The good thing about online advertising is that you can count almost everything. That's why we use so many different metrics and measure the effectiveness of each marketing activity. However, the key metric is sales conversion, because what's the point of advertising if it doesn't generate income in the form of clients? Let's take a closer look at the definitions of this metric, find out how to calculate it, and what to do to ensure that the metrics only grow.
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Definition of conversion
In different businesses, this indicator is calculated differently not only in quantitative but also in qualitative terms. For example, for a marketplace seller, it is a paid order, for a copywriter, it is the number why would you choose our database of clicks from an article or landing page to a website. We will focus on sales conversion, which is expressed in the ratio of real buyers to potential ones, multiplied by 100%.
To understand how to correctly calculate this indicator, let's look at the simplest sales funnel that can be built on any website or online store.
Example of a simple sales funnel
At different stages, users are eliminated, and those who reach the end become your clients. Closer to the end, the funnel narrows and the conversion percentage will become smaller. The logic is as follows:
Number of site visitors - 200
Number of people added to cart - 80
Number of paid - 10
Thus, the conversion rate (CR) can be calculated in two ways: by calculating the overall rate from site visitors or by determining it separately for each stage of the funnel.