:

1. Create attractive Landing Page

Landing Page is one of the most effective ways to increase sales and generate desired results. If you're running paid advertising campaigns, you should bring your potential traffic to the landing page to increase the chances of getting more conversions. Landing Page is specifically designed to promote products/services in the most effective way that can catch customers' attention and encourage them to make buying decisions faster. So if you want better results from your campaigns, you first need to create a convertible landing page.

2. Come up with a Hypothesis

The hypothesis is an essential element that makes any website or landing page more attractive and powerful. If you're building a landing page, then you need to add some essential elements that increase the chances of conversions like:

  • Headline: You need to make strong headlines that give strong reasons for customers to make buying decisions faster. You need to test many headlines on your website and see which headlines bring you amazing results for your business.
  • Irresistible Offer: You need to come up with an irresistible offer that can't be ignored easily and make interest for the customers to take action and get desired results. You must create unique offers that stand out from your brand and increase sales.
  • Call-to-action (CTAs): A right call-to-action can give you the best results. If you've built a strong landing page, you need to add so many CTAs to your landing page that it gives you better results and more conversions.
  • Media: Photos & videos are the most important factor that brings more sales and conversions to your website. If you want to grow your business, make sure to use high-quality photos & videos to catch customers' attention and increase sales.
  • Make your website Mobile responsive: Billions of people are using smartphones actively, and there's a high chance of your potential customers visiting your website through a smartphone. So make sure to create your website mobile responsive so that customers can easily visit your website and take action. Try to make a user-friendly and interactive website that supports almost all devices and runs smoothly.

3. A/B Testing

A/B testing is one of the effective ways to optimize the marketing campaigns and increase conversions. In A/B testing, you can compare two advertising campaigns and compare which campaign gives you better results.

For A/B testing, you need to set up two campaigns and run advertisements for similar results but different audiences, landing pages or other elements and then let them run for a specific period. After running these two campaigns for a specific duration, you need to consider these factors to optimize your campaign:

  • Find your Targeted Audience to get desired results: Once you've both advertisement campaigns data, then you can analyze and find your potential customers who are buying your products/services and then you can remake your targeted audience so that you can run ads only for those customers who are ready to make buying decisions.
  • Find out where you're losing customers: The most important element for campaign optimization is to find out where you're losing customers and what things are not giving you results and force customers to leave without purchasing. Once you've analyzed the campaigns and found the problems, understand the best possible solutions to resolve these issues.
  • Make a list of potential changes required: Now, it's time to make a list of potential changes required in your new campaign to make it profitable and increase the chances of getting better results. You should make the changes according to the goal you want to achieve after running campaigns.
  • Setup A/B Testing: Again, you need to set up two different advertising campaigns to compare and check which campaign works best for your business and increases sales. Later, you can focus on results-oriented campaigns.
  • Analyze your Results: Once you've run both campaigns, see which one is working better and if you've found your desired results campaigns, then no need for A/B testing, but if you haven't found then keep doing A/B testing.

4. Add Social Proof

You can display social proof on your website and encourage visitors to take actions like purchase and fill out forms. With social proof notifications, you can engage with visitors, generate qualified leads and increase sales for your business. You can use these amazing social proof notifications for different purposes like e-commerce stores, websites and landing pages. There's human psychology behind social proof notifications because these notifications show particular activity. Whenever visitors come to the website and see these notifications, it encourages them to take similar actions like purchases and leads. You need social proof notifications to increase conversions and grow your business. WiserNotify is the #1 best social proof notifications platform that supports 250+ platforms, including landing page builders, WordPress, email marketing tools, etc., display different types of social proof notifications and increase conversions rate.

Some Factors that can affect the Conversion Rate

By analyzing the performance of advertising campaigns, businesses can easily improve their campaigns and get better results. But campaign optimization is not only the solution. Many other factors can affect the conversion rate:

  • Fewer Payment options
  • Poor landing page
  • Slow loading speed
  • Captcha requests to access the website
  • High-quality photos
  • Wrong colors selection
  • Unsafe payment process
  • The complex process of finding out anything
  • Unreadable fonts
  • Wrong link

And there are many more factors that can affect the conversion rate for your business. So it's essential to consider these factors and improve your marketing campaigns and get better results and more conversions.


Conversion Rate is one of the essential metrics that every business should consider to analyze the performance of their marketing campaigns and grow their business. This metric helps businesses understand their advertising campaigns' performance and how to make them better and generate desired results. We hope this article helps you know about conversion rate, its types, importance and how to optimize campaigns to get better results.