Conversions are actions that prospective clients take on your website that can be tracked and that you can attach a dollar value to. Making a purchase online is an obvious conversion. Filling out a ‘request a quote’ form can be a conversion. Tapping the phone number to initiate a call can be a conversion. Submitting a general inquiry form can be a conversion.
Here’s an example. Suppose that, on average, when someone calls into your business you can close a deal on 20% of those calls and that the average sale was somewhere between $100 – $200. That means that theoretically, for every 5 calls 1 will result in a sale of that amount. Now suppose that you can track how many people called in by tapping the phone number in your website and you know that 40 people called through the website in a month.
If we apply these numbers we can presume that out of the 40 calls that came in from the website, 8 of those calls resulted in sales of somewhere between $100 – $200, and suddenly you realize that that website is definitely paying for itself, but why be content to stop there?
Why not track conversions for everything that could result in money and then keep an eye on the numbers to see what is making you the most money, what (if anything) is actually costing you money, and then streamline your website to capitalize on what is working? Or even better yet, once you have all your conversions set up, why not put some of your earnings into digital marketing to draw a lot more people to the website and greatly increase your return on investment?
This, in a nutshell, is the power of conversions and why they are so important to digital marketing. Conversions are how to manage the success (or failure) of a digital marketing campaign and when using an analytics platform to track conversions you can calculate ROI.
So much of the success of digital marketing relies on conversions. It is all fine and well increase traffic to your website or have lots of people talking about you on social media, but those things, by themselves, does not help your bottom line, you need to know what sorts of things they are doing on your website and what those things are worth to you.
Here are some examples:
- You can close 20% of phone calls into sales averaging $200. If this stays consistent than each phone call through the website is making you $40. ($200 x 0.2)
- You calculate the average lifetime value of a customer to be $4000 and you figure 1 out of every 30 persons that fills out a contact form becomes a new customer. If that trend holds true then that form is worth $133 ($4000 x (1/30) ) every time someone fills it out.
- You figure that half of those who fill out a ‘request a quote’ form will spend $2000 on average. That form is worth $1000 ($2000 / 2) to you every time it gets filled out.
So as you can see, conversions allow you to attach a dollar value to traceable activities that users can do on your website. With a system like Google Analytics you can set up conversions and then filter how each of those clients found your website to really see how much money your digital marketing campaigns are making.
Here is an example
- Lets say last month you started a social media campaign and got 100 phone calls through the website. How many of these can you attribute to the social media campaign and how many from other sources? If you filter the results by how each of those converted clients got onto your website you might see something that looks like this:
- Facebook link 1 → 24
- Facebook link 2 → 20
- Google Searches → 20
- Twitter link 1 → 18
- Facebook link 3 → 12
- Bing → 4
- Twitter link 2 → 2In this example we can see that 76 out of 100 users that called in last month originally clicked on social media links to get on to your website and so we can attribute those phone calls to your social media and so for phone calls alone your social media campaign made you $3040 (76 calls at $40 per call)
This is only a very brief overview but you can begin to see how conversions can be made to monitor and capitalize on the value of your website and digital marketing efforts. In the hands of the right digital marketing team you could see a large return on investment just from streamlining your website to work well with conversions and from there the sky’s the limit!