Conversions are a crucial metric for assessing your business performance and gaining insights into the entire customer journey, leading to the ultimate goal—purchasing a product or service. But what exactly are conversions, and why is it beneficial to measure them?
What Are Conversions?
A conversion is any action taken by a user that benefits your business: clicking on a text ad, watching a video ad, contacting the company via phone, registering online, making a purchase, and so forth.
There are two types of conversions: micro and macro. What’s the difference? A macro conversion is the ultimate, revenue-generating goal for a business, such as a sale. In contrast, micro conversions are various other actions customers may take while visiting your website, such as providing personal data, subscribing to a newsletter, making a call, or adding products to a cart. Micro conversions are vital indicators that help understand your business performance and reveal the complete customer journey leading to the final result.
Why Measure Conversions?
Conversions are a key metric for evaluating marketing strategy effectiveness. Customer interest in your product or service can be influenced by many factors, so it’s essential to monitor and analyze customer actions to respond promptly and make the best possible decisions. Tracking conversions enables a better understanding of your target audience, showing which strategies are effective and which are not, thereby allowing you to allocate resources more efficiently.
How to Track Conversions?
While you can track numerous data points, not all will accurately reflect your business’s success. Therefore, it’s crucial to identify primary goals, key performance indicators, and appropriate metrics to monitor systematically. This approach allows you to track progress consistently and adjust strategies as needed.
First, define what actions constitute conversions for your business. These could include purchases, form submissions, app downloads, or any other desired action—what’s essential is to set clear conversion goals.
Install or seek expert help to implement reliable conversion-tracking tools such as Google Analytics, Google Tag Manager, and Meta Pixel to accurately track data across channels and devices. To track specific conversions, you first need to create and assign events to desired actions. Events are configured in Google Analytics via Google Tag Manager, while Meta events are managed within Meta Pixel. To ensure social media data integrates well with Google Analytics, it’s advisable to set up universal tracking parameters (UTM), conversion pixels, and tracking codes to attribute conversions to specific campaigns, channels, or sources accurately. This allows for in-depth data analysis and a better understanding of which marketing actions drive results.
Monitor and analyze user behavior at various stages of the customer journey. Understanding where users drop off in the process will enable data-driven optimization decisions. Segment conversion data by demographics, device type, or source to gain comprehensive insights into audience behavior, making it easier to tailor marketing strategies to specific audience segments. Continuously monitor conversion volume, cost, and value to identify trends and make informed decisions.
Conversion Rate
Equally important is tracking the conversion rate, which shows the percentage of website visitors who complete your desired action. This metric indicates the effectiveness of your campaigns and helps optimize your site. Calculating the conversion rate allows you to see how well your site is converting visitors into customers.
To calculate the conversion rate, divide the number of completed actions by the number of users and multiply by 100 %. For instance, if 2,000 visitors come to your site in a given period and 20 of them convert, your conversion rate is (20 / 2000 * 100 %)—1 %. This rate is especially relevant for businesses attracting visitors through paid advertising, making data analysis essential.
A low conversion rate can result from various factors: poorly targeted advertising audiences, an inconvenient website structure or design, product appeal, pricing, seasonality, and more. Consider whether your site is optimized with the correct keywords or if campaigns attract the right audience. Additionally, measuring conversion rates on all key pages where users can convert is beneficial. Knowing this information allows you to make the necessary improvements to increase conversion rates.
Following these guidelines can help you start measuring conversions effectively, analyze data, gain valuable insights, and optimize your strategies. If you have questions or need a marketing team to help you achieve your conversion goals, let’s talk.