What is conversion rate?

Definition, optimization, formula, calculation, and examples

Conversion rate is a marketing metric that measures the number of conversions divided by the total size of your audience. Conversions can be defined in many different ways, including clicks, purchases, or registrations. Conversion rate optimization, or optimizing for conversions, is the process of improving and raising your conversion rate.

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What is a conversion?

A conversion is an action that your customers take, and that number can be defined by you and your business needs. These actions could be clicks on your website, purchases, or new customer registrations for email newsletters, for example. You could also define multiple conversion actions and conversion rates to better measure performance and choose your ideal goals.

What is conversion rate (CVR)?

Conversion rate is a marketing metric (shown as a percentage) used to calculate digital engagement with your brand in order to optimize your marketing strategy.

Conversion rate measures the transition of passive browsing to actions taken by customers, on websites, apps, or other digital formats. Conversion rate can be ambiguous, but generally, a good visitor conversion rate is a high one. The more customers are engaging with your ads or content, the higher your visitor conversion rate will be.

Why is conversion rate important?

Conversion rate allows you to measure the performance of your digital advertising and assess if it’s resonating with customers or not. Conversion rate can be helpful for brand management, helping you assess and measure the user experience. Rather than making assumptions about your customers’ needs, for example, you can measure the conversion rate on your product pages to get insights on their shopping needs.

Conversion rate formula

Conversion rate = (conversions ÷ total audience) x 100

There is not one sole standard conversion rate, though in the marketing industry it’s typically defined as the number of conversions divided by the total number of visitors on your site, with the conversion rate as a percentage.

The conversion rate for online sales could be measured by the number of impressions on your site divided by the number of purchases, for example, or a social media conversion rate could be defined by the number of Instagram comments divided by the number of followers. It can also be limited to a specific time frame or time of day, to be even more precise.

What is conversion rate optimization (CRO)?

Conversion rate optimization is the process of achieving a higher conversion rate. The higher the conversion rate, the more your customers are engaging with content on your site or purchasing your products, for example. You could also potentially look at different time frames or date ranges, to see when your conversion rate is the highest and where you could prioritize your campaigns.

Why is conversion rate optimization important?

Conversion rate optimization is important because it can affect the optimization of other branches of your marketing strategy, such as your budget and customer outreach programs. Improving your conversion rate is a great way to increase the efficiency of your business’s campaigns and strategies, allowing you to better reach customers where they are and with products that are likely to interest them.

Conversion rate optimization best practices

Two of the primary conversion rate optimization best practices are to either improve your initial audience or traffic, or to strategize based on your existing audience. In the former, your focus is on growing the reach of your campaigns or products. By expanding your user base, you’re also creating more opportunities for conversions. In the latter, your focus is on your existing audience and how to make changes to their conversion rate and create brand loyalty. Consider what’s working for your business and direct your attention there, or pinpoint areas of concern to address.

Conversion rate optimization strategies

A company can optimize conversion rate by ensuring that outputs are engaging and relevant to customers. One straightforward way to improve conversion rate is to use tools to pay attention to it, and choosing your goals and conversion definitions. Once you’re aware of how your brand is performing or how it’s perceived by your audience, you’ll gain insights into ways to optimize. To further improve conversion rate optimization, you can also assess SEO performance, add hyperlinks, or use A/B testing on your site, for example.

Conversion rate optimization examples

Case Study

High-end professional hair-tool company ghd wanted to find out how nonbranded, upper-funnel campaigns affected their users’ conversion. To do so, they teamed up with EY Fabernovel to determine what their most effective conversion paths looked like. Throughout the process, they discovered that their conversion rate was the greatest for audiences who were exposed to both Amazon DSP and Sponsored Products campaigns.


Case Study

A menswear seller used iChannelSolution, an Amazon Ads advanced partner, to help improve their conversion rate, among other metrics. To do so, they used optimization tools to create rules and conditions for their campaigns, bringing the most relevant ads to their users.


Case Study

A health care brand seeking to improve their conversion rate and other metrics used Oceanwing to take action. They used remarketing tools to assess their customer conversion path and make adjustments.


Conversion rate optimization tools

If you’re ready to get started with measuring your conversion rate, Amazon Ads can help. First, Amazon Attribution is a measurement solution that will help you assess and define your metrics. Then, you can adjust your campaigns and improve your optimization techniques.

Second, you can use our campaign reporting to receive metrics on how your ads are resonating with users. You can also find additional success, reach, frequency, and new-to-brand metrics to further improve your reporting.

What are modeled conversions?

Modeled conversions are the measurement of the entirety of your campaign, including non-addressable audiences. Amazon Ads can help you to predict modeled conversions, to better design your campaign strategies even when you don’t have the precise conversion rate available.