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A conversion rate is a measurement, also often referred to as a metric, which is defined as the percentage of visitors who take or complete a desired action on your website.

This is probably the most important metric you can measure. By measuring a percentage of visitors you can guage how well or how badly your website is doing inconjunction with analysis of your traffic levels.

Here's a summary using the major four types of websites:

Customer service and support web sites
The conversion measurement here is the number of people as a percentage of total visitors who successfully locate the information you want them to find. A successful convert is therefore someone who finds the answer they were looking for when searching through the web site database, finds the downloadable PDF or emails for further information or service provision.

Retail or E-commerce websites
The conversion measurement should be the number of visitors who make a purchase directly from the as a percentage of total visitors. A successful convert is the visitor who is guided by your website and buys one or more of your products.

Lead-Generation Sites
The conversion measurement should be the number of visitors as a percentage of total visitors who opt-in and give you the right to contact them again. A successful convert is therefore someone who has registered their interest, filled in your contact forms to download information or 'White Papers' or simply got in touch with you directly through your website.

Content / Community web sites
The conversion measurement should be the number of visitors as a percentage of total visitors who sign up to receive more information or register their details becoming part of your community. A successful convert is therefore someone who has subscribed to your newsletter, filled in your contact forms to subscribe to your forums or registered to get more information. Similar to lead generation web sites.