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What is Conversion rate?

Definition, examples, and more

Definition

The percentage of users who complete a desired action, such as starting a trial, subscribing, or upgrading. Common funnel examples include install → trial, trial → paid, or view paywall → subscribe. Conversion rate is a critical KPI for acquisition and monetization performance.

How to Calculate

Conversion Rate = (Number of Users Who Completed Action / Total Users Who Could Have Completed It) x 100. Install-to-Trial: 22,000 / 100,000 = 22%. Trial-to-Paid: 8,800 / 22,000 = 40%. Install-to-Paid: 8,800 / 100,000 = 8.8%.

Example

A mindfulness app tracks its full funnel: 100,000 installs per month, 22,000 start a trial (22% install-to-trial), and 8,800 convert to paid (40% trial-to-paid). Their overall install-to-paid conversion rate is 8.8%, generating $87,912/month in new MRR at $9.99/month.

Why Conversion rate Matters

Conversion rate is the biggest lever for growing revenue without spending more on acquisition. A sleep app was spending $100K/month on ads generating 50,000 installs at a 3% conversion rate (1,500 subscribers). By A/B testing their paywall and improving conversion to 4.5%, they added 750 subscribers per month — equivalent to $50K in additional ad spend — for zero extra cost.

Frequently Asked Questions

What is a good conversion rate for a subscription app?

Benchmarks vary by funnel step: install-to-trial rates of 15-30% are solid, trial-to-paid rates of 40-60% are strong, and overall install-to-paid rates of 3-10% are typical. Top-performing apps in health, fitness, and productivity often exceed these. Focus on improving your own rates rather than chasing universal benchmarks.

Should I optimize for trial starts or paid conversions?

Optimize for paid conversions (or ideally, retained paid subscribers). A high trial start rate with low trial-to-paid conversion might mean you are attracting freebie-seekers. The most valuable metric is install-to-paid conversion, or even better, install-to-retained-subscriber at the second billing cycle.

How do I find where users drop off in my conversion funnel?

Map your full funnel: install > onboarding complete > paywall view > trial start > trial engagement > paid conversion > renewal. Calculate the conversion rate between each step. The step with the biggest drop-off is where you should focus first. Tools like Botsi provide ready-made funnel visualization for subscription apps.

Category
Subscription App Terminology
Related Area
Mobile App Growth & Monetization

More terms starting with “C

Cancellation

The act of ending a subscription, either by the user or automatically due to billing failure. Understanding cancellation timing and reasons is key for designing retention strategies, deflection flows, and win-back campaigns.

Cancellation survey

A short feedback form presented during the cancellation process to understand why a user is choosing to leave. These insights inform product improvements, pricing strategy, and targeted win-back efforts.

Churn rate

The percentage of subscribers who cancel or do not renew their subscription over a given time period. Churn can be voluntary or involuntary and is a core metric for measuring retention health and forecasting revenue growth.

Click-through rate (CTR)

The ratio of users who click on a specific call-to-action (e.g., email link, push notification, paywall button) versus those who viewed it. CTR is a key engagement metric for evaluating creative performance and funnel effectiveness. Click-through-rate originated in the email and banner ad world, where everything was on a desktop. With mobile, some companies now call this same metric tap-through-rate since people are tapping on their phone vs clicking on desktop, but at the end of the day it's really the same type of measurement.

Cohort analysis

A method of analyzing user behavior by grouping users based on shared characteristics — most often the date they first installed or subscribed. This allows teams to compare retention, LTV, and monetization trends across cohorts over time.

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