Conversion rate is the measurement of the number of customers that perform a desired function as a result of a marketing campaign. It is a measurement of the success or failure of a marketing campaign. The success could be based on the amount of sales generated, amount of surveys undertaken or any other goal that is sought by the advertiser.

The conversion rate is calculated by taking the number of successes and dividing that with the number of leads tied to the successes at a given time. Than is:

_         Conversion Rate = (Success / Leads) * 100

The conversion rate is usually expressed as a percentage hence the part where the function is multiplied by 100.

For example, supposing the advertiser ran pay per click advertising campaign to which he got 100 hits. If only one out of the 100 people who clicked on the advertisement ends up buying the product then:

_          Conversion rate = (1 / 100) * 100  =   1%

Web pages have tools and programs that they use to analyze conversion rates when they are running a pay per click marketing campaign. The tools and programs that are used in web analytics have a myriad of other functions other than to just count the number of clicks. They monitor customer behavior and their preferences and provide this information to the users so that they can develop better marketing strategies to target these customers. The conversion rate is studied against key performance indicators in order to determine the most effective techniques that can be employed to achieve the desired results.

A high conversion rate is difficult to achieve. However, by matching the right visitor to the right website and at the right time, the probability of getting a high conversion rate is increased. To do this, companies employ the use of search engine optimization tools and paid inclusion. With the sales lead provided from the advertising, the next step is for the company to be well equipped in landing the sale. The company can do this by appealing the customer to the company’s unique selling point and being well equipped with the answers to the concerns that the customer may have. Other methods include being clear and concise about information on returns, protection of information and other business concerns.

Conversion rate is a key performance indicator in a paid marketing campaign, after all, the goal of a business is to make a profit.

Related topics: Lead generation