The conversion rate is a metric used in marketing and sales to measure the effectiveness of a campaign, website, or sales process in turning potential customers into actual customers. It is calculated by dividing the number of conversions (successful outcomes, such as purchases or sign-ups) by the total number of visitors or leads, then multiplying by 100 to express the result as a percentage.
Formula:
Conversion Rate = (Number of Conversions / Total Number of Visitors or Leads) × 100
Example:
If an e-commerce website receives 1,000 visitors in a month and 50 of those visitors make a purchase, the conversion rate would be:
Conversion Rate = (50 / 1000) × 100 = 5%
A higher conversion rate indicates a more effective campaign or user experience, while a lower rate may suggest areas for improvement.