The word conversion marks the moment a visitor becomes a buyer or an enquirer. You decide what counts as a conversion. For a webshop it is the purchase, for a service company it is more likely a quote request or a phone call.
The conversion rate shows what share of visitors reach this step. If two people out of a hundred request a quote, that is two per cent. The number on its own says little, because it varies widely between industries and traffic sources, yet if you follow how it changes, it shows whether reaching the goal became easier after a change.
Where people get lost
A page rarely converts poorly because of one big mistake. Usually small obstacles add up, a vague headline that does not say what you offer, a form that is too long, a button that cannot be seen on mobile, or a cost that only appears in the last step. Walking through the user journey together with visitor data shows at which step most people drop off.
Next to the big goals, it is worth measuring the smaller steps as well. Before requesting a quote, a visitor usually looks at a service page or reads a case study. These so-called micro-conversions show whether the interest is there and the trouble is only at the last step, or whether we lose people earlier.
Conversion often differs between mobile and desktop, so it is worth looking at the two views separately. If the mobile rate is much lower, that usually points to a problem with the phone interface, a form that is hard to fill in or a button that is too small.
Improving conversion therefore rarely starts with a spectacular redesign. First it is worth understanding what your visitors are looking for and what holds them back, and the targeted changes come after that. This way the same traffic can bring more enquiries or purchases, and your advertising budget goes further.
If you advertise, measuring conversions in the ad platforms matters too, because that is how the algorithm learns who is worth showing your ads to. This needs a pixel and conversion tracking, which has its own entry.