What’s A Website Conversion & How Do I Calculate My Conversion Rate?
Proving ROI might as well be the holy grail of digital marketing. In this post, you’ll learn the basics of digital conversion types, and how to calculate your conversion rate.
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Proving ROI might as well be the holy grail of digital marketing. In this post, you’ll learn the basics of digital conversion types, and how to calculate your 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.
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.
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.
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:
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%.
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 the average conversion rate for [your industry] can help you find plenty of relevant (and credible) results.
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.
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