Calculating Your Conversion Rate
I have some great news calculating your conversion rate is really, really simple. Here's a formula divide conversions by number of visitors and multiplied by 100. So if you have 10 people show up to your site and to sales or conversions you have a 20% conversion rate. In other words 20% of the people who come to your website will turn into a sale. Well that's easy enough to calculate right. That is if you know the inputs you might be asking yourself where you can find information on site, visitors and conversions. There are two main ways. Option one if you use a content management system like Shopify, squarespace or Wix you can find this information in there. Option two you can use a web analytics platforms such as google analytics, fiber has some great beginner and intermediate courses on google analytics that I highly recommend. But I'm going to show you a quick way to find the information. You need to calculate conversion rate before I do that. Two things which I will highlight duri...
ng the demo first, the time period whether you choose a year, a month, a week or a day, make sure it's consistent for all the values in your formula for this course and for my own business I'll be using data for a full year second you should define your denominator. I mentioned earlier that the conversion rate formula is conversions over visitors but visitors is often defined in a variety of ways. Some marketers like to use sessions while others like to use visitors or even unique visitors. I'll have to tell you that neither is wrong. I'll explain a little bit more in depth when we go into google analytics in a second. In this session, I'm going to walk you through how to use google analytics to find the inputs that you need to calculate conversion rate for your website. So if you don't have google analytics installed on your site, that is not a problem. Google analytics actually has a demo account that they allow anybody to use. So you can start playing with google analytics and decide if it's the right tool for you. So I'm gonna show you how to access that. You just type into google google analytics demo account from any of these links. You will see uh this page and from here you can click on access demo account and it'll take you to the google analytics demo account after you submit your google credentials. So basically your Gmail and your gmail and your password just for reference, this is what the google demo account supports. In other words um the demo account that google has made available to everyone is the demo account for their google merchandise store. So the store that they have for employees or fans of google to buy t shirts, mugs, sweatshirts or all sorts of google swag. So I'm going to go into that demo account right now and before I show you the easiest way to calculate or just find the inputs that you need to calculate conversion rate, I'm just gonna walk you through very quickly some of the highlights or high level overview of how google analytics is set up. So on the left hand side here you can see what is basically the global navigation for google analytics. The first uh segment that you should notice is audience. And so in this segment you can find out more about who your audience is, where they live, what their interests are, what their behavior is and what types of devices they are using to access your website. In the second time you have acquisition which is mostly around where your audience is coming from and specifically what marketing channels or what what areas are coming from, whether it be paid search or organic search or your email, which ones are driving the most acquisitions or the most conversions. We'll talk a little bit about that one later in the course behavior is all about in website behavior. It just kind of speaks for itself, it's how your user, what your users are doing once they are on your site and then finally conversions is the whole area on conversions and goals which will get a little bit into later in the course as well. This is the first of several google analytics walk throughs that I will do throughout this course. So if you have questions and you feel like there's an area that I haven't covered. Do not worry, we will get there most likely. Um and if if not there are other fiber courses that go even more in depth into google analytics but for now the focus of this particular walkthrough is figuring out. How do we get the inputs that we need to calculate conversion rate for your site? So we're gonna go to audience and we're going to go to overview and here you can see that you have users. Right? So you you have the total number of users, which is another word for visitors basically to your site but you're missing a critical piece of information which is conversions. So where would you find conversions conversion is in in many ways another word for acquisition or a new user that is acquired to buy your site. So you're going to just go into the acquisition tab into the overview section and here you'll see that you have not only users which you saw also in the audience have but you have conversions and so if you scroll down, What you'll see is for the given time period we have here 54,600 users or so and 83 transactions or conversions. So um I mentioned the time period that's really important to consider as you're trying to figure out what your site's conversion rate is. So in this particular case this defaulting to october 1st 2019 to october 31st 2019 you'll notice that the conversion rate um for that time period Point 12% here um if you think of this website, this is an e commerce store google is selling merchandise. Uh It's very likely a seasonal business, right? So more people are probably buying during the holidays or around holidays. So let's just take a look at what the conversion looks like for december. So it's 0.12 for october Up here, you can insert whatever date range you have or or you want to look at the data for. So we're going to select December 1 to 31 December 2019 and just apply And what you can see suddenly is that the conversion rate. So um went from .14 which was in October 2.22%. Which is this pretty significant increase. And it's kind of to be expected as the holidays are typically a time where people are buying more things which is more actively shopping. And so as you think about how to calculate the sort of average conversion rate for your website, it's important to consider the date range that you're using to look at the data, if you select december, you're probably going to end up with a much higher average conversion rate if you're running an e commerce business for example versus versus if you selected october um that might be a bit off season if it's an e commerce business and you might end up with a lower conversion rate. So my recommendation. And what I would do for my own website is to actually just take a full year's worth of data so that you have a fairly um good just average conversion rate that takes into account all the peaks and valleys that your conversion rate might go through throughout the year. So I'm just going to select january 1st 2019 to january december 31st 2019 and apply and so when I go into my worksheet and I'm going to input the number of visitors you would be looking at this number up here um down here you can see this broken out by the different marketing channels, which we'll discuss a little bit later in the course. But here this would be the total number of users. And then right here in transactions will be the total number of transactions. So if you are going to calculate this on your worksheet, you would say you had 151 conversions um that over 590,161 users and multiply that by 100 and that would give you your conversion rate one quick thing. Before we resume our course is to note that as I mentioned before, marketers differ in the way that they calculate conversion rates. Some, some marketers will use uh the users as a denominator, others will use sessions as a denominator. So just so you're you're aware if you're going to use the default conversion rate that comes from google analytics, google analytics actually calculate conversion rates based on sessions not users. So you should be aware of that. Um In case you see any discrepancies as you're as you're calculating your own conversion rates and they might not match up what you see in google analytics. Um But yeah, this is a very simple way that you can use this overview tab in the acquisition section of google analytics to find the inputs that you need to calculate conversion rate for your own websites. Take time now to find this information for your site and add it to your worksheet. I'll do this now for my own site. As an example, let's say I had 300 sales last year and about 50,000 visitors came to my site in that same time period. So 300 divided by 50, gives me a conversion rate of .6% At any given time .6% of my website visitors will turn into customers .6%. Is that a good conversion rate or a bad conversion rate? That is a great question which we will address in the next section