Conversion rate is the percentage of visitors or users who take the desired action. This action could be a click of a button or, more commonly, buying something or subscribing to a service. Conversion rate is calculated by dividing the number of visitors who converted (took the action) with the total number of visitors, and then multiplied by 100%.
This metric is used to understand what happens when the user is on a website or using an app. Knowing how many users are actually completing the goal helps to determine the effectiveness of the design and user experience and identify areas that need improvement.
Optimising a website or an app to improve conversion rate is called conversion rate optimisation (CRO). First, the company makes a hypothesis about why the visitors are not converting. Then they try to find a solution to their hypothetical problem. The change is then shown to the visitors using A/B testing. This means that half of the visitors see the old version of the webpage/app and half see the new one. The next step is to gather information about which version of the page performs better. And finally, the company can use this data to decide whether to make the change permanent or keep on looking for other solutions.