What is a Conversion Rate?

Definition

A conversion rate is a key performance metric in sales and marketing that measures the percentage of users or leads who complete a desired action. This « conversion » can be any goal, from making a purchase to filling out a form or downloading a file. It is a fundamental measure of the effectiveness of a campaign, website, or sales process. The rate is calculated with the following formula:

Conversion Rate=(Total Number of Visitors or LeadsNumber of Conversions​)×100

Examples

• Website Landing Page: A landing page receives 1,000 visitors in a month, and 50 of them fill out the contact form. The conversion rate of the landing page is (50 / 1,000) * 100 = 5%.
• Email Marketing: A marketing email is sent to 10,000 subscribers, and 200 of them click the link to register for a webinar. The email’s conversion rate is (200 / 10,000) * 100 = 2%.
• E-commerce: An online store has 20,000 unique visitors, and 400 of them complete a purchase. The site’s sales conversion rate is (400 / 20,000) * 100 = 2%.
• Sales: An SDR qualifies 80 MQLs into 20 SQLs. The MQL-to-SQL conversion rate is 25%.

Advantages/Benefits

• Performance Measurement: Provides a clear and simple metric to evaluate the success of marketing campaigns, webpages, and sales processes.
• Optimization (CRO): A core metric in Conversion Rate Optimization (CRO), where businesses use A/B testing and other methods to improve the rate.
• Cost Efficiency: Increasing the conversion rate means you get more value from the traffic or leads you already have, improving your return on investment (ROI).
• Data-Driven Decisions: Allows teams to make informed decisions based on what is actually working, rather than on assumptions.

Related terms

• A/B Testing
• Call to Action (CTA)
• Landing Page
• Sales Funnel
• KPI (Key Performance Indicator)
• ROI (Return on Investment)

Related terms

• A/B Testing
• Call to Action (CTA)
• Landing Page
• Sales Funnel
• KPI (Key Performance Indicator)
• ROI (Return on Investment)