How to Calculate Conversion Rate: Step-by-Step Guide For Beginners

If you’ve ever wondered whether your marketing efforts are actually paying off, or questioned if your content, ads, emails, or website are doing what they’re supposed to do, then you’ve likely come across the term conversion rate (CVR). It’s one of the most talked-about metrics in marketing, and for good reason. 

Conversion rate calculation is essential for businesses of all sizes, whether you’re just starting out or already established. As a beginner, learning how to measure and improve your conversion rates is one of the smartest ways to hit the ground running in your business. It helps you understand what’s working, what isn’t, and where to focus your time, energy, and budget for better results.

In this guide, we’ll walk you through everything you need to know about conversion rate optimization, from what conversion rate is and why it matters, to how to calculate it step by step. You’ll also learn practical tips on how to improve your conversion rates and, as a result, your overall marketing performance.

What Is a Conversion Rate in Marketing and Sales?

Before explaining the conversion rate, it helps to understand what a conversion is.

A conversion in sales and marketing happens when a user takes an action you’ve defined as valuable to your marketing goals. In simple terms, it’s when someone in your target audience, whether a website visitor, an email subscriber, or a viewer, does what you want them to do after interacting with your content, website, or ad.

This action moves them further down your marketing funnel.

Common examples of conversions include:

• Downloading a lead magnet
• Signing up for an email list
• Clicking a link in an email
• Purchasing a product or service
• Booking a call or consultation
• Purchasing a paid subscription plan 

So, what is a conversion rate?

In marketing and sales, a conversion rate is the percentage of users who complete a desired action out of the total number of people who interacted with your offer. In other words, it shows how effective your marketing efforts and calls-to-action (CTAs) are. 

Depending on your marketing goals, it’s the percentage of users who act on your call-to-action divided by the total number of users who visit your site, click on your ad, read your email, share your content on their social media, and so on.

How to Calculate Conversion Rate (Step-by-Step)

Now we’ve come to the nitty-gritty, the reason we’re here. I’m sure you’re now very interested in knowing how to calculate your business conversion rates, right? Here are proven steps to knowing your conversion rate accurately:

Step 1: Identify Your Total Visitors or Audience

The first step in calculating your conversion rate is to know your total audience. This could be the number of website visitors, people who clicked your ad, or subscribers on your email list during a specific time period. Make sure you focus on the specific channel you’re measuring to get accurate results.

Step 2: Determine the Number of Conversions

This is the total number of desired actions users take that align with your business goals. It could be signing up for a subscription service, joining your email list, or clicking on an ad, whatever your business considers a “conversion.”

You can track these numbers using analytics tools and platforms such as:

• Web and analytics tools: Google Analytics, Hotjar, crazy egg, Matomo
• Advertising platforms: LinkedInads, Facebook ads manager
• E-commerce and sales platforms: Shopify analytics, WooCommerce, ClickFunnels
• Email marketing platforms: HubSpot, MailChimp, ActiveCampaign

Step 3: Apply the Conversion Rate Formula

Now that you have your total visitors and total conversions, you can calculate your conversion rate using the conversion rate formula:

Conversion Rate = (Total conversions / Total visitors) * 100

For Example:

• Let’s say 1,000 people visited your website last month (total visitors).
• Out of those, 100 people signed up for your newsletter (total conversions).

Using the formula, this means 10% of your visitors completed the desired action. That means 1 out of every 10 visitors is converting, a clear indicator of how well your strategy is working…or not.

How Do You Improve Your Conversion Rates?

Now that you understand what conversion rates are, their importance to your business, and how to calculate them accurately, you may be wondering how to improve them. The following are proven ways you can improve your conversion numbers.

Step 1: Define your conversion goal

What’s your marketing goal? Which action do you want users to take? There are a multitude of metrics to choose from for your business goals. Could be email sign-ups, visits to your website, actual sales, or paid subscriptions, etc.

Conversion goals, whether minor or major, help you track your marketing efforts and their direct effect on your business goals. About half of new small businesses survive for 5 years, so you want to make sure the goals you pick are SMART– specific, measurable, achievable, relevant, and timely. 

Step 2: Improve clarity on your marketing channels

Make it easy for your audience to understand what you want them to do on every channel: your website, emails, ads, or social media. Clear messaging, obvious calls-to-action (CTAs), and simple navigation reduce confusion and guide users toward taking the desired action.

Step 3: Simplify forms and checkout processes

Make it as seamless as possible for users to take action. Shorten forms, remove unnecessary fields, and streamline your checkout process so visitors can complete their purchase or sign up without hiccups.

Step 4: Build trust with testimonials and reviews

Show potential customers that others have had positive experiences with your product or service. Adding genuine testimonials, reviews, UGC-content or case studies reassures visitors and increases the likelihood they’ll take action.

Frequently Asked Questions 

What Is a Good Conversion Rate? 

A “good” conversion rate depends on your industry, traffic source, and marketing goal. For example, e-commerce purchases usually have lower rates than email sign-ups. For beginners, the focus should be on gradual improvement, not a perfect number. Small increases over time can have a big impact on results.

What Is the Difference Between Conversion Rate and Click-Through Rate?

Click-through rate (CTR) measures how many people clicked on a link, ad, or email out of the total who saw it. Conversion rate, on the other hand, measures how many of those people completed a desired action, like signing up or buying a product. CTR shows interest, while conversion rate shows action.

How Often Should I Calculate Conversion Rate?

It depends on your traffic and campaign size. For beginners, calculating the conversion rate at least once a month to track performance and spot trends is ideal. For active campaigns with daily traffic, weekly tracking can help identify quick wins and areas for optimization.

Does Conversion Rate Apply to Offline Businesses?

Definitely! Conversion rate isn’t just for online businesses. Offline, it can measure actions like store visits, sign-ups, phone inquiries, or in-person purchases compared to the number of people exposed to your marketing. The principle is the same: it shows how effective your marketing is at driving desired actions.

Final Thoughts

The businesses that grow fastest aren’t necessarily the oldest businesses but simply the most aware. Employing the right marketing strategies, like monitoring and optimizing your conversion rate, is a surefire way to shoot your sales numbers through the roof even as a beginner.

If you want experts to help improve your business and conversion numbers, Techdella works with small business owners to apply proven conversion optimization strategies. Book a discovery call to learn how to set the right conversion goals, track results with the best tools, and optimize your audience while reducing the cost of acquiring new leads.