A visitor performs a conversion when, for example, he clicks on the “Buy” button or subscribes to a newsletter. The conversion can be freely defined, and the measurement of ‘conversion’ shows whether the goals, or desired actions, on a page are achieved.
- Conversion in online marketing
- Example of a conversion
- Which conversions can be measured?
- What is the benefit of measuring conversions?
- Example of using the conversion rate to make decisions
- Scenario 1: Bringing more visitors to the page
- Scenario 2: Encourage more existing visitors to buy
- Evaluation of the two scenarios
Conversion in online marketing
When we talk about a conversion in online marketing, we are, by definition, talking about an action that transfers the user from one status (e.g. “has not subscribed to the newsletter”) to another status (in this case “has subscribed to the newsletter”). Here you can already see that many different actions that visitors perform on a website can be considered a conversion.
Example of a conversion
Let’s assume, for example, that you run an online shop and want to measure how many users of a certain sub-page use the call-to-action there – to make a purchase, for example, or to subscribe to your newsletter.
To do this, it is important to define in advance the action that you expect from your visitors on this subpage. This is your conversion target. And although it is obvious in an online shop that the user should ideally take the action “buy”, there are other intermediary goals that you would like to achieve and measure within the customer journey.
The conversion in the above example, the purchase of a product or the provision of a service via the website, is the change of the visitor from “interested party” to “buyer/subscriber”.
Which conversions can be measured?
Website operators can define many other conversion goals besides the purchase. For example, clicking a button, watching a video, subscribing to a newsletter or filling out a registration form can count as a conversion.
Every action that can be performed on a website can also be measured as a conversion. The measurement itself is done via the performance tracking system of your choice, for example Google Analytics.
What is the benefit of measuring conversions?
If you measure conversions, you can use this data as a decision-making aid for a variety of questions. For example, you can set up a financial SEO metrics system to monitor your SEO measures.
Furthermore, you can determine the conversion rate by putting the monitored conversion in relation to all visitors to the subpage. A conversion on a subpage that was visited by 10 visitors can thus be output as a ratio of 10% (1 conversion / 10 visitors * 100%).
Example of using the conversion rate to make decisions
Let’s assume I have 1,000 visitors per month on a sub-page designed to sell a product, 37 of whom buy my product. My conversion rate for this subpage is therefore 3.7%.
If I use this value as a baseline, then there are directly two possible strategies to increase my profit. I can either bring more visitors to the page or I can encourage more visitors who are already on the page to buy.
Scenario 1: Bringing more visitors to the page
If I assume that my measured conversion rate is not subject to any strong fluctuation, such as seasonality, the more visitors come to the site, I can open the following calculation:
- 1000 visitors * 3.7% conversion rate = 37 sales
- 2000 visitors * 3.7% conversion rate = 74 sales
- 5000 visitors * 3.7% conversion rate = 185 sales
Scenario 2: Encourage more existing visitors to buy
To generate more sales, however, I don’t necessarily have to get more people to the site. It is also possible to make more out of the existing visitors by turning more of the existing visitors into buyers:
- 1000 visitors * 3.7% conversion rate = 37 sales
- 1000 visitors * 7.4% conversion rate = 74 sales
- 1000 visitors * 18.5% conversion rate = 185 sales
Evaluation of the two scenarios
If I know how much profit each sale brings, I can use it, for example, to directly calculate a budget, how much each measure may cost and/or with which measure a higher return-on-investment can be expected. Of course, the evaluation can also show that a mixture of both measures represents the best result.
Important: Our example is extremely simplified. However, we can use it to show clearly how the measurement of conversions has a direct added value on the evaluation of the possible measures.
In the best case, of course, I manage to attract more visitors to my subpage who are interested in my product, for example via content marketing campaigns, and improve the subpage itself in such a way that I turn more visitors into customers, by investing in conversion optimisation.
In order to be able to evaluate the effectiveness of the measures on one’s own website, one cannot avoid measuring certain goals. With the measurement of certain conversions, the transitions between different levels of the customer journey can be supported with data. This provides reliable data, which in turn can be used to optimise the respective conversion goals.
If you have not yet dealt with the topic of “conversions” and “conversion optimisation”, you do not have to monitor and evaluate every interaction on the website as a conversion. In the beginning, it is sufficient to measure the interactions that are closest to the overall goals of the website. This could be, for example, the sale of a product in a shop or the retention of readers via a newsletter.
As is so often the case, it is important that the data is not simply collected but also used.