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This is where we start to see the rubber meet the road in digital marketing.
A quick review: If you recall, we spent some time brainstorming different Key Performance Indicators (KPIs) in our Strategy phase. These goals were flowed through our Execution exercises and into the actual interface design where we specifically called out conversions on the wireframes. These conversion goals could be email newsletter opt-ins or in the case of ecommerce, a product purchase. The formal definition of a Conversion Rate is:
Outcomes divided by Unique Visitors (Kaushik, 55) NEED SOURCE.
There is some debate on whether you count Users or just Sessions in this calculation. Bear in mind that many people will visit your site and most likely not be in the market at that specific time for what you are selling – be it a product or an email newsletter. This goes back to our discussion around Acquisition, Nurture and Retention and the outcomes we determined are most important for the different parts of the user’s journey.
Starting with Acquisition, our goal (ie. The outcome mentioned in the definition above) might be to get a social opt-in (i.e. a Twitter Follow or Facebook Like) or perhaps an email opt-in (ie. subscription to an email newsletter). Next, we’ll work on the Nurture piece by producing great content and working to stay top of mind. Our goal might be for users to come back to the site a certain amount of times in a given period. Once we’ve established a relationship by nurturing users into ongoing engagement, we can go to work on Retention.
Note: different business models might require vastly different approaches throughout the user journey but the big takeaway here is that we can use analytics goals to track progress and monitor conversion rates accordingly. Every goal (social follow, email opt-in, purchase, etc.) should have an associated conversion rate or number of Users who complete the action.
In the case of an ecommerce site we have a host of factors to consider: the product, the price point, and the mental algebra and approval needed to make a purchase. Given these variables we might need multiple touch points with this User to convert them into a customer. We can set up micro conversion goals to see how our efforts are working over time. For example, are users opening our emails? Are they clicking the links inside? Once they hit the landing pages, are they engaging with the content? Watching a video, downloading a checklist, or staying on the website for a given period of time can all be considered micro-conversion goals.
As you can start to imagine, tracking all these interactions online (and offline) and tying them back to conversions can get fairly messy. Do your best to define what is critical upfront to driving your business forward with online marketing . This filter will provide you with the ability to show results and better understand what needs to happen. Strive not to get overwhelmed with the “what happened” and instead focus on the “why it happened”.
What’s a “Good” Conversion Rate?
As noted throughout this section, standard benchmarks are really hard to define across web properties due to the myriad of variables. However when it comes to Conversion Rates, it tends to average out at around 1%-2% across industries for a website.
So, 98%-99% of people that visit your property are not ready to convert. Cue the Nurturing campaign efforts!
It’s a pretty humbling statistic isn’t it?
As you become more and more comfortable with the dashboard of your web analytics package, you can start to slice data by referring traffic source to see if there are any variations in the conversion rate.
For example, you might find that traffic coming from organic search results, converts at a very high level for a specific keyword phrase, which is usually the case. Or perhaps you start to see that Returning Users convert much better than New Users hinting that maybe the user needs to take some time to research and come back.
Either way, having rich historical data at your fingertips is critical to making informed decisions. If users coming from email campaigns convert at a much higher % than social media, you’ll want to invest your time in email content. Or if traffic coming from organic search results convert better than traffic from paid ads, you may want to consider investing the ad dollars into content marketing.
Setting Up Conversion Goals
Depending on your analytics package there are a couple of ways to start tracking conversion goals. First, you’ll want to start with your KPI’s and look at your Macro and Micro Conversions. We might say an email opt-in is our Macro conversion goal as it converts the user by providing their email (Acquisition) and puts them into a Nurturing (email marketing) campaign.
So, we’d want to see the user directed to a “thank you for subscribing page”. This is a unique URL that is only navigable by completing an email opt-in form (ie. entering your email address into a form field and pressing the “Subscribe” button). By reaching this URL we know for a fact that the user successfully converted by taking an action. This is what Avinash Kaushik calls an outcome but we like the term goal since Google Analytics calls these important metrics “Goals”. Another common term is “Conversion Goals”.
The video below does a nice job explaining how this all works at a high level:
Finally, think of Conversion Rates not unlike the psychology behind making a purchase. Because purchasing a car presents significant investment (and risk) compared to buying a candy bar, more time and emotion will be involved in the purchasing cycle.
The online experience is no different. Giving a Facebook Like requires a completely different level of commitment compared to purchasing an item. There is no accident Amazon invented the One-Click buy button to remove the friction around this experience and take advantage of the impulse buy.
The good news is you can improve Conversion Rates and this is one more reason to start with a user-first approach built around empathy.
This requires you, the digital marketer, to be savvy with analytics and test, test, test.