Conversion rate is the percentage of app users who take a desired action, often completing a specific goal or doing something to benefit the app’s owners. Common conversion goals include making a purchase, signing up for a service, subscribing, or engaging with specific features. 

It is a key metric used to evaluate how user interactions (or lack thereof) affect the financial prospects of the app in question.

Conversion rate formula

The conversion rate is calculated using the following formula:

Conversion Rate = (Number of users who performed a desired action / Total number of app users) x 100

For example, if an app has 1,000 total users and 100 of them make a purchase, the conversion rate would be 10%. Typically, higher conversion rates are favorable for app developers or those who own and manage apps.

Why is conversion rate important?

• Performance measurement. Conversion rates are a key performance indicator (KPI) to assess how well an app achieves its goals. It provides insights into the effectiveness of the user experience and design in encouraging desired actions. 
• Optimization opportunities. Knowing the conversion rate helps identify areas for improvement. By analyzing user behavior and conversion patterns, developers can optimize the app to enhance the user journey and increase conversion rates.
• Resource allocation. By knowing which features or elements contribute most to conversions, developers can prioritize efforts and investments in areas that have a higher impact on the app’s success.
• User experience enhancement. Understanding conversion rates allows for a focus on improving the overall user experience. By addressing pain points or friction in the user journey, developers can create a more seamless and satisfying experience.
• Revenue generation. Optimizing conversion rates can lead to a higher income for those who own apps, especially if the desired action being measured involves users making a payment of whatever form.