Conversion rate.
aka CVR, CR, purchase rate
Out of everyone who walked in, how many bought.
What it actually means
Conversion rate is the percentage of visits to an online store that end in an order: orders divided by sessions. It measures how well the store turns attention into sales, and it is usually a small number. Depending on the benchmark, typical stores convert between about 1.4% and 3% of visits.
If 10,000 visits produce 200 orders, conversion rate is 2%. Raise it to 2.5% and you have 50 more orders from the same traffic and the same advertising bill.
The average hides more than it shows. Returning customers convert several times better than strangers, desktop better than mobile, email traffic better than social. A store's blended rate can fall simply because it bought a lot of cold traffic, with nothing wrong on the site.
Where you'll hear it
Site conversion dropped to 1.6%, but that is the new social traffic. Returning visitors are still converting at 4.8%.
Translation: the store did not get worse. The mix of visitors changed. Judge each group separately before redesigning anything.
Also in every agency report, in A/B test results, in marketplace seller dashboards (where it is called unit session percentage or similar), and in arguments between the marketing team and the web team.
The pop-culture version
A shop on a busy street has hundreds of people stop at the window every day. A few dozen come in. A handful walk to the till with something in their hands.
The shopkeeper can pay for a bigger sign to bring more people to the window. Or tidy the entrance, fix the lighting, price things clearly and shorten the queue, so that more of the people already there buy.
The second approach is conversion rate optimisation. It is slower than buying traffic and it keeps paying after the work is done.
Traffic is rented. A better conversion rate is owned. That is why mature stores spend as much effort on the till as on the sign.
Say it like you mean it
“Mobile conversion is 1.2% against 3.1% on desktop, so checkout on phones is the first thing to fix.”
Segments the number and points to an action.“Our conversion rate is bad.”
Compared with which stores, on which device, from which traffic? An unsegmented rate cannot be good or bad.When someone quotes a conversion rate, ask what it is a percentage of. Sessions and users give different answers, and so do different tools.
Why conversion benchmarks disagree, and the steps inside the number worth watching.
Decoded next
Decoded by the Kurums editorial team. Kurums Decoded translates the language of business for people who are new to it. Definitions are kept short on purpose; the serious version above goes deep. Nothing here is financial, legal or career advice.
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