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Conversion Rate (CVR)

Conversion rate is a metric in sales and marketing that shows the number of desired actions completed divided by the total number of people who saw the offer. Conversion rates help marketers measure the effectiveness of their efforts and calculate return on investment.

What is a conversion?

A conversion occurs when a visitor or lead has completed a desired action. 


There are two types of conversions, macro and micro, with macro being the primary goal of the business, such as making a purchase, and micro being smaller goals that lead up to a macro-conversion, such as creating an account.

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Micro-conversions vs. macro-conversions

A macro-conversion aligns with the primary goal of the website or business. If a business runs an e-commerce store, a macro-conversion or macro-goal is a purchase. Macro-conversions for a software company might be  visitors signing up for a paid account.

A micro-conversion or micro-goal consists of the smaller conversions that lead to a macro-conversion. This might be an email signup, registering for a free trial, or downloading a lead magnet.

illustration of people funneled through an app and converted into sales

Common conversion goals

Businesses track several conversion goals, including submitting information, calling the business, and engaging with the site.

 

Additional conversion goals may include:

 

  • Making a purchase: The macro-conversion all other conversion goals are nurturing potential customers towards.

     

  • Submitting information: When visitors submit their contact details, they become a lead. The sales team can nurture the relationship so they might become a customer.

     

  • Calling a business: Businesses providing local services or with brick-and-mortar locations may consider a phone call as a conversion.

     

  • Registering for a trial: A free account is a micro-conversion, and an upgrade to a paid account would be a macro-conversion.

     

  • Downloading an asset: This might be an e-book, a guide, whitepaper, comparison chart or other form of content. 

     

  • Engaging with the site: Engagement can include metrics like time on site, page visits, using a site’s interactive tool, commenting on posts, and sharing content.
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What does conversion rate (CVR) mean?

Conversion rates measure the percentage of people who have visited a page and completed the desired call-to-action. Continue below for a closer look at how businesses calculate conversion rates, what a good conversion rate is, and what the difference between conversion rates and click-through-rates are.

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How to calculate conversion rates

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Illustration of an individual standing next to a clipboard and calculator.

Conversion rate formula:

(Total number of conversions / Total visitors) x 100 =
Conversion rate %

Visitors can also be replaced with clicks, impressions, or leads, depending on the desired action.

Let’s take a look at an example of how a marketer might calculate the conversion rate of people who visited a landing page versus people who signed up for the landing page’s offer. If 250 people visited a landing page promoting an marketing guide and 30 of those people submitted their information to get access to said trends report, the calculation would look like this:

(Total number of downloads / Total number of landing page

visitors) x 100 = Conversion rate
OR
(30 / 250) x 100 = 12%

This trends report promotional campaign generated a conversion rate of 12%.

What is a good conversion rate?

A good conversion rate is subjective and depends on a number of factors, such as industry, cost, positioning, and offer. 

For example, a company selling expensive industrial products or services might consider a 1% conversion rate to be good, while a financial institution might consider a 10–15% conversion rate to be satisfactory.

The best way for a company to determine a good conversion rate is to set clear and unique goals, analyze industry standards, and to track and monitor individual data over time. A good conversion rate is unique to each business.

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Conversion rate vs. click-through rate

Click-through rate (CTR) comes higher in the marketing funnel and refers to the number of people who clicked on an ad or social media post.

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To go back to the example, let’s say a marketing team ran an ad to promote their trends report landing page. If 1,000 people saw the ad and 250 clicked on it, the

CTR would be calculated using this formula:

(Total number of clicks / Total number of impressions)
x 100 = Click-through rate
OR
(250 / 1,000) x 100 = 25%

We calculated the conversion rate of the landing page and got 12%. But the conversion rate of the ad would then be calculated like:

(Total number of downloads / Total number of impressions)
x 100 = Conversion rate
OR
(30 / 1,000) x 100 = 3%

When using ads to generate conversions, it’s important to keep cost per click (CPC) in mind. This helps ensure the cost per acquisition (CPA—the cost of acquiring a new customer) isn’t higher than the customer lifetime value (CLV—the total amount of money a customer is expected to spend with a business over a defined period of time).

Here are two tables that explain conversion rate:

Illustration of a table showing various ROI and profits points for various conversion rates.
Illustration of a table showing the ROI and profit points for changing CPC.

A 2% conversion rate can often be seen as a good conversion rate—and that still holds true. However, depending on the ads and their cost per click, as well as the expected customer lifetime value or even just the first purchase, a solid conversion rate might not yield a positive ROI.

Conversion rate isn’t the end-all, be-all. Other factors like CPC, CTR, and CPA can also have a big impact on ROI. But companies should still work to generate a better conversion rate.

How to improve conversion rate

Here are some ways businesses can boost conversion rates—for both micro- and macro-conversions.

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1. Pinpoint conversion goals

The first step is to pinpoint the conversion goals that are most important to the business. Once the business knows what to track, they can make efforts to improve their customer journey.

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2. Make processes easy

After determining what to track, simplify the path to conversion.

For example, if the main goal is to increase the number of people making a purchase on the e-commerce website, take a look at the checkout process.

Is the checkout process intuitive to customers? Does checkout require too many fields, is it confusing, or is it asking for unnecessary or irrelevant information? How could the business improve processes to move the customer from adding a product to the cart to completing a purchase? 

If a business wants to boost conversions, it’s essential to understand how customers convert and to make sure processes align with customer expectations and preferences.

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3. Revisit positioning of CTAs

How a company positions their call-to-actions on landing pages is essential in improving conversion rates. 

If a company wants to boost conversion rates, it’s critical to review and test call-to-actions to determine if they are strong enough and clear.  If not, adjust the call-to-action so that it captures customers’ attention and motivates the right action.

While revisiting the positioning of CTAs, it’s also critical to review the context around the landing page CTAs, including:

  • Headlines on the website and landing pages

     

  • Website copy

     

  • Visuals

     

  • Videos

     

  • Buttons and button copy

     

  • Form fields

     

  • Mobile responsiveness

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4. A/B test or multivariate test

To learn which CTA is more compelling, which headline will resonate more with website visitors, or which video better explains the product or service, consider A/B testing or multivariate testing of different options.

A/B testing, also called split testing, is when a business takes an ad or landing page and create multiple versions to see which performs better. Multivariate testing, on the other hand, allows companies to test multiple data points that help identify multiple changes within a short period of time.

Implementing changes based on test results to improve the conversion rate is often referred to as conversion rate optimization (CRO) and is a common marketing practice to help improve overall ROI and profit in the business.

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Boost performance by measuring conversion rate

The main goal of measuring conversion rates is to identify ways businesses can optimize ads, landing pages, website copy, and other content to capture the attention of the target audience, build relationships, and drive sales.


As businesses keep track of conversion rates, continually test different aspects of their site, and optimize content based on results, they learn what changes they need to make to maximize ROI. Streamline conversion tracking with your advertising campaigns with LinkedIn conversion tracking.

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