What is conversion rate?
Put simply, conversion rate is the percentage of prospective customers or partners who take a desired action. This action could be anything from clicking on a link, filling out a form, or making a purchase. It’s used across the business world but is also an important metric to track in your partner program.
You can track the rates of any number of conversions, depending on your business goals. Some common ones include:
- Lead conversion rate
- Click-through rate (CTR)
- Cart abandonment rate
- Form completion rate
- Call conversion rate
- Trial-to-customer conversion rate
- App download-to-registration rate
- Free trial conversion rate
- Subscription renewal rate
- In-store conversion rate
- Onboarding conversion rate
- Referral conversion rate
Calculating your conversion rate is simple, once you’ve decided on the actions you’re measuring.
First, determine the total number of actions taken. For instance, how many people filled out a form. Then, divide this by the total number of potential customers who had the opportunity to take that action. This might be the total number of visitors to that landing page. Multiply the result by 100 to get your conversion rate as a percentage.
Conversion rate calculation = (# of actions taken/# of potential actions) x 100
In practice, if 1,000 people visited your landing page on your partner’s website, and 50 people signed up for your service, your conversion rate would be 5%. Or, if you called 50 potential partners and 10 of them signed up for your partner ecosystem, your conversion rate would be 20%.
Understanding your conversion rate across different actions can help you gauge the effectiveness of your marketing efforts, find the best channels to reach customers, identify areas of improvement, and make data-driven decisions in the future.