# Measure Cost per Conversion and Conversion Rate

There are dozens of conversion goals in digital marketing, but most fall into one of these 10 categories: Purchase. Form submission. Sign up / Subscribe. Clicking a specific button. Create an account. Content shares. Follow on social media. App install. Event attendance. Phone calls. Depending on your type of business and goal, you may use one or a combination of conversions in your marketing. Think about what conversions you plan on measuring. We’ll how to determine what you should pay for a conversion in later steps.

## 2. Calculate your conversion rate by using this formula: Conversion rate = Number of Conversions / Number of Visitors x 100.

Example: 10 leads / 50 Visitors = 0.20 or 20% conversion rate. Example: 22 sales / 2000 Visitors = 0.011 or 1.1% conversion rate. Example: 91 calls / 750 visitors = 0.12 or 12% conversion rate. Higher conversion rates allow you to spend more money to acquire a customer or lead because each dollar put into advertising ends up being more profitable.

## 4. Use your conversion data to determine your cost per conversion.

The specifics of where you’ll go to find these numbers will vary by platform. In this example, we’re using Facebook Business Manager to look at the number of leads and the total amount spent, to determine the cost of a conversion. Here, you can see that conversions are displayed as Results, and the metric being tracked is leads. The Amount spent is also displayed. To calculate the cost per conversion, use this formula: Cost per Conversion = Amount Spent / Results. Here the cost per conversion in the first row of data is \$372.40 / 6. This equals \$62.07.

## 5. Keep in mind that the cost per conversion formula isn't limited to sales. It can include any desired action that a prospect takes.

Example: \$100 advertising cost/5 sales = \$20 cost per conversion. It can also be said as Cost per Sale. Example: \$500 traffic cost/100 leads = \$5 cost per conversion. It can also be said as Cost per Lead. Example: \$748.57 ad costs/42 Calls = \$17.82 cost per conversion. It can also be said as Cost per Calls.

## 6. Determine your target conversion rates and costs.

There’s no one-size-fits-all metric for target conversion rates and conversion costs. These figures will vary by industry, platform, and company. You can check resources that benchmark conversion rates for various platforms to see if you’re in line with the averages. Regarding the ideal cost for a conversion, this metric will also depend on where this conversion is in the funnel. Modern digital marketers are comfortable acquiring customers at a loss because they are confident that they can turn a profit as they ascend and upsell a customer. However, this ideology may not apply to your business.