Conversion is a funny word, it means different things in different circles. Religiously, it means something different than when discussing currency conversion etc etc. For websites, we're talking about converting visitors to your site into customers. You can also convert your visitors into people who opt-in to get your newsletter, sign up for a sample, download an e-book, and the list goes on. Simply, conversion means converting casual visitors into people who complete your intended outcome.

You can easily calculate conversion by seeing how many people go to your website, and how many people complete the desired outcome. If you have 100 visitors to your website and you sell 5 light bulbs, then your conversion is 5%. If you have 100 visitors and 5 people buy light bulbs, and 15 sign up for your "All About Light Bulb Newsletter" your conversion is still 5%, and your conversion on the newsletter is 15%.

The goal of your newsletter would be to convert all the interested visitors into customers. So conversion is pretty simple, but how do you know if you have good conversion or not? Generally speaking, 5% would be outstanding. More specifically, you need to see where your traffic is coming from. If you are getting all 100 visitors from your pay per click campaign in Google (ads on the right and top of the page) and the advertisement says 'Cheapest Light Bulbs Online - Buy high efficient light bulbs at half the price' then I would consider 5% to be low.

The reason is, people that clicked on that advertisement knew what they were getting into. They saw the ad, they wanted to buy because thats all the ad talked about, and so unless they got to the page and saw something they were not interested in (higher price than expected, different model or no light bulb at all) then conversion would be lower. Remember to deliver on whatever promise you are giving. If you're promising half price light bulbs, you better send them to the exact page with light bulbs on it.

How would you improve conversion in this case? You would test. Do a test that runs for a week or so listing the EXACT price of the light bulb on the Google ad. Does that convert better than just saying 'half price'? If so, keep it. If not, ditch it. How long do you test something like that? It depends. If your conversion goes to less than 2% in one day, you can kill the ad. If your conversion goes to 4.5% keep it around and test a couple more days or weeks. You need to have higher amounts of traffic to really know if something is converting well or not. If you are only getting 100 visitors, you'll have to test that much longer than someone with 10,000 visitors a day. 5% loss in income is felt much harder on those websites.