When a company wants more orders, the first reaction is usually to add budget to advertising. Bringing in twice as many people is easy to picture and easy to measure.
Raising the share of people who place an order is not easy to picture. Yet it is almost always the cheaper way to reach the same number.
This article explains why the conversion rate increases revenue faster than traffic, which figures are realistic in the Czech Republic and where you can start without a big project.
Why it pays off before advertising does
The conversion rate is the share of visits that ended in an action. An order, an enquiry or a registration, depending on what success means for you.
The key point is that it multiplies with all of your traffic. An improvement of a few tenths of a percent shows up on every visit you are already paying for.
Let’s look at the numbers. An online shop with 10,000 visits and a conversion rate of 1% gets 100 orders.
Doubling traffic means doubling the advertising budget and getting 200 orders. Raising the conversion rate to 1.5% means 150 orders without spending a single extra crown.
In practice, this sets the order of priorities. As long as the conversion rate is noticeably below the industry average, adding budget to advertising is the most expensive option available.
The conversion rate formula and how to calculate it
The conversion rate formula is simple. You divide the number of conversions by the number of visits and multiply the result by 100.
Conversion rate = conversions ÷ visits × 100
If 3,000 visits in a month brought in 45 orders, your conversion rate is 45 ÷ 3,000 × 100, which is 1.5%.
Step by step
- Decide what counts as a conversion. An order, a submitted form or a sign-up, but only one at a time.
- Choose the period, for example the last full month.
- Take the number of conversions and the number of visits for exactly that period.
- Divide, multiply by 100 and write the result down so you can compare it next month.
Visits or visitors
You can divide by visits or by unique visitors. Visits give a lower figure, because one person often comes several times before buying. Visitors give a higher one. Neither is wrong, but you must use the same one every time, otherwise the figures are not comparable.
Which figures are realistic
The most common question is whether their figure is good. The answer depends on the industry, the type of conversion and, above all, where people come from.
The following ranges are based on what we see with Czech clients. Treat them as a guide, not a target.
An online shop typically sits at around 1% to 2%, and higher for well-established brands. The share of branded traffic is decisive.
An enquiry form for services usually converts at a few percent. For specialised services with a high order value, it can be even lower and still pay off.
A file download or newsletter sign-up is an order of magnitude higher, because there is no commitment.
More important than the range is where people come from. A visit from a search for your own brand name converts many times better than a visit from a banner ad. An average across all sources therefore tells you little.
Where conversions are most often lost
Losses are rarely spread evenly. There are usually one or two places where most people leave.
You can find them without a paid tool.
The mobile version. The most common and the most underestimated. Compare the conversion rate on mobile and on desktop. If the difference is large, you have your first task.
The final checkout step. Mandatory registration, a missing payment method, shipping costs that only appear at the end. This is where people who had already decided leave.
Lack of trust. No testimonials, no contact details, no terms and conditions. For an unknown brand, this matters more than price.
An unclear next step. A page where the visitor does not know what to do. This ties in with what we describe for landing pages.
How to find where it drops
Analytics will show you most of what you need, and four views are enough.
The process takes an hour and you do not need anyone from outside.
First, compare the conversion rate by device. A gap of more than half between mobile and desktop is a clear signal.
Then look at the conversion rate by traffic source. A channel that brings in many people but few orders is either targeting badly or promising something different from what the website offers.
The third view is landing pages. Which ones bring in visits but do not convert? That is where it pays to start.
The fourth is the path to an order. For an online shop, check how many people move from the basket to the next step and how many complete the order. We describe the setup in our article on Google Analytics 4.
Using a conversion rate calculator or a spreadsheet
A conversion rate calculator only does the division for you. It is handy for a quick check, but a simple spreadsheet is more useful, because it keeps the history.
Put the month in the first column, visits in the second and conversions in the third. In the fourth column, divide conversions by visits and format the cell as a percentage. Add a row for each month and, if you can, a separate sheet for mobile and desktop.
It is worth adding one more column with revenue per visit. Multiply the conversion rate by the average order value. With a 1.5% conversion rate and an average order of $50, each visit is worth $0.75. This tells you how much you can afford to pay for a visit from advertising and still make money.
What to try first
The following changes offer the best ratio of effort to results on Czech websites. None of them requires a redesign.
They are ordered by how quickly they can be done.
