The core principal of testing a new business idea or building a full-fledged marketing funnel in Balloonary is to attract visitors to your landing page and to measure the engagement of the visitors with the value proposition of your product. If the visitors sign up they show a certain level of interest and they allow you to keep in touch with them for example via email once your product or service is ready for production.
So what Balloonary measures is the number of visitors that come to your landing page and the number of visitors that actually signup.
Once visitors have signed up we can call them Leads. Don't underestimate the level of commitment of a visitor leaving you his email address for free. Treat it with respect and don't use the email addresses for spamming. You have a high chance to turn a lead into an actually customer.
Measuring this conversion rate is the first indication towards validating if your idea can be turned into a business or not. It is the ratio between the page visitors and the visitors who actually sign up/commit.
Conversion Rate (%) = number of signups / number of visitors * 100
For example, if you had 50 conversions from 1000 visitors, your conversion rate would be 5%, since 50 ÷ 1000 = 5%.
What is a good conversion rate?
This is actually a tough question, which cannot be answered in just a couple of words. There is no "one size fits all" answer to it. Every business is different.
Some websites with lower-than-average signup conversion rates have good reasons for why their target customers behave as they do. Other may not have taken the time to test their signup page with multiple Balloonary iteration tests and have lots of “low-hanging fruit” optimizations that they miss.