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    Conversion Rate Formula: Calculate & Increase Ecommerce Conversion Rate

    By Josh Mendelsohn
    10 minute read

    Whether you’re just getting started with ecommerce or already a seasoned professional, understanding and improving your website conversion rate is critical to growing your ecommerce business. There are a ton of buzzwords and important metrics around conversion rate optimization (look, there’s another one!), so we’ve put together a post breaking down what conversion rate actually means and how to run tests to improve it.

    Table of Contents:

    What is conversion rate?
    The conversion rate formula
    What is the average ecommerce conversion rate?
    6 metrics to measure and improve conversion rate with Privy 
    How to test your conversion rate in 3 steps
    6 ecommerce conversion rate tests for your digital marketing campaigns
    How to increase your ecommerce conversion rate
    Conversion rate formula FAQs

    What is conversion rate? 

    Conversion rate is the number of people who complete an action on your website divided by the total number of website visitors. The act of completing the desired action is a conversion. For example, if your website gets 100 visitors a month, and 20 of them purchase a product, your sales conversion is 20%. 

    Businesses use conversion tracking to understand the return on investment for each marketing strategy. This is because conversion rates offer insight into the factors that convince potential customers to become paying customers. This concept can be applied to pretty much all digital marketing efforts like your website, social media, and AdWords. Ultimately, this is a very telling metric that business owners use to increase the bottom line.

    The conversion rate formula

    The simple conversion rate formula you can use for calculating CVR is:

    Ecommerce conversion rate = (Total store transactions/Total visits to website) * 100

    Here’s a practical example:

    (10 transactions / 400 visits) * 100 = 2.5% Conversion rate

    The simplest way to think about conversion rate is this: Your conversion rate is the number of visitors that come to your site that actually take an action you want them to take, whether the goal is to sign up for your email list, fill out a form, or make a purchase from your site. If you have more than one goal for your website,you can rely on the same conversion rate formula and track them individually as well as on the whole for each unique website visitor.

    • Subscriber conversion: Unique visitors / # of new subscribers
    • Shopper conversion: Unique visitors / # of new customers
    • Total site conversion: Unique visitors / # of people with any conversion*

    To effectively grow, each of those rates is important to the success of your business. That means you should be putting dedicated marketing efforts and strategies in place to improve each of those numbers individually through A/B testing or sequential testing.  And as you get better and better, you can add more conversion rate optimization metrics like the rate of subscribers who become customers, repeat visitor conversion rate, and more. 

    Note: If you are calculating the total conversion rate for a marketing campaign, don't add the total number of customers and subscribers. You should be looking at the number of people who have done one or both of those things, but be careful not to double count.

    What is the average conversion rate in ecommerce?

    Industry data shows that an acceptable ecommerce conversion rate is between 1% and 3%. That means that the vast majority of people hitting any website leave without taking any meaningful action.

    This is a good benchmark for ecommerce store owners to be aware of before they dive deep into CRO (conversion rate optimization) and provides great context for marketers. If you’re expecting a 50% conversion rate, you’ll need to reset your expectations, but it’s not unheard of to make significant leaps and bounds by investing in conversion-focused strategies. In fact, we see it all the time.

    One example of this is a company called Project Repat. Their business is pretty cool. You ship them all of those old t-shirts that don’t fit but you refuse to throw out, and they turn them into a cozy, blanket full of nostalgia.

    project repat

    After being in business for a while, they realized that their service was difficult to sell in one site visit. But they were paying an arm and a leg to drive traffic so they built some educational nurturing emails and decided to make their primary first visit goal an email capture. When they shifted that focus, and targeted each referral channel with relevant messaging, they started turning 12% of traffic into subscribers.

    They didn’t stop there. When the nurturing emails drove subscribers back for purchase, they added some additional on-site displays based on how much value was in a visitor’s shopping cart and were able to reduce the number of carts that would normally abandon by 10%.

    That's the type of conversion rate improvement that's possible when you start systematically testing your way to success. Another useful step is to map your campaign performance against email marketing benchmarks.

    6 metrics to measure and improve conversion rate with Privy 

    privy reports

    Once you've invested time in building out your onsite conversion campaigns in Privy, you'll want to see how each individual campaign is performing the number of conversions, and how you are performing across all of your campaigns. Below are six of the metrics that our users find most helpful for getting higher conversion rates.

    1. Sign-up rate

    Sign up rate shows you what percentage of people who see your campaigns are signing up. If your campaign conversion rate is low, you may want to check your offer, adjust your template, assess the webpage to see if there’s room to improve the user experience, or modify your targeting.  

    2. Redemption rate

    This metric shows the percentage of people who have received a discount code and actually made a purchase. To improve this number, you may want to test multiple offers and see what performs best.

    3. Sign-ups by display type

    Not sure whether you want to be using pop ups, flyouts, banners, or bars? Comparing the sign ups of each display type can help you decide what type of campaign to build next.

    4. Sign-ups by trigger type

    Wondering if exit intent is driving more sign ups than a timer or scroll trigger? Using this metric, you can see which triggers are most effective at driving sign ups across one or all of your lead generation campaigns.

    5. Link clicks for each campaign

    If you’re using “no form” campaigns or just including links in your displays, you can see which links are performing best for one campaign or across all of them.

    6. Sign-ups by source

    This metric shows you where the most qualified traffic to your site is coming on based on the UTM Source (is it coming from Facebook ads, Google ads, organic traffic, etc.). If you’re, for instance, spending money on PPC to drive people to your site, you can use this information to invest more or less based on the results.

