The conversion rate (CVR) is a key figure from online marketing. It indicates the ratio of clicks and leads or conversions. A “conversion” does not necessarily also mean an order completion. Depending on the purpose and type of website, a successful conversion can also mean filling out a contact form or subscribing to a newsletter. A successful download after visiting a certain website or after going through a conversion funnel can also be a positive conversion.
How is the conversion rate calculated?
CVR is a very important KPI, especially with regard to purchases in e-commerce, because it enables online merchants to measure the success of their advertising measures and can also analyze and optimize customer journeys within a web shop. There are different approaches to calculate the conversion rate:
- Number of transactions / number of visitors * 100
- Number of transactions * 100 percent / number of visitors
- Number of transactions * 100 percent / number of unique visitors
What is the difference between the different types of calculation? The first two methods are based on the same data basis: Visitors and transactions, whereby a transaction is always equivalent to a conversion. The only difference between the two calculations is the conversion of the formula with a factor of 100 – the result is the same in both cases.
The more precise method for calculating the conversion rate is the third variant, because the unique visitors (visits) are used as a basis. This CVR is usually higher than with the other formula, because unique visits are always lower. Why is that so? Among 100 visitors of a web shop there are always those users who have already visited the shop before and must therefore be viewed in a differentiated manner. A calculation of the conversion rate with the “Unique Visits” is therefore always higher, since only here each user is considered individually and not all users together. The relation of the ordered products to the counted users is therefore “better”.
Difference between Micro-Conversion and Macro-Conversion
Conversions are often preceded by the additions “Micro” and “Macro”. The difference between the two conversions lies in the type of underlying target. A macro conversion in e-commerce is in most cases a sale, i.e. a concrete measurable sale in a webshop or on Amazon. A micro-conversion can be e.g. a click on an advertisement (e.g. Google Adwords or Amazon Marketing Services). Micro-conversions are therefore achieved much faster and can be viewed in a much broader sense. In advertising (SEA), this type of conversion is often referred to as the click-through rate. In e-commerce, the conversion rate is usually based on macro conversion.
Conversion rate on Amazon
In the Amazon marketplace, CVR is also often used as an important indicator to show the success of PPC campaigns and customer journeys by users in general. In direct comparison with other (own) webshops, the conversion rate at Amazon is often above average. Assuming a conversion rate of 2 to 3 percent for a “normal” web shop, the average CVR at Amazon is around 10 percent. Depending on the price, the quality of the images and the information displayed, the conversion rate on Amazon can even increase up to 50 percent and higher. The basis for this is almost always good product optimization, an attractive purchase price and as many positive evaluations as possible. Also important for a high conversion rate is the Prime logo, which is usually displayed when the merchant participates in the FBA program and the products are shipped from Amazon’s own warehouse.
In order to be able to evaluate the conversion rate at Amazon, there are essentially two possibilities:
Evaluation of PPC campaigns
- 100 / Number of clicks * Number of sales
Evaluation of reports
- Number of units ordered / number of sessions * 100
In the Amazon Marketing Services section, the conversion rate is always displayed directly at campaign level.
In order to optimize a conversion rate (CRO = Conversion Rate Optimization), an analysis of the existing data is always required. At Amazon, price, ratings and the first product image play a particularly important role in achieving the highest possible CVR. As an Amazon agency, we at intomarkets have specialized in exactly this area.