What does conversion mean and what is conversion rate

What is conversion and what does it mean in online shopping?

Conversion is one of the most important KPIs used to measure the effectiveness of online shopping.

Conversion refers to a certain pre-defined action that a potential customer takes in an online store. The most important targeted action is of course the purchase, but adding the product to the shopping cart and joining the email list are also examples of conversion events.

From the point of view of online store success, conversions should and should be measured. This data provides valuable information about how well the online store works (or doesn't work) and how it can be improved.

By tracking conversions, you can invest in doing the right things in the online store, instead of spending time and money guessing on something, the effectiveness of which is not guaranteed.

Online store conversion rate

Online store conversions are measured using the conversion percentage. The conversion rate is the proportion of visitors who complete a predefined action

The conversion percentage can be calculated by dividing the number of conversions by the number of visitors to the online store and multiplying the result by one hundred (conversions / number of visitors * 100) .

For example 100 / 2000 * 100 = 5%

In practice, the conversion rate tells how many percent of a hundred visitors take the desired action, i.e. add a product to the shopping cart, buy a product, download a brochure or free product, join an email list, leave a contact request, etc.

The higher the conversion rate, the better the online store meets the needs and expectations of potential customers, and the more efficiently it also converts (sells).

By measuring and tracking conversions, you can e.g. to find out how long people spend on certain pages on average, and to improve their effectiveness.

What is a good conversion rate?

A good conversion rate , which every consumer online store should at least reach, is about 2-5% .

If the conversion rate of the online store does not reach this range, the reason for its effectiveness or inefficiency should be looked at more broadly and the problems corrected with the help of conversion optimization. We'll talk more about optimization below.

However, achieving a perfect conversion rate is not possible, as not all online store visitors have the potential to convert.

It is quite common for a purchase transaction to be interrupted when a potential customer stops surfing the web or compares several options at the same time.

A similar product can also be found from a competitor at a cheaper price, so in order to get a conversion, your online store must have some way to stand out and offer added value to the customer.

The customer is also often at the beginning of the buying process, when he is looking for information about the products, but is not yet ready to buy.

Conversion optimization increases sales in the online store

Conversion optimization is the process of increasing the conversion rate of an online store. It includes measures to improve the efficiency of online shopping with the goal that more and more visitors convert, i.e. perform the desired action.

During conversion optimization, the factors hindering the occurrence of purchases and other targeted conversions are identified through in-depth background research and A/B testing, and these problems are resolved.

The purpose of optimization is to practically make the online store meet the needs of potential customers and thus increase the number of conversions.

Conversion optimization increases the conversion rate

Conversion optimization increases the conversion rate and online store sales by instilling trust in the customer, fueling interest and encouraging them to continue from viewing the products to paying at the checkout.

An optimized online store and a good shopping experience also encourages old customers to return to shopping.

However, a seamless customer experience in an online store doesn't happen by itself, because you have to do the right things for it .

In conversion optimization, the technical (slow loading time, confusing implementation, non-functioning buttons, etc.) and non-technical aspects (bad product images, insufficient product descriptions, unclear return conditions, etc.) that hinder the purchase and experience are minimized by improving the speed of the online store, mobile responsiveness, appearance, content, navigation structure and site functionality.

At the same time, there may be a need to work on instilling trust with the help of a credible brand that appeals to the target group, high-quality, brand-appropriate and sufficiently broad content, and, for example, payment and delivery methods suitable for the customer.

If the initial situation of the store, i.e. the technical implementation, is really bad or badly behind the times, often acquiring a completely new online store is a cheaper, faster and significantly more successful process compared to optimizing a non-functioning online store implementation.

So it doesn't always make sense to fix the old, at least when talking about online stores and conversions.