CTR (Click-Through Rates) identifies conversion of your keywords. High CTR means high conversion. Increase it? Use proper keyword targeting. Research and use keywords that searchers are most likely to click on based on what they were searching for. For example, if I were planning to purchase a house by the beach, the term "buy a beach house" would have a higher chance of me clicking on than "beach house" alone. Also, high CTR influences SERPs ranking.
This is what I read on Google.com - "(CTR) The number of times an ad is clicked on, divided by the number of impressions it receives. For example, if an ad is shown 20 times and receives 3 clicks, the clickthrough rate is 3/20, or 15%."
Improving the CTR usually comes down to better keyword targeting and more appealing titles & meta descriptions. If the keyword you are targeting is not relevant enough, it is only natural that the CTR would suffer. The same goes for when your title and/or meta description is too generic and too similar to competitors. Your actual ranking definitely affects the CTR too. A #1 ranked site should have a much higher CTR than those ranked lower. Those are just the basic factors though. There are many other things that could hurt or improve your CTR. For example, a spammy url or domain name should limit the CTR. A spelling mistake or grammar error in the title or meta description could do the same. Or sometimes you are up against a competitor that is just so well optimized that they don't leave much clicks for other sites.