THE DEFINITIVE

##### Chapter 2

## How Do I Calculate My Conversion Rate?

Your conversion rate measures the performance and effectiveness of your landing page or website page. It’s the number that tells you how many people are taking a specific action that drives your business forward.

*So how do you calculate conversion rate? What do these calculations do for your conversion rate optimization?*

We’ve already covered what conversion rate is in Chapter 1, but let’s start with a quick refresher before diving in.

**What is a conversion rate?**

Your conversion rate tells you how many page visitors are taking the desired action.

For example, you want visitors on your landing page to input their email to receive a PDF downloadable. That’s the “action.” When someone takes that action, they “convert” from a visitor to a lead.

The number of people who input their email is the number of conversions your page has and measures how successful your page is at getting those conversions.

Another example would be making a sale on a sales page. The lead then “converts” into a customer once they’ve made a purchase. How many leads are becoming customers? This tells you how successful that sales page is.

**How to calculate conversion rate**

To calculate your conversion rate, take the number of people who took the “conversion action” and divide it by the total number of sessions or views on the page.

Therefore, the website conversion rate formula is: **number of conversions ÷ number of views/sessions**

Let’s look at sales on your sales page as an example. The goal of the page is for customers to make a purchase.

Your sales page gets 500 unique views. These are referred to as “sessions.” This can include the same visitor viewing more than once. For example, you could have 400 unique visitors with 500 sessions (unique views), if some of your viewers visited more than once.

Now, of those 500 views, you make 25 sales.

To get your conversion rate, you divide 25 (conversions) by 500 (sessions) and get 0.05. This means you have a 5% conversion rate for that sales page.

That may sound low, but that’s actually pretty good for a sales page conversion rate. We’ll get into what a “good” conversion rate is in Chapter 3.

We’ll look at another quick example, but with backward math. Let’s say the goal of your landing page is to collect emails in exchange for a lead magnet. Your landing page is currently converting at a rate of 3%. You have 10,000 unique views. How many email addresses are you getting? Multiply the number of views (10,000) by the conversion percent (0.03), and you’ll get the number of conversions you’ll end up with (300). So you’re getting 300 emails.

**How to calculate conversion rate lift**

Ok, so you’ve performed your A/B test and have found that your new variation has a higher conversion rate than your control variation. But how do you determine how much your conversion rate improved?

The difference between the two conversion rates is called conversion rate lift and the formula is as follows:

(New conversion rate - old conversion rate) / old conversion rate x 100 = conversion rate lift

For example, let’s say the conversion rate of your control variation is 15% while your new variation has a conversion rate of 20%.

(20 - 15) / 15 x 100 = 33.3%

You can also apply this formula to measure changes in your conversion rate month over month or quarter over quarter to track your improvement.

**How to find and analyze conversion rate data**

You can use your Leadpages analytics dashboard or Google Analytics to find this data and see how many visitors are on each page and which actions those unique visitors have taken. For a complete understanding of how your web visitors behave, easily add tracking code to your website and landing pages (such as your Google Analytics tracking code or Facebook Ad pixel) to track specific actions, like Facebook ad conversions, email subscribers, or sales page purchases.

You can also manually calculate your conversion rate by seeing how many people visited a page versus how many people converted.

**How to calculate conversion rate in Excel**

If you’re making continuous adjustments to your landing page or website content and want to track your conversion rate and content changes, keep a running log in Excel.

For a basic calculation, you just need three columns. Column 1 is conversions, column 2 is sessions, and column 3 will be your calculated conversion rate. You can then add notes about the content changes you’ve made and the results of past split tests.

Here’s an example of the spreadsheet described above so you can try it for yourself. To use the sheet click File > Make a copy, give the sheet a name, then click “Make a copy.”

What’s most important is to use Excel to capture and track all of your tests’ learnings. Utilize a new sheet for each variable, and keep track of everything you learn. This will help you make decisions in the future, not only for that specific page but also for other pages moving forward. The more data you keep track of, the better (and easier) it will be to optimize your conversion rate.

**Frequently asked questions about calculating conversion rate**

**How often should I calculate my conversion rate?**

You should calculate your conversion rate regularly, such as monthly or quarterly, to monitor performance and identify trends. Regular tracking helps you respond quickly to changes and implement optimizations in a timely manner.

**What are common mistakes when calculating conversion rate?**

One common mistake is not clearly defining your conversion goal. For instance, if you're tracking purchases but don't account for different stages in the buying process (like add-to-cart vs. actual purchase), you might misinterpret your data and track actions that aren’t actually conversions. Another error is using the wrong denominator, such as counting all visitors instead of unique visitors. Additionally, not segmenting your data (e.g., new vs. returning visitors) can lead to misleading conclusions.

**Should I include all types of conversions when calculating my conversion rate?**

When calculating your conversion rate, it’s important to be specific about the type of conversion you’re measuring. For example, if you’re interested in sales, only include completed purchases. Mixing different types of conversions, like newsletter sign-ups and purchases, can give you an inaccurate rate.

**How does using different time periods affect conversion rate calculation?**

The time period you choose can impact your conversion rate calculation due to seasonal variations, marketing campaigns, or changes in website traffic. Ensure consistency by comparing similar time periods (e.g., month over month or year over year) to get accurate and meaningful insights.

##### What’s next?

Knowing how to calculate your conversion rate is great—but how do you know if your conversion rate is good or not? In Chapter 3 we’ll go over what is considered a “good” conversion rate and provide you with some benchmarks to measure yourself against.