What is a Website Conversion, and How do I Calculate My Conversion Rate?

You want to know whether your marketing is actually working, and you’re not alone. Measuring the return on investment remains one of the top challenges marketers face today. They need a little something that’s not exactly a magic bullet but can go a long way towards proving ROI: conversion tracking.

It’s tempting to look at the so-called ‘vanity metrics’ of your digital efforts. The total number of visitors to your website sounds good, as does the number of likes on your social media pages. But in reality, while they can tell you something about basic brand awareness, they can’t actually measure your success in getting your users interested enough to take action. That’s where conversions come in.

Interested in learning more? You’ve come to the right place. In this post, we’ll explore the basic nature of a conversion, the types of conversions that can help you prove out your ROI, and how to calculate your conversion rate as part of your reporting. Let’s dive in.

Just The Basics: What Exactly Is A Conversion?

The basic definition of a conversion is actually simple:

A conversion is a desired action your target audience takes.

In most cases, that ‘desired action’ is a step that gets them closer to actually generating revenue for your business. Simply liking a post on Facebook or visiting your website is not enough. But visiting your pricing page or subscribing to your blog? Now we’re talking.

One important note: conversions are almost always tracked on your website. In other words, the desired action should be a step they take on your website, which you can track and connect back to the marketing channel that led them to your website, to begin with. That’s how you can attach conversions to actual marketing strategies and success.

4 Types Of Conversions You Can Track

As important as the above basic definition is, it’s still relatively abstract. To truly leverage conversions in your reporting and analytics, you need to define them more specifically.

Theoretically, the number of potential conversions you can track is infinite; you decide what, exactly, desired action actually means. That said, most businesses tend to track one or (ideally) more of the below conversion types as true indicators of a potential customer moving down the funnel towards the sale.

1. New customers. The most obvious type of conversion is one that actually generates revenue. You push out a message, and that message gets a member of your target audience to buy something from your online store. There’s your customer conversion.
2. New leads. One step removed from new customers is the ability to get a new contact into your database. If you subscribe to the inbound marketing philosophy, you should be familiar with the importance of organic leads that seek you out and give you their contact information because of the value you provide. New leads are actually the most common type of conversion in marketing.
3. Direct outreach. Chances are your website has direct contact information, such as a contact form, phone number, or email. Many businesses treat the click on any of these contact options as a conversion, though it counts for less than a lead or customer.
4. Visits to a key page. Visits to your homepage probably don’t count. But if someone clicks on your ad or Google search result and then navigates to your pricing or demo page, there is some interest you’ll want to capture. Set up correctly, you can treat visits to a key page relevant to your sales funnel as a conversion.

How To Calculate Your Conversion Rate In 4 Easy Steps

You know what conversions are. But the truth is that an individual conversion actually matters little in the grand scheme of things. What you want to track is your conversion rate, or the number of web visitors who take that desired action you define. If you can tie each web visitor back to your marketing tactics, you can measure conversion rates by channel and get a better idea of their individual ROI.

That sounds complicated. Fortunately, it doesn’t have to be. You can calculate your conversion rate in 4 simple steps:

1. Define the Conversion. Which of the above conversion types can you and do you want to track? Make sure you know the exact answer before moving forward with your calculations.
2. Measure Your Total Audience. In other words, exactly how many web visitors are you getting, either in total or as a result of a specific marketing effort? Tools like Google Analytics make tracking this step easy.
3. Track Your Conversions. This gets a little more complex. Depending on your tactics, you can track conversions through Google Analytics Goals or directly on the social media platform. More on that below.
4. Divide Total Audience by Conversions. Finally, the actual calculation. Divide your total conversions by your total audience, multiply the result by 100, and you have your conversion rate.

In short, the typical conversion rate formula is (Total Conversions / Total Audience) * 100. If, for instance, you have 10 conversions from a total of 10,000 web visitors, your conversion rate is (10/10,000)*100 = 1%.

What, Exactly, Is A Good Conversion Rate?

Tracking your conversion rate only matters if you also have a benchmark to compare it against. Is that 1% in the example above actually good? Does it show positive or negative ROI? 

Most benchmarks you’ll find are new lead conversions, since (as mentioned above) it’s the most common. A classic study found the average conversion rate across industries to be 2.35%, but numbers diverge greatly once you break it down further.

This conversion rate benchmark table can help you find averages for Google Ads, which range anywhere from 2.77% to 7.96%. Listing all industries and marketing channels would be too much for this post, but simply performing an online search for average conversion rate for [your industry] can help you find plenty of relevant (and credible) results.

How To Set Up Conversions (And How To Get Help)

Time for the final note: all of the above sounds great, but how do you actually set up your conversions? That’s a complex question.

In Facebook and LinkedIn ads, for instance, you can place a pixel on your conversion pages (like your pricing page or your thank you page for gated content) that reports back into the ad platform. More comprehensively, Google Analytics Goal tracking allows you to set up multiple custom conversions, from customer purchases to contact clicks.

But, if you follow that link above, you’ll notice one thing: it’s complicated. Conversion tracking can be a huge help in determining ROI, but that doesn’t make it easy. Don’t be afraid to ask for help. 

If you work with the right partner, you can set up conversion tracking without having to redevelop your entire website. It can be integrated into your existing site, helping you monitor your digital marketing performance and making tweaks that improve your conversion rates. 

Interested in getting closer to tracking your true marketing ROI? Work with us. Let’s talk about the benefits of conversion tracking and how you can get started.