Whether you realize it or not, your website conversion rate is a key component in the success of your business, regardless of what kind of business you're in. Unfortunately, a lot of online entrepreneurs haven't the faintest idea of what a conversion rate is and how there's stacks up. So, let's try to clarify things a bit.

Before we discuss conversion rates, let's just talk about conversion.

What are you converting?

Any useful discussion about conversion rates must start with what you're actually trying to accomplish with your website. For example, if sell something directly on your website, than each sale you make would be your conversion.

On the other hand, these things count as "conversions" as well:

• New Subscriptions
• Affiliate Clicks or Affiliate Sales
• New Leads
• Advertising Clicks (like Google Adsense)
• A Phone Call
• Any other "Most Wanted Response"

Here's an example: Let's say that you've developed and distributed an article and your resource box invites people to visit your site and subscribe to your newsletter. Let's also say that you're tracking each one of those clicks. Your "conversion" would be each new subscriber that you gain as a result of your article.

Conversion Rate Defined

In simplest terms, conversion rate is a measure of the number of "conversions" divided by the number of visitors.

In the example above, your conversion rate would be the total number of new subscribers divided by the total number of people who saw the article.

Here's an example of a conversion rate for a content website where the most wanted response is for visitors to click on your Google Adsense ads:

What to do with it

Now that you know what a conversion rate is, what are you supposed to do with it?

That's easy, figure out what your conversion rates are for each of the activities in your online business and then work on making them better.

Here's an example of what I mean... Several years ago when Google Adsense came out, I joined like everyone else on the planet. My initial conversion rate was in the dumps -- around 1% to 2% and I wan't making any real money with it.

So, I started testing and trying out new formats and new ways of displaying the ads until I got my conversion rate to an average of about 9%. Some of my sites even range up into the 20% bracket.

And that's what you have to do... test, try out new things, different layouts, etc. until you reach a conversion rate you're happy with. In fact, you should tweaking your online business for better conversion rates continually so that you can get maximize profits with the least amount of work... And who doesn't want that?