For today's Whiteboard Wednesday, we’re here to talk through a big question we get all the time: What is on-site conversion and how do you calculate your conversion rate?
Watch the video below or continue reading for a full transcript:
Hey everyone, Josh here from Privy. For today's Whiteboard Wednesday, we’re here to talk through a big question we get all the time: What is on-site conversion and how do you calculate your conversion rate? If you’re new to this whole ecommerce thing, it may sound kind of complicated, but it’s actually easy to figure out.
When we say conversion, we simply mean of all the people who visit your site, how many of them sign up for your list or buy something from your store? This is a great way to see how well your store is performing.
Think about it this way. Imagine you own a store in a local shopping mall.
On any given day, 100 people walk in to take a look around. Of those 100, two of them decide to buy. You would have an in-store conversion rate of 2%. This is exactly what we’re talking about with your online store, but with traffic numbers instead of walk-ins.
To calculate your conversion rate, you’ll want to know:
How many people visited your website or online store? You can find this in your Google Analytics sessions.
How many of those your visitors gave you their contact information?
How many made a purchase?
So, look at all your signups and sales from that same week, remove the duplicates from your count, and you’ve got what you need.
Let's illustrate why this is so important with some simple math. Let’s assume that every time someone makes a purchase from your site they spend $30.
If you have 1000 visitors daily, and you convert 1% of them to a paying customer, then you’ll take in $109,500 annually. At 2%, that’s $219,000. And at 3%, you’ve just bagged $328,500!
By improving your conversion rate, you can significantly impact your business without spending any more money to drive traffic to your site.
So, now you know! Stay tuned for future Whiteboard Wednesdays each week. Catch you next time!
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