In more detail
If 2,000 visitors arrive from organic search in a month and 40 of them send an enquiry, the organic conversion rate is 2%. Analytics tools such as Google Analytics 4 calculate this once you define which actions count. GA4 calls these "key events"; Google's help centre explains how to set them up.
Conversion rate depends on much more than SEO: the offer, price, page design, speed, trust signals, forms and how well the page matches what the visitor wanted. That last point, matching search intent, is where SEO and conversion meet. Traffic from searches like "emergency plumber near me" usually converts far better than traffic from "how do pipes freeze".
Conversion rate optimisation (CRO) is the related discipline of testing changes to pages and journeys to raise the rate. Some SEO agencies offer it; many don't.
Why it matters when hiring an agency
Conversion tracking is the bridge between SEO activity and business results. Without it, you can't tell whether more traffic means more customers. A good agency will check your tracking in the first month and fix it if needed, before reporting on anything else.
Ask agencies how they'll report organic conversions and how they'll attribute them. Also ask whether their keyword choices favour searches that convert, not just searches with high volume. Small changes in conversion rate have a large effect on return: in our SEO ROI Calculator, doubling the conversion rate doubles the revenue from the same traffic.