Sales Conversion Rate: What Is It and What Should It Be?

For all the effort you put into sending people to your website or online store, if you don’t know your sales conversion rate, all your efforts may be in vain. Understanding what percentage of visitors to your site buy from you is critical in helping you streamline your marketing efforts to boost sales. And we’re talking critical here, business critical. More important than a good HR department, a strong leader, or even a decent supply of coffee!

Whoa, Back Up. What is a sales conversion rate, and why do I care? Let’s start by defining sales conversion. This is simply when a visitor to your site “converts” or becomes a customer. One minute she’s just browsing, and then BAM! She buys something. Congratulations. You just had a sales conversion. So it stands to reason that your sales conversion rate would refer to the rate of instances of visitors becoming customers. This number will be a percent of overall visits.

Why does it matter? Having tens of thousands of visitors to your site doesn’t necessarily mean that they will buy anything. If your sales conversion rate is low, you may have people visiting your site that don’t fit your demographic, and are therefore less likely to buy. This may be due to how and where you’re marketing your business. If you’re barking up the wrong trees, you’re not sending qualified leads to your site to convert.

How to Calculate A Sales Conversion Rate
Even if you’re a math-phobe, this is incredibly simple. To calculate your sales conversion rate, use this formula:

Total number of sales/total number of website visitors x 100

Let’s say last month you had 1,000 visitors to your website, and 50 sales. Using the formula 50/1,000 x 100, your sales conversion rate would be 5{24e5c30a1864c36400381ed620a3b478080759e050f234245dc1c418894bc1ef}.

Now, is this good or bad, you ask. Truth be told, it depends on your industry, your profit margin, and how much you charge for your products. For online sales, 3{24e5c30a1864c36400381ed620a3b478080759e050f234245dc1c418894bc1ef} is about average for a sales conversion rate in the US, so 5{24e5c30a1864c36400381ed620a3b478080759e050f234245dc1c418894bc1ef} would be pretty fantastic.

How to Boost Your Sales Conversion Rate
If your rate is lower than you’d like, or you simply want to increase it, there are a few ways to do so. The first is to look at where visitors to your site are coming from. Assess traffic from your top referrers and look at the content you’re providing to get them to click to your site. Is the information accurate for what people will find there?

For example, if you have a Facebook ad claiming “Free Shipping on All Orders!” but then visitors to your site see that actually you have to spend $200 to get that free shipping, realize that your ad is misleading, and may contribute to people visiting your site but not buying.

It’s important that your marketing message direct people to exactly what they can expect on your site, otherwise you end up with a high bounce rate, or number of people who visit just your home page and then leave when they don’t find what they’re looking for. Adding a money-back guarantee is another strategy to increase sales, since it gives people full confidence that if they don’t like your product, they can return it, no questions asked. And pay attention to your conversion rate as you change your marketing, since you will be able to connect an increase (or decrease, for that matter) in your conversion rate to whatever change you made. Knowing your sales conversion rate is a great benchmark to help you assess future results!