One of the most-watched metrics in any business that moves visitors or leads through a funnel. Small conversion improvements compound across stages and produce disproportionate revenue impact.
Definition
Conversion Rate - the percentage of people who complete a desired action (signup, purchase, subscription, click) out of the total who had the opportunity. Each stage of a funnel has its own conversion rate.
Formula
Conversion Rate = (Number of Conversions ÷ Total Audience) × 100%
Common uses
- Marketing efficiency - measures how well marketing turns attention into action
- Funnel optimization - identifies which stages have the most leakage
- A/B testing - the standard outcome metric for experiments
Watch out
Conversion rate in isolation can mislead - a narrow audience can have great conversion but small volume. Watch conversion rate AND total conversions together.