Definition:
Conversion rate represents the percentage of visitors who complete a purchase after viewing a product or visiting a store. It is a key metric used to evaluate how pricing affects customer buying behavior.
Why It Matters:
- Helps measure how price changes influence purchase decisions.
- Provides critical input for price optimization models.
- Enables merchants to balance price levels with demand.
Example:
A product page receives 1,000 visitors, and 40 customers complete a purchase. The conversion rate is 4%.