In sales, conversion rate describes the percentage of potential customers who complete a desired action.
The action depends on the business and the stage being measured. It might be purchasing a product, submitting a lead form, starting a trial, subscribing to a service, or completing an online checkout. A common calculation divides the number of conversions by the number of visitors or prospects, then multiplies by 100.
For example, if 50 of 1,000 website visitors make a purchase, the purchase conversion rate is 5 percent. Businesses often track several rates in a funnel rather than treating every visitor as equally likely to buy. The definition of a conversion should therefore be stated clearly when comparing results.
Conversion rate differs from retention rate, which measures how many customers remain over time, and churn rate, which measures customers or revenue lost. It also differs from click-through rate, which measures clicks on an advertisement or link and does not necessarily indicate a completed sale.