Calculate Your Online Conversion Rate

How do you determine the natural online conversion rate for any product?

We’ve developed a formula to calculate this, as well as other key performance indicators. We won’t divulge the formula, but here are the factors we consider when making calculations.

Common logic is to set a site profitability goal while striving to achieve a conversion rate equal to or greater than the “universal average.” Yet in our experience, this formula leaves dollars on the table.

In every case we’ve observed, this approach results in conversion goals that are far too low to realize a product’s potential or even to inspire a Web development team. Another undesired result is other critical top-line metric goals are typically left undetermined or, at best, very vague. There’s simply no greater enemy of business than unclear goals and objectives. When you don’t know where you’re going, as the Cheshire Cat told Alice, “it doesn’t matter which way you go.”

The purpose of setting a baseline conversion rate is to maximize a product’s income and potential. There’s no way to accomplish this other than to evaluate every possible factor that affects conversion rate and to score each. Doing so will provide a big-picture, realistic overview of what level a Web site can be expected to perform at.

Factors fall into three primary categories: confidence and intent; the personal experience factor (PEF); and environmental and conditional factors.

Confidence and Intent

These factors occur before a visitor lands on your site and measure the confidence buildup that occurs prior to that event:

  • Unqualified. How much traffic on your site belongs there? A certain percentage of traffic doesn’t belong on your site simply because the visitor arrived by mistake. Another set of visitors needs a product or service you don’t offer.
  • Customer intent. What are your customers’ intentions toward your site and products? Will they buy today? Or do they intend to research a product online, then purchase it offline? Keyword research can help determine intent.
  • Brand confidence. How much confidence do visitors have in your products or brand before they arrive at your site? This, in a nutshell, is customers’ prior knowledge of your brand. It’s learned through word of mouth and the impact quotient of your marketing efforts, both online and off-.


This is the actual experience a visitor has during and after a visit to your site. The following factors contribute to a site’s PEF:

  • Planning. Is there a comprehensive, focused understanding of target-visitor buying models? How well do you communicate your unique value proposition in regard to what’s in the visitor’s heart?
  • Structure. Do the design, information architecture, and technology aspects of the site support the requirements of the buying and selling process? Does the visitor become disoriented or lose interest due to site flaws?
  • Momentum. Does the site’s conversion process channel visitor activity and motivate action? Does each page engage the buyer and persuade him to take action? Can you capitalize on up- and cross-sell opportunities?
  • Communications. Does your site content convey your message effectively, and is the copy persuasive? Is it unequivocally clear where visitors are, and why, based on their goals?
  • Value. Does the Web site communicate the value not only of your products and services but also of doing business with you? Are the benefits clear?
  • Service after the sale. How do you support customers after the transaction? Do you find ways to exceed their expectations? Can customers find their shipping and product questions on the site easily, or at all?

Environmental and Conditional Factors

These factors exist largely outside of a company’s immediate control:

  • Product relevance. Do your products deliver on the promise made to the customer? How relevant is your offering?
  • Conversion type. Is your site’s objective to sell products or services, sell content, or generate leads? We know a significant percentage of all traffic on an e-commerce site won’t convert.
  • Product buy in and buying cycle. How complex is the sales process? Does your product require endorsement from another person, in addition to the visitor? (common for many B2B sites). How much time and effort is a visitor willing to devote to the conversion process?
  • Market potential. This is the total dollars available in a product or service category. Keyword research can help determine this.
  • Competitive environment. What are your competitors doing, and how does it affect your sales?

Each of these factors must taken into account and individually scored. Our formula also calculates the effect each factor may have on another one.

For example, all factors being equal, a Web site with strong brand confidence might expect the same conversion rate as a lesser-known site with a stronger PEF score.

When Citrix Online introduced a new product, GoToMeeting, we scored these factors using lessons gleaned from our experience with its more established GoToMyPC site. Being able to compare and contrast made some factors easier to measure. Others, like market potential, required more research. Finally, we determined a natural baseline for conversion that will allow Citrix to realistically project the site’s performance.

An added benefit of the formula is it reveals potential weaknesses in a product offering and serves as a guide for recommending improvements. Think about these factors. They’ll help with your planning.

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