There are two names for the series of stages that incoming leads go through. Sometimes it is called a sales funnel, sometimes — a sales pipeline. The meaning is the same, but you can see the difference in mentality here. Ultimately you put as many clients as you can at the “start” stage and see how many of those will get to the end, which we will call “Won Deal” or “Active subscription” or any other result you want to achieve. As a rule, at the end stage, you will see much fewer clients than you have started with. This difference between the number of people you started with and the amount you end up with is called a conversion rate.
Conversion rate can also be calculated for each step of the sales process if you measure the difference between each intermediary stage your leads come through. In other words, there are certain actions your leads have to take before they get to the next stage, like “visiting your website” or “submitting a form”. If you calculate how many leads move forward to the next stage, you will get the conversion rate between two stages of the sales pipeline.
Conversion rate is a relation of the leads who pass a particular stage to the total amount of leads who approach it. For example, if out of 100 website visitors only 10 filled an inquiry form — you have a 10% conversion rate for this form.
Note: conversion is always measured in percentages.