Conversion Rate
Definition
The percentage of website visitors who complete a desired action.
Example Use Case
A software company tweaks its pricing page layout and sees a 15% increase in demo sign-ups.
Conversion rate is the share of visitors who complete the action you care about — a purchase, a signup, a form submission, a demo request. It is calculated by dividing conversions by the relevant visitors, and it is only meaningful once you have decided exactly which action counts and who is in the denominator.
Definition is where most confusion arises. Counting all sessions against a purchase understates the rate, because many visitors were never in a position to buy. Counting only visitors who reached the checkout flatters it. Neither is wrong, but the two are not comparable, and a reported figure without its definition is close to useless.
Its practical value is as a diagnostic rather than a scorecard. A rate that falls after a site change localises a problem, and comparing rates between traffic sources often reveals that one channel delivers far better-qualified visitors than another. Improving it is the work described in conversion rate optimization.
