A conversion ratio, also called a conversion rate, is an evaluation statistic for businesses to determine how many prospects are actually buying products and services. A conversion ratio may determine how many viewers called an 800 number after seeing a commercial compared with how many actually saw the commercial. A conversion ratio may calculate how many Web visitors ended up buying products from your website or the number of people who bought products after tasting a sample at a store. Conversion numbers let you know what percentage of prospects you are actually closing.
Instructions
1. Use your type of business to arrive on the proper method of tracking. A salesman should use the total number of pitches compared with actual sales, for example, where a website should compare the number of total visitors with the number of those who bought products on the site.
2. Implement your tracking system and adhere to it for a designated period of time---one month, for example.
3. Keep track of the number of prospects and the number of sales. For example, say you have 1,000,000 visitors with 50,000 sales.
4. Divide the total number of sales by the total number of prospects exposed to your products, then multiply the result by 100: (50,000 / 1,000,000) x 100 = 5. This is the conversion rate; your company is making a sale on 5 percent of visits.
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