Let’s say you’ve just wrapped up a marketing campaign that didn’t produce the results you wanted. In response, you take a different approach, but that, too, flounders. Instead of randomly trying another style, let conversion tracking show you your strengths and weaknesses.
Through conversion tracking, you can determine how strongly, if at all, your advertising campaigns are leading to your desired goals and then keep this information in mind for future efforts.
Conversion tracking is the monitoring of conversions, consumer actions that move your company closer to fulfilling a preset goal. These actions can include a customer buying an item, adding something to their cart, opening your emails, clicking links on landing pages and more. The tracked metrics indicate how well your company’s marketing efforts, whether email marketing or social media advertising, are achieving the desired outcome with your target audience.
Conversion tracking works by putting numbers to your marketing campaigns’ results. Through conversion tracking, you’ll learn how many people in your audience are contacting your company, subscribing to your mailing list or buying your products. Conversion tracking is most commonly used in advertising and email marketing campaigns, though you can apply it to any campaign involving clickable links that direct your audience toward a desired end goal.
A conversion occurs when a member of your target audience takes the action you have aimed for with your current marketing or advertising efforts. According to this definition, a conversion isn’t always a sale; it can be as simple as a click on an ad, well before the person clicking decides to actually purchase what they’ve chosen to explore.
Here are some reasons to track conversions:
Track conversions to maximize your ROI, shape your budget, find improvement areas and separate clicks from conversions.
For a full sense of how well your marketing and advertising campaigns are converting, track these key performance indicators (KPIs):
The most important conversion KPIs are the number of conversions, conversion rate, bounce rate, session duration, pages per visit, events and cost per acquisition.
To maximize your ROI, it’s important not to conflate the number of conversions and the conversion rate. It’s also crucial to realize that a marketing campaign can have several conversion rates, which are usually easy to calculate.
For example, if your primary conversion of concern is a user clicking a certain link, your conversion rate is the number of clicks on that link divided by the number of people presented with the link. If you want to determine the conversion rate of the main call-to-action link in your newsletter, divide the number of clicks by the number of people who opened the email.
Likewise, you can calculate conversion rates for cart additions, purchases or virtually any other metric. Your conversion rate for cart additions would be the number of people who add an item to a cart divided by the number of people who view the product listing on your website. Your conversion rate for purchases could be the number of people who buy the items in their carts versus the total number of people who add items to carts, or it could be the number of purchases divided by the number of product listing visits.
No matter which KPI you’re using, you can retarget people who have come close to your conversion goal but haven’t quite gotten there. Abandoned-shopping-cart emails are perhaps the best example. Send an automated email to users who have placed items in their cart but failed to complete the checkout process. That’s conversion-based retargeting; the email attempts to achieve the desired conversion from cart addition to purchase. After you calculate conversion rates, act to improve them.
Calculate your conversion rate by dividing the action of concern by the total number of people who had the opportunity to take the action.
Often, setting up conversion tracking entails combining two or more advertising and analytics platforms that give you all of the desired information. Perhaps the most commonly used conversion tracking tools are Google Analytics and Google Ads, which you can connect to your marketing efforts for thorough tracking of all desired metrics. You should also keep the following aspects in mind when setting up your conversion tracking:
You can’t encourage more conversions if you don’t know when or why customers convert in the first place. Conversion tracking keeps tabs on customers as they navigate the sales funnel. That way, you can identify the best opportunities to encourage them to take an action you want, such as making a purchase or landing on a certain webpage. Conversion tracking gives your team the best insight into how to drive conversions, thereby boosting the return on your marketing and sales budget while providing a superior customer experience.
Jacob Bierer-Nielsen contributed to this article.