What is conversion rate?

Conversion rate is the percentage of visitors or users who complete a desired action, such as a purchase, form submission or demo request, out of the total number of visitors. It shows how efficiently your website, landing page or campaign turns traffic into measurable business outcomes.

How to calculate conversion rate

The basic conversion rate formula is simple. Take the number of conversions and divide it by the total number of visitors or sessions, then multiply by 100 to get a percentage. For example, if 50 people buy from 1,000 visitors, your conversion rate is 5 percent. You can apply the same formula to sign ups, lead forms, trial activations or any other key action.

In digital marketing, you often track multiple conversion rate metrics. Typical examples include overall website conversion rate, landing page conversion rate, add to cart rate for e commerce and lead to opportunity rate for B2B funnels. Clear definitions are critical so your team reads the data in the same way.

Why conversion rate matters for growth

Conversion rate is one of the highest leverage metrics for both e commerce and B2B companies. A higher conversion rate means you get more revenue or qualified leads from the same amount of traffic and media budget. It directly affects your cost per acquisition, your return on ad spend and ultimately your profitability.

For growth minded teams, improving conversion rate is often faster and cheaper than buying more traffic. Small gains on key pages, like your product detail pages or lead gen forms, compound across all channels including SEO, paid search, social ads and email.

Key factors that influence conversion rate

  • Quality and intent of traffic, for example whether visitors come from high intent search queries or broad awareness campaigns.
  • User experience and page speed, including how quickly users can understand the page and complete a task.
  • Offer and value proposition, such as pricing, guarantees, social proof and clarity of the benefits.
  • Design and copy, including headlines, product descriptions and calls to action that guide users to the next step.
  • Friction in the flow, for example the number of form fields, required steps in checkout or distracting elements.

When you optimise each of these elements in a structured way, your overall conversion rate tends to rise across multiple channels, not just on a single page.

How to improve conversion rate in practice

Effective conversion rate optimisation starts with data, not opinions. Use analytics, session recordings and heatmaps to see where people drop off and which elements they interact with. Tools like Hotjar can help you understand behaviour, and you can follow a clear process using our guide on how to use Hotjar for conversion optimisation.

Next, translate insights into hypotheses and test them with A/B experiments. This could include new headlines, different page layouts, simplified forms or stronger proof like reviews and case studies. For a deeper dive into structure and examples, see our article on how to make a conversion oriented website.

For busy founders, CMOs and marketing managers, monitoring conversion rate across key journeys gives you a clear, comparable metric to align your team. It ties creative work, media buying and UX changes back to one simple question, how many visitors actually convert into customers or qualified leads.