Glossary
What is conversion rate?
Conversion rate is the share of people who take a desired action out of everyone who could: visitors who sign up, sign-ups who start a trial, trials who pay. It's always relative to a step, so funnels have several conversion rates. Comparing them by traffic source shows which channels bring real customers.
Funnel steps
| Step | Conversion rate |
|---|---|
| Visit to sign-up | Sign-ups ÷ visitors |
| Sign-up to activated | Activated ÷ sign-ups |
| Trial to paid | Paying ÷ trials |
| Visit to paid | Paying ÷ visitors |
Why it varies by source
Visitors from a search for your exact category convert better than visitors browsing a launch platform for fun. Directory visitors who read a specific listing often convert well; deal-site visitors may sign up but not pay. Tag links with UTM parameters and compare each source's conversion to paid.
Improving it
Clear value proposition, fewer form fields, proof near the button, fast pages and matching the promise of the listing or ad that brought the visitor.
Example
A founder compares two months of channels: Product Hunt sent the most visitors at 0.4% visit-to-paid; a niche directory sent a tenth of the traffic at 3%. She spends more effort on niche directories.
FAQ
What's a good SaaS conversion rate?
It varies by product, price and traffic; compare your own steps and sources.
Should I measure conversion by channel?
Yes. Totals hide which channels work.
Is a sign-up a conversion?
It's one step; define conversions for each step that matters.