Which of the following is the correct formula for conversion rate?
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Correct answer: transactions / clicks.
Why this is the answer
Conversion rate measures the effectiveness of your marketing efforts in turning interest into action. The formula transactions / clicks correctly represents this by dividing the number of successful conversions (transactions) by the total number of opportunities (clicks) that led to those conversions. revenue / cost is a formula for Return on Investment (ROI) or profitability, not conversion rate. cost / action is a formula for Cost Per Acquisition (CPA) or Cost Per Action, indicating the expense of each conversion. revenue / transactions calculates the average revenue per transaction, not the rate at which clicks convert.
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