07 Aug Tracking Conversions – Closing the Marketing Loop
Conversion is a term thrown around a lot in digital marketing and it is a common element of myriad marketing acronyms and phrases used. As a digital marketer or the owner of a web-based business you may be asked “what is your conversion rate?”, or be told you need to reduce your “CPA”. That all sounds very important, but let’s talk about what it really means, how you can use readily available tools to monitor and improve it, and how it can help your business thrive.
What is a Conversion
In terms of marketing, conversion refers to getting someone to take some desired action, usually triggered by a visit to our website, a listing (such as yelp), or a social media platform. This action can be filling out a contact form, signing up for a newsletter, making a call, a purchase, or anything else that gets the client down the marketing funnel.
It is not uncommon for a business to have different conversion types with different overall values, which in turn determines how much you should be willing to spend to achieve them. For example, a call may have a higher close rate than a form fill. On the other hand, getting someone to sign up for your newsletter or social media page might not lead directly to a sale but one further down the road.
Common Conversion Phrases Defined
Conversion Rate (CR) – The ratio of conversions to visits/impressions. This is determined by dividing the number of conversions by the number of interactions. This can be people who interacted with an ad or visited a page.
Conversion Rate Optimization (CRO) – The practice of modifying a page to convert a higher percentage of visitors to leads and customers.
Cost Per Conversion, often abbreviated as CPC or referred to as CPA (Cost Per Action) is determined by dividing the cost (for example how much you spent on an ad campaign) by the number of conversions during the same period.
Bounce Rate – a metric often associated with conversion optimization. This the ratio of people who visit your landing page and then leave without taking any action. A high bounce rate can be an indicator that you need to look into the page’s conversion optimization.
How to Track Conversions
A big advantage of digital marketing is the ease of access to data and the ability to modify your campaigns based on it. By integrating conversion tracking with your analytics and ad platforms you can get instant access to the most important metrics almost instantly. But where to start?
First, you have to determine what conversions to track and what can be used to trigger a goal. You will need to define goals in Google analytics in order to access your conversion data. For most web interactions this is fairly easy, for example, if a form or online purchase has a confirmation page you can add a visit to that page as a goal. Other interactions, such as phone calls and button clicks can also be tracked by integrating events in Google Analytics using Google Tag Manager.
Determine Your Target Cost Per Conversion
You need a realistic but profitable goal to evaluate if your ads are cost-effective. This involves assessing your gross profit per sale and how much of your overall costs should be for marketing. You can learn more about determining your return on investment, here.
Once you have your goals confirmed and a target cost per acquisition plan on reviewing it at a regular interval. It does take time to get enough data to make an accurate assessment.
Using Analytics to Improve Your Conversions
Now that you have defined your conversion types, have them integrated with your analytics, and can see the leads and other actions in your CRM it’s time to take advantage of all that cool data. A good place to start is with lead scoring. Review your leads and assign them a number, many CRMS have this built-in, but you may need to tweak the criteria and have a plan for nurturing the lead. Can you send them an autoresponse to let them know you got their query and will be following up? Adding them to a remarketing list allows you to target high value leads with display ads and emails to keep their interest up and improve the chances of a sale at a later date.
You can also evaluate platforms, keywords, and calls to action to see which are the most effective at turning visits into sales. Digital marketing is a competitive environment so a weekly review of all channels and their performance is a good best practice.
You may see your cost rise as new competitors bid for the same audience, the danger is to overreact and get in a bidding war that drives up your CPA. Base your bids, channels, and messages on what is effective at generating leads within your target cost-per-conversion.
The logical next step is to keep on eye on activity and optimize your marketing funnel for the best and most cost-effective activity. This article goes into more detail about on-page conversion rate optimization.