Show shipping and payment earlier. Revealing the shipping cost only at the final step is the most common reason for basket abandonment.
Checkout without registration. Mandatory registration puts off some of the people who had already decided to buy.
Shorter forms. Every extra field reduces the number of submissions. Ask only for what you need for the first contact.
Proof in a visible place. Testimonials, ratings, specific figures. For an unknown brand, this is often the biggest obstacle.
Faster loading. A direct impact on conversions, especially on mobile. We cover it in our article on website speed.
When to test and when to simply fix
Testing has limited value for small websites. For a test to prove anything, you need enough conversions, otherwise you are measuring chance.
The practical threshold is roughly a few hundred conversions a month. Below that, only test things with a large expected difference.
For smaller websites, it is more effective to simply fix obvious mistakes and check whether the figure has risen after a month. It is not a clean experiment, but it is better than waiting for statistical significance that will never come.
For larger websites, testing makes sense and is the most reliable way to find out what works. The condition is that the test runs long enough and nobody touches it in the meantime.
What to avoid
We see the following things often, and all of them lead to decisions based on noise.
They are easy to spot.
Tracking the average across all sources. A change in the ratio of branded to non-branded traffic shifts the figure without anything actually improving.
Copying other people’s solutions. What works for a large online shop with a well-known brand may not work for you.
Evaluating after a week. Weekly data for a smaller website is noise. Think in months.
Optimising without looking at quality. Twice as many enquiries that sales cannot use is not an improvement.
Calculation mistakes that distort the conversion rate
Even a correct formula gives a misleading result if the inputs are wrong. These are the most common errors.
- Different periods. Orders from the shop system for one month divided by visits from analytics for another.
- Mixing conversion types. Adding orders and newsletter sign-ups into one number makes the figure look better than it is.
- Internal and bot traffic. Visits from your own team or from automated tools inflate the number of visits and lower the rate.
- Counting duplicates. A thank-you page reloaded twice can be recorded as two conversions.
Before you start acting on the figure, compare the number of conversions in analytics with the number of real orders or enquiries. If they differ significantly, fix the measurement first.
Common questions about conversions
The five questions we are asked most often.
The answers apply in general; the figures differ for each specific website.
What is a good conversion rate?
One that is better than yours last year with the same mix of traffic sources. Someone else’s benchmark knows neither your offer nor your brand.
If you want an external comparison, compare within a single channel, not across the whole website.
How long does it take for an improvement to show?
Changes to the basket and forms show up within weeks. Changes related to trust and brand take months.
After a change, allow at least a month before you start evaluating.
Do I need a tool for this?
Analytics is enough to start with. Screen recordings and heatmaps help, but only once you know which page to investigate.
First find out where, and only then work out why.
Not directly, but indirectly very much so. Organic traffic only seems free, because someone also paid for it with their work.
A website that does not convert devalues the entire investment in SEO and in advertising.
Does it make sense to increase conversions with low traffic?
It does, but the result will be small in absolute terms and hard to measure. For a website with a few hundred visits a month, it pays to bring in people first.
Fix obvious mistakes, such as mandatory registration or missing contact details, in any case.
Where to start on your website
Open Analytics and compare the conversion rate on mobile and on desktop over the last three months. If mobile is significantly worse, you have your brief ready.
The second task is to go through the ordering process on your own phone, as a customer would. Most companies have never done this.
Want to find out exactly where things break down for you? We handle both measurement and proposed changes as part of our services. Get in touch via our contact page.
Frequently asked questions about calculating conversion rate
How do you calculate conversion rate?
Divide the number of conversions by the number of visits in the same period and multiply by 100. For example, 30 orders from 2,000 visits give a conversion rate of 1.5%. Always use the same period and the same definition of a conversion.
What is the conversion rate formula?
The formula is conversions ÷ visits × 100. Some companies divide by unique visitors instead of visits, which gives a higher figure. Either works, as long as you stay consistent over time.
Is a conversion rate calculator worth using?
It is fine for a one-off check, but it only performs a simple division. A spreadsheet with monthly figures is more useful, because it shows the trend and lets you compare devices and traffic sources.
Should I calculate the conversion rate for each step separately?
Yes, if you want to know where people leave. Divide the number of people who reached the next step by the number who reached the previous one. The step with the lowest rate is usually where to start.
