Conversion rate
Also called: CVR, conversion rate formula, signup rate, conversion percentage
Definition
Conversion rate is the percentage of visitors, clicks or users who complete a target action, such as signing up, starting a trial or buying. It equals conversions divided by the total number of chances to convert, times 100.
Conversion rate tells you how often an opportunity turns into the outcome you want. Visitors to signups, trials to paid customers, demo requests to deals: each step has its own conversion rate.
How it works
Conversion rate = conversions / total opportunities x 100
Google Ads defines it as the average number of conversions per ad interaction, shown as a percentage, and gives the example: 50 conversions from 1,000 interactions is a 5% conversion rate.
Two details trip people up:
- Define the denominator. Visitors, sessions, clicks and users give different numbers. Pick one and keep it.
- Count rules matter. Google notes that if you track more than one conversion action, or count every conversion instead of one per interaction, the rate can exceed 100%.
Worked example
A landing page gets 2,400 visitors in a month. 96 start a free trial.
Visitor-to-trial conversion rate = 96 / 2,400 x 100 = 4%.
Of those 96 trials, 18 become paying customers.
Trial-to-paid conversion rate = 18 / 96 x 100 = 18.75%.
Overall visitor-to-customer rate = 18 / 2,400 x 100 = 0.75%.
Breaking it down by step shows where the leak is. If trial-to-paid is healthy but visitor-to-trial is low, fix the page, not the product.
Why it matters for marketers
Conversion rate links traffic to revenue. Doubling it has the same effect as doubling traffic, and is often cheaper. It also changes customer acquisition cost directly: the same spend divided by more customers.
Compare conversion rates by source. A channel with modest traffic but strong conversion can beat a high-traffic channel full of people who were never going to buy.
How it plays out on Reddit
Visitors from Reddit tend to arrive with context. They read the thread, saw someone describe a problem like theirs and clicked because the answer fit. Whether that converts better than your other traffic depends on how well the reply matched the question, so measure it rather than assume it.
To measure:
- Use UTM parameters on links you post, where the subreddit allows links.
- Add a "How did you hear about us?" field, because many Reddit readers come back later through search or direct.
- Compare by thread type. Replies to posts with clear buying intent ("which tool should I use for X?") usually convert better than replies to general discussion, because the reader was already choosing.
One more lever: the landing page. If the reply says "free plan, takes 5 minutes to set up", the page should say the same thing above the fold. A mismatch between the promise in the thread and the page kills conversion.
Common mistakes
- Comparing rates with different denominators. Sessions and users are not interchangeable.
- Celebrating small samples. 3 signups from 20 visits is 15%, and means almost nothing yet.
- Optimizing one step in isolation. A higher signup rate that brings in poor-fit users can lower trial-to-paid.
Frequently asked questions
How do you calculate conversion rate?
Divide the number of conversions by the number of opportunities (visitors, clicks or users) in the same period, then multiply by 100.
What is a good conversion rate?
It varies widely by industry, offer and traffic source. Compare against your own history and between your channels rather than a generic benchmark.
Can conversion rate be over 100%?
In Google Ads, yes, if you count multiple conversions per interaction. Google notes this happens when tracking several conversion actions or counting every conversion.