Conversion Rate Question

conversion rate question - very simple

[dherman76]

Hello,
This is my first post on this site - I'm very excited to be a part of it. We read about conversion rates each day and assume that everyone knows how to calculate them, etc. Is there any set formula that everyone uses?

Thanks,
Darren Herman

[Mardi_Gras]

Welcome to WebmasterWorld, Darren. Conversion rate is simply your number of purchasers (or whatever criterion you decide) divided by the number of visitors. So if you have 100 visitors, and 3 meet your definition of a purchase, then you have a conversion rate of 3%.

[dherman76]

Thank you for the quick response. That is what I thought it was. How would one calculate the cost per conversion?

[Dorian]

You need to divide the number of sales but your advertising cost.

You make $10 per sale
You've spent $20 on advertising
You've had 3 sales

Then your cost per sale = $20 / 3 = $6.66

Probably more interesting is your return on investment (ROI). The simple formula: (Sales minus Investment = Profit) gives you your ROI. There are many more complicated versions of this taking into account the product and the source of investment (ie advertising) but this one is a good (I'd say essential) start.