Get any group of webmasters talking about site performance, and one of the most common words you'll hear is conversion - that's because typically a visitor generates no revenue until he becomes a conversion.

In an ecommerce environment, i.e., a site that sells products, conversion occurs when a visitor places an order. Site owners are very interested in what percentage of visitors place orders, and call that statistic the conversion rate. The conversion rate is important in several ways. First, it is a measure of the performance of different marketing efforts (e.g., visitors who click on banners on Site A may convert at twice the rate of those from Site B, making it better to advertise on Site A.) Second, it is a measure of the performance of the site itself - if the overall conversion rate is low, it may mean that the site is unattractive, pricing is too high, the site hard to navigate or has a complicated ordering process, etc.

Search engine marketers often measure conversion rate at the keyword level as part of a PPC management program - this lets them cut poorly performing keywords while retaining or boosting profitable ones, and maximizing ROI.

Sites that generate leads or have visitors take some other action also talk about conversion in the essentially the same way - the visitors who complete the qualifying form or take another action are considered conversions.

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