    How to test your conversion rate in 3 steps 

    Before you jump into the deep end of the testing pool, there are some important things to think about that will help you understand your results and what to do next to increase the total number of conversions and boost your campaign efforts.   

    1. Develop a hypothesis

    The first thing to do before launching any test is to come up with a hypothesis. Basically, what do you think will happen and how will you go about proving it?

    For example, imagine testing out a button color. You may have the hypothesis that the blue button will drive more conversions than the green one. This is important because it forces you to have a reason to run a test instead of saying, “it would be interesting to know…” You’re going to reach a firm point of view once you have the data in hand.

    With that hypothesis in mind, you can then have clear decisions that you know you’ll make ahead of time depending on the results you get. For example, if the blue button wins, you will change all of the buttons to blue in your pop-ups.

    When you’re thinking about any test, it’s also important to limit the number of variables to one. If you change a bunch of elements in your campaign all at once, you’ll never know exactly what drove the change in results. We then need to dive into multi variant testing. For example, if you’re running that same button color test, but you also change the copy of your pop up, how will you know whether it was the button or the copy that drove the difference in results?

    Does that mean you can’t test full sets of creative (image + color + copy) against each other?

    No. It just means you need to be conscious of what you are learning and how you apply it to other related items. So, you can know that one full pop up performed better than another but you’ll want to avoid taking a single element of the pop-up, like a button color, and making the leap to site-wide changes.

    2. Use directional data

    Data purists will tell you that the only reliable tests are ones that are statistically significant. That basically means that enough people have been a part of the test to make the results relevant to a broader sample. The important thing is that whenever possible, you want a large sample set that can reach the point of being trustworthy.

    Unfortunately, most of us don't have the volume of web traffic that makes running those types of tests practical. That's totally fine—you can run directional tests instead that can still be incredibly valuable, even if not 100% reliable.

    Think about it this way. Would you be better off asking 30 friends a question to see what a majority of people think, or would you rather just trust your gut? While the results of that questioning might not be bullet-proof, they certainly should help shape your opinion about what to do next.

    3. A/B tests vs. sequential tests

    If you’re new to the testing game, you might be wondering what an A/B test is. It’s actually very straightforward. In an A/B test, you create two versions of something, like a pop-up or landing page, ideally with only one variable changed, and split your web traffic at random to send a certain percentage of people to one page vs. the other. Then, you evaluate which version drives more conversions and pick a winner.  

    The great thing about an A/B test is that it automatically accounts for all other factors because the only difference between one set of visitors and another is what they are seeing on your site. The time of year is the same and your offer is the same. The weather is the same. You get the idea. You’re limiting the outside influences that impact the results of your test.

    Sequential testing, on the other hand, means that you are doing one thing for a period of time.

    You make some changes and leave them for the same period of time. Then, you compare the results. This is easy to execute, but harder to correctly analyze, because any number of other things could have impacted the results that are out of your control.


    In a perfect world, we would all be running statistically significant A/B tests and we’d be learning and improving rapidly. The next best scenario is to run directionally valid A/B tests. The last choice (that's still way better than nothing) is to run sequential tests. You can still learn a lot if you combine your instincts with the results.

    6 ecommerce conversion rate tests for your digital marketing campaigns

    Whether you are running A/B tests or sequential campaigns, there are a number of campaign elements worth testing to figure out what works best for your site and helps you achieve a good conversion rate. The six below are just examples of common tests you can try right away. By continually testing variations of your campaigns, you can optimize them even further.

    1. Trigger timing

    For example, test whether a 10-second time-based trigger converts at a higher rate than a 30-second time-based trigger.

    2. Display type

    For example, test whether a pop up converts at a higher rate than a flyout for your mobile visitors.

    3. Offer

    For example, test whether free shipping on orders of $50 or less converts at a higher rate than a 10% discount.

    4. Headline

    For example, test whether a straightforward headline helps achieve a higher landing page conversion rate than a light-hearted one.

    5. Button color

    For example, test whether a blue submit button converts at a higher rate than a red submit button.

    6. Background image

    For example, test whether using a background image converts at a higher rate than a plain color background

    Whether you start with one of these tests or something completely different, it's a great idea to map them out for the next few months so you're always learning and improving your site.

    How to increase your ecommerce conversion rate

    Taking what we have discussed above into account and continually testing your hypotheses will lead you down a road of increased conversion rates.

    Note that increasing your conversion rate may take time, and that is part of the process. You can start at one part of your marketing funnel that you feel is the most important and continue this process for each part. Allow yourself and your business the needed time to experiment with tests, see results, and then make adjustments. 

    Utilizing Privy as your conversion rate tool with the tests listed above can provide you an easy and quick start to optimizing your store for more sales.

    Ready to get started improving your conversion rate?

    Try it with privy (It's Free)


    Conversion rate formula FAQs

    How do you calculate the conversion rate for a website?

    The conversion rate for a website is calculated using a conversion rate formula:

    Conversion rate= Total number of website conversions / Total number of unique website visitors

    What is a standard conversion rate?

    A standard conversion rate is between 2% and 5%. However, it is important to note that an average CVR differs between industries and that top brands typically enjoy higher conversion rates.

    How do you calculate conversion rate in percentage?

    To calculate conversion rate in percentage, take the result you get from a conversion rate formula and multiply it by 100.

    Topics: Website Conversion

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