Conversion Rate: Why it Matters to Business

Discover why the conversion rate metric is crucial for business success. Learn strategies and tips to boost your product sales and improve customer engagement.

Table of Contents

                Conversion rates explained

                Conversion rates refer to the percentage of users who take the desired action in response to marketing efforts or a specific call to action.

                The action considered a conversion can vary depending on the business goal, from making a purchase or signing up to email marketing.

                Conversion rates provide critical insights into the effectiveness of a campaign, website, or sales funnel, making them especially useful for marketers.

                A higher conversion rate indicates users largely respond positively, while a lower rate suggests room for improvement.

                Analyzing conversion rates helps businesses make the most of their marketing strategies, user experiences, and sales processes to increase their overall success and return on investment (ROI).

                What counts as a conversion event?

                A conversion event is any action or behavior a business or organization considers valuable. What counts as a conversion event can vary widely depending on business goals, your market, and product type.

                Your conversion events will serve you best if they align with the specific objectives and key performance indicators (KPIs) of your business or marketing campaign. You can tailor conversion events to track the most relevant user actions that lead to overall success.

                Some common examples of conversion events across various industries include:

                • Making an active purchase through an ecommerce site
                • Creating a registered user account
                • Downloading materials like an informative ebook or trial version of a company’s software
                • Downloading and using a company app
                • Browsing site landing pages and articles for a specific period
                • Regularly visiting the site
                • Liking or sharing social media posts
                • Clicking through ads

                What is a good conversion rate?

                What makes a conversion rate “good” can greatly vary depending on the industry, conversion event type, and quality of site traffic and targeted leads — there’s no one-size-fits-all.

                Things like the product, target audience, market competitiveness, and site quality all influence what makes a conversion rate good.

                Generally, a good conversion rate meets or exceeds your performance goals and expectations.

                Businesses often use benchmark data as a reference point. An average ecommerce conversion rate might be around 2-3%, but high-performing ecommerce websites could achieve rates of 5% or higher.

                Tracking and improving your conversion rates over time is essential, aiming for continual growth and optimization. What’s considered good for your business will align with your objectives and industry standards while striving for continuous improvement.

                How to calculate a conversion rate

                To calculate a conversion rate accurately, you follow a simple formula that compares the number of successful conversions to the total number of opportunities or visitors.

                Conversion rate = (Number of conversions / Total number of opportunities) x 100

                Let’s break that down:

                1. Determine the conversion event: Identify the specific action you want to measure as a conversion. For example, it could be making a purchase, signing up for a newsletter, or clicking on a specific link.
                2. Gather the data: Collect the relevant data, which includes the number of conversions and the total number of opportunities or visitors during a specific period.
                3. Apply the formula: Plug the numbers into the formula. For example, if you had 50 conversions out of 1,000 visitors to your website, the calculation would look like this:

                Conversion rate = (50 / 1,000) x 100 = 5%

                What is conversion rate optimization?

                Conversion rate optimization (CRO) involves making valuable improvements to increase the number of converting users.

                CRO typically involves analyzing user behavior, testing elements like headings, images, and CTA buttons, and making data-driven adjustments to improve the likelihood of conversions.

                The goal is to enhance user experience, reduce friction, and increase the overall effectiveness of a webpage or campaign to boost conversion rates.

                CRO often includes A/B testing, user research, data analysis, and iterative improvements to fine-tune the user journey and achieve better results, ultimately leading to increased revenue, leads, or other KPIs.

                Conversion rate tools

                It’s essential to gather precise results when analyzing conversion rates so you can make informed changes where needed.

                To get accurate results, leading companies employ robust conversion rate tools.

                Let’s explore some of the best conversion rate tools on the market and how they can empower you to boost your numbers.


                Amplitude provides detailed data that gives you valuable insights into every area of your business.

                Our analytics and customer data platform gathers all the essential information you’re looking for about the customers you acquire. From how users engage with your business to what exactly hooks them in, keep a close eye on what they like and need so you can deliver.

                You can dig even deeper when you use our analytics for your ecommerce activities. You’ll gain a more accurate overview of how to improve conversions and ultimately increase your product’s profitability.


                SimilarWeb gives users a comprehensive breakdown of conversion data for their website.

                Gather competitor insights to benchmark your site’s performance, analyzing total site visits and comparing to total converted visits. The data is displayed in graph format so you can assess when performance changes throughout the year.


                Offering a free version for the basics or a paid subscription that offers more advanced features, Sumo can help a range of businesses increase site conversions.

                A pull of Sumo is its free tools, which have benefited many customers. It’s also straightforward to use, making CRO simple.

                Make the most of conversions with Amplitude

                Choosing a robust and well-rounded tool offering a range of features can take your business to new heights.

                Amplitude is a leader in this industry because we know metrics inside out. We don’t just analyze your business data for you—we help identify how you can transform it into practical strategies that lead to new and continued success.

                Make the most of our comprehensive data analysis and user behavior tracking tools to make the most of your conversion rates. No matter what the results look like to your business, we’ll break down the analysis so you can take the steps to achieve them.

                Take the first step to positive results and get started with Amplitude today.