"Bounce rate" is an important metric when reading the data from your Google Analytics reports.
Avinaush Kaushik of Google says of Bounce Rate "I love it!.... The sexiest metric ever!" He goes on to describe it as brilliantly dumb and says it tells you about the customer visit simply - "I came, I puked, I left."
Google notes "Bounce rate is the percentage of single-page visits or visits in which the person left your site from the entrance (landing) page. Use this metric to measure visit quality - a high bounce rate generally indicates that site entrance pages aren't relevant to your visitors. The more compelling your landing pages, the more visitors will stay on your site and convert. You can minimize bounce rates by tailoring landing pages to each keyword and ad that you run. Landing pages should provide the information and services that were promised in the ad copy."
What is a good bounce rate then?
Kaushik notes that average bounce rates are 40 - 60%. Under that you are doing well. Over that and you may need to consider why. You must delve deeper into segments of web traffic to understand higher rates - Is paid traffic bouncing high? Why? Are important keywords bouncing high? Is the message clear on my landing page?
If converting traffic into leads through forms or online purchases is important, understanding the whys of higher bounce rate segments will be worth the investigation.
Remember, sometimes simple situations create high bounce rates i.e. A Contact Us page may have a high bounce rate due to the fact that visitors find your phone number there and leave.