Blog Post #2: Conversions

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 Conversion

Another category of web metrics for businesses is conversions. Conversions are defined as actions that a customer can take on a website that is determined as valuable. Some popular conversions that businesses take note of are:

  • User Purchase

  • Account Sign-Ups

  • Form Submission

  • App Install 

And many more!


Each website has to understand what actions they want a customer to take to increase sales, exposure, brand awareness or another business objective and create conversions that lend to that goal. For example, Hi-Way 3 Hardware is a local family-owned hardware store business that doesn’t do any eCommerce business. Although other similar competitors like Lowe’s or Home Depot would likely measure Purchase and Add to Cart conversions, Hi-Way 3 Hardware finds the most value in Click to Call conversions, where customers call in and ask for specific items they're interested in. It’s important for each business to define what valuable conversions are for their current marketing objectives and campaigns. Conversions are also a consideration of the larger marketing funnel and can represent some sort of action taken by the consumer, which is typically noted as the “bottom of the funnel”, or most engaged and ready-to-buy customers. This graphic from Amber Creative helps to show this: 


Improving Your Digital Marketing Efforts with a Sales Funnel

Amber Creative, 2019


Setting up conversions can be simple and done using Google’s host of tools, as well as other website analytics programs. Tag code must be added to a website to be able to track a conversion action. Again, customers or visitors must give access to cookie tracking to be able to accurately understand the correct number of conversions for any given action. 


Conversion rates 


Conversion rates are a very typical website metric in the conversion category. Conversion rates are a calculation, expressed in a percentage, which measures the rate of interaction for a specific conversion action. The formula for this calculation is: 


(conversions / total interactions) * 100 = conversion rate


G

Google Ads and Google Analytics, along with many other website analytics tools use conversion rate as an understanding to determine how successful a conversion is, in comparison to the interactions. There are several different types of conversion rates, including campaign conversion rate, overall website conversion rate, page-level conversion rate, or keyword conversion rate. This metric helps marketers go beyond simple page views or clicks to determine what is driving action for users. 


A low conversion rate could indicate that the ad or page content is not optimized or valuable for a user, whereas a good conversion rate could indicate that the page content or call-to-action is extremely valuable for a user. Depending on the different types of conversion actions, there are varying benchmarks for success metrics. One typical metric benchmark for conversion rate is 2%, though this changes based on the action and system. Privy, an eCommerce tool, shared the following graphic, benchmarking eCommerce conversion rates in different industries (Pickell, 2022)


As you can see, by industry, the average conversion rate changes. When businesses are setting goals, they should utilize tools like this one to be able to understand the average metrics for conversion rates. 


Although conversion rate is not a perfect metric on its own, it can assist in creating a full understanding of website performance and success. 



References: 


Amber Creative. (2019, December 12). Improving Your Digital Marketing Efforts with a Sales Funnel. Retrieved May 30, 2022, from https://ambercreative.sg/blog/improving-your-digital-marketing-efforts-with-a-sales-funnel


Pickell, D. (2022, January 24). Conversion Rate Formula & Tips for Ecommerce Stores. Privy.Com. Retrieved May 30, 2022, from https://www.privy.com/blog/conversion-rate-formula

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