You can’t prove that your marketing efforts are successful without measuring the right metrics. Although there are thousands of metrics you can track, conversions are arguably the most important. The ability to measure conversions is a fundamental part of digital marketing that determines if a business is achieving its goals. Every organization has goals specific to them but there are several conversion metrics that are nearly universal in their importance.
What are Conversions in Digital Marketing?
Put simply, a conversion is any time a user you’re marketing to takes the desired action. The percentage of visitors who convert is called conversion rate. Increasing conversion rate generates revenue by converting visitors into paying customers.
Conversions vary from business to business, depending on the enterprise’s goals. They can be anything you want your visitors to do. While some conversions are purchase-related, others are geared towards pushing the prospect further into the funnel.
Examples of conversions include;
- Filling out a form
- Making a purchase
- Signing up for a newsletter
- Reaching a certain point in the content
- Downloading a resource; eBook, whitepaper
- Attending a webinar
- Visiting a specific webpage
Conversion Metrics Brands Should be Measuring
Brands and businesses can track almost anything as a conversion, however, a few carry more weight than others.
1. Lead Inquiries
A lead inquiry can be anything that demonstrates a visitors interest in your products or services. This can come as a form submission, phone call, pricing request, or contact form submission.
2. Click-Through Rate (CTR)
Whether you’re running paid ads or thriving solely on organic traffic, the CTR of your content plays a key role in driving revenue. CTR is calculated by diving the number of actual clicks on your ad or SERP listing by the number of impressions. CTR is a great barometer for gauging how well your ad copy, headlines, title tags, and meta descriptions are performing.
3. Sales & Revenue
If users can purchase products on your site or perform any type of transaction then measuring sales is a must. Tracking sales by source, channel, and campaign allows you to adjust marketing efforts to the most profitable channels quickly.
4 Cost Per Acquisition (CPA)
CPA is the expense you incur to acquire a new customer. You calculate the cost per acquisition by dividing the total marketing costs by the number of customers acquired.
CPA allows you to gain insights into the profitability of your marketing and business as a whole. If your CPA is higher than the revenue the new customers bring in, then you may be in a path to loss. However, if new customers are bringing in more than the cost of acquiring them, then you are on a profitability path.
5. Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) allows marketers to determine if they will get the money they spend on advertising back. It shows the most and least financially effective advertising campaigns so that you can adjust your marketing budget accordingly.
A positive ROAS means that you’re making more in revenue or conversion value that you’re spending (e.g. for every $1 spent on ad spend you make >$2). A negative ROAS indicates a marketing channel that is need of attention or having its budget shifted elsewhere. You calculate ROAS using the formula; (Revenue-Cost)/Cost.
6. Time on Site
Time on site can be a misleading metric sometimes. If your content is designed to quickly funnel users through a conversion funnel or directly solve their problem on a single page a user’s time on site could be quite low. Time on site is often referred to as average session duration and measures how long visitors spending on your site per visit.
7. Interactions Per Visit
Interactions per visit measures engagement actions users are taking within your site. Even if visitors are not converting, they’re taking steps towards it with product views, add to carts, link clicks, and more. Measuring these interactions allows you to better understand user behavior and how to improve site conversion.
8. Value Per Visit
Value per visit is a calculation of the monetary value you’re getting from your overall site traffic. It’s tied directly to the previous metric, interactions per visit. It’s calculated by taking the number of total visits and dividing it by the total value created. If your site is eCommerce focused this is a little easier to track, however, if your site is primarily focused on lead gen you’ll need to have a monetary value assigned to each goal within Google Analytics.
9. Conversion Rate
Conversion rate is the percentage of visitors that make a defined conversion action on your site. This is a top-level metric that tells you how well your site is transitioning visitors to leads or customers. The overall average conversion rate is around 2%, however, depending on your industry conversion rate averages could be as low as <1% or as high as 10%.
Start Tracking Conversions That Matter to You
If you’re using Google Analytics the platform cannot retroactively measure conversions after you’ve defined them. Once you’ve decided on what’s important to your organization it’s important to start tracking these metrics as soon as possible.