How to Determine Conversion Rate: Formula, Equation, and Proven Ways to Improve It

If you’re trying to grow an eCommerce business, understanding how to determine your conversion rate is essential. Whether you want to track sales, lead generation, or subscriptions, your conversion rate is the most direct way to measure how well your website is turning traffic into revenue.

In this guide, we’ll explain:

• What conversion rate is and why it matters

• The correct conversion rate formula (and variations)

• How to calculate conversion rate using real-world examples

• Tips to improve your conversion rate with simple, actionable strategies

Let’s break it down.

What Is Conversion Rate?

Your conversion rate is the percentage of visitors who complete a specific action you define as a “conversion.” That action could be:

• Making a purchase

• Filling out a contact form

• Signing up for a newsletter

• Starting a subscription trial

It’s a key performance indicator (KPI) for any eCommerce or marketing campaign. No matter how much traffic you drive, if your site isn’t converting, you’re leaving growth on the table.

Why Conversion Rate Matters in eCommerce

Conversion rate reflects how efficiently your website or funnel turns visitors into customers. A small improvement can lead to significant gains in revenue.

Let’s say your store gets 10,000 monthly visitors and converts 1% of them into buyers. That’s 100 sales. If you improve that to 2%, you now have 200 sales — without increasing traffic or ad spend.

Platforms like Checkout Champ are designed to help online stores achieve these exact results by removing friction from the checkout process and increasing speed, upsell efficiency, and mobile responsiveness.

The Conversion Rate Formula (and Variants)

The most common conversion rate equation is:

Conversion Rate = (Number of Conversions ÷ Total Visitors) × 100

This conversion rate formula helps you measure the percentage of users taking your desired action.

Example:

If 2,000 people visit your site and 100 of them buy a product, your conversion rate is:

(100 ÷ 2,000) × 100 = 5%

Depending on your funnel, here are additional conversion rates formulas you may use:

• Lead Conversion Rate = (Leads ÷ Visitors) × 100

• Email Signup Rate = (Subscribers ÷ Visitors) × 100

• Cart Completion Rate = (Purchases ÷ Cart Starters) × 100

• Landing Page Conversion Rate = (Form Fills ÷ Page Visits) × 100

Every funnel has its own version, but they all follow the same equation structure.

How to Calculate Conversion Rate (Step-by-Step)

If you’re using Google Analytics, Shopify, or a platform like Checkout Champ, your conversion rate is often tracked automatically. But it helps to know how to calculate it manually in case you need custom reporting.

Step 1: Define your goal.
What action are you measuring? Purchases? Form submissions?

Step 2: Count the number of conversions.
This is how many users completed that action in a specific period.

Step 3: Divide conversions by total visitors.
Multiply the result by 100 to get your percentage.

Quick Example:

You run a landing page with 1,000 unique visitors. 75 sign up for your newsletter.

Conversion Rate = (75 ÷ 1,000) × 100 = 7.5%

What Is a Good Conversion Rate?

This varies depending on your niche, product price, and traffic source, but here are general benchmarks:

• eCommerce average: 2–3%

• High-performing stores: 4–8%

• Landing pages (optimized): 10%+

• Subscription offers: 3–6%

Improving your conversion rate — even by 1% — can dramatically increase profit margins. It’s often easier and cheaper than trying to double your traffic.

7 Proven Ways to Improve Your Conversion Rate

Now that you know how to calculate conversion rate, here’s how to improve it.

1. Speed Up Your Website

Page speed is a huge factor. A delay of even one second can reduce conversions by 7% or more. Checkout Champ prioritizes lightning-fast checkout flows to combat this.

2. Use a 1-Page Checkout

Eliminating extra steps reduces friction. Instead of sending users through 3–4 pages, use a simplified 1-page layout that includes shipping, billing, and payment options on one screen.

3. Enable Smart Upsells and Cross-Sells

Post-purchase upsells, pre-checkout add-ons, and smart bundles increase average order value (AOV) and conversion rates. Checkout Champ supports dynamic upsell funnels to help you scale.

4. Optimize for Mobile

More than half of all eCommerce traffic is mobile. If your site isn’t responsive or loads slowly on phones, you’re losing conversions. A mobile-first design is no longer optional.

5. Use Trust Signals

Display secure payment badges, reviews, and money-back guarantees prominently. These remove buyer hesitation and build instant credibility.

6. A/B Test Everything

Test headlines, product images, CTA buttons, and page layouts. Even small tweaks — like changing “Buy Now” to “Get Yours Today” — can move the needle.

7. Recover Abandoned Carts

Use email and SMS reminders to bring shoppers back. Platforms like Checkout Champ integrate with tools like Klaviyo and Twilio to automate recovery sequences that drive additional conversions.

Why Checkout Champ Can Help You Improve Conversion Rates

While calculating your conversion rate is a great first step, the real value lies in optimizing it. Checkout Champ is built to help brands improve performance in three key areas:

• Checkout Speed: Fast-loading, single-page checkout = fewer drop-offs

• Conversion Tools: Upsells, down-sells, and cross-sells increase completed purchases

• Data-Driven Decisions: Advanced analytics show what’s working and where to optimize

Whether you’re a direct-to-consumer brand or an enterprise store looking to scale, Checkout Champ offers the infrastructure to drive higher conversion rates and maximize ROI.