Conversion Rate

What is Conversion Rate?

Conversion rate is the percentage of visitors who complete a desired action. In ecommerce, it's typically the percentage of website visitors who make a purchase. In SaaS, it might be signups or trial-to-paid conversions.

Conversion rate is one of the highest-leverage metrics in any business. Doubling your conversion rate is equivalent to doubling your traffic, but usually much cheaper to achieve.

Why Conversion Rate Matters

Small conversion improvements create massive revenue impact. If you spend $10K on ads driving 10,000 visitors at 2% conversion, you get 200 customers. Improve to 3% conversion and you get 300 customers from the same spend, a 50% increase.

Conversion rate also determines which acquisition channels are profitable. Higher conversion means you can afford higher CPCs and CPMs.

Conversion Rate Benchmarks

Ecommerce average: 2-3%. Top performers: 5-10%. B2B SaaS trial-to-paid: 15-25%. Consumer SaaS: 2-5%. Your benchmark depends on industry, price point, and traffic quality.

Website funnel:

• Visitors: 50,000
• Add to cart: 5,000 (10%)
• Begin checkout: 2,500 (5%)
• Complete purchase: 1,500 (3%)

Conversion Rate = 1,500 ÷ 50,000 = 3%

If you improve conversion from 3% to 4%, that's 33% more revenue from the same traffic.