Conversion
In online marketing, a conversion usually describes the transformation of a prospect into a customer.
Definition: Conversion means "transformation" and is the result of the occurrence of a desired action that has been defined in advance by the company as a goal. In marketing, this can be, for example, the conversion of an online store visit into a purchase, but also the registration for a newsletter, content downloads or a click on a certain button.
Examples of conversions
Classic examples of conversions include a purchase, a download, or signing up for a newsletter. According to the original meaning of the word, conversion is always a conversion process. An interested party becomes a buyer, a buyer a customer, etc.
Basically, all possible actions can be defined as conversions. Conversions that are often used are:
- registration for a demo or test version
- download of offered website content, e.g. brochures, e-books
- registration for e-mail lists, e.g. for a newsletter
- contacting the provider, e.g. via contact forms
- reaction to certain content, e.g. clicking on an advertisement
Background: What you need conversions for
Companies define conversions and corresponding targets in order to evaluate the customer journey and the success of marketing measures. Conversion and the associated conversion rate have become established as KPIs, particularly in e-commerce, search engine marketing and online advertising, for measuring the success of a website or a marketing campaign.
In addition to monitoring the success of a website, conversions are also used by affiliate networks, for example. In the latter case, payments to publishers are based on the conversions defined in the affiliate program.
How are conversions measured?
Conversions can be measured and evaluated using common web analysis tools such as Google Analytics. Many tools can be used to outline the path to a conversion through the customer journey across different platforms and devices.
Conversion tracking mostly takes place through user labelling using a cookie. However, many web groups, including Microsoft, are looking for labelling methods that are more secure.
Types of conversion
Several conversions can be defined for a user journey. A distinction is often made between hard conversions and soft conversions.
Hard conversions are rather classic conversions that are close to the purchase decision for a product or service. The visitor already has a clear intention. Examples include registration for a product demo, making a specific contact inquiry, or placing an order.
Soft conversions, on the other hand, are somewhat less concrete. The visitors show interest in a product or in certain content, but are not yet ready to make a purchase decision. Examples of soft conversions are newsletter sign-ups or downloads of informative content.
Conversion vs. Lead
In online marketing, the terms lead and conversion are often used synonymously. What both have in common is the fact that they convert an interested party into a customer. However, the term "lead" is primarily limited to contacting an interested party who can become a potential customer through this action. After a conversion, a prospective customer has already become a customer. A lead can be a prerequisite for a later conversion, but not vice versa. A conversion is not only limited to establishing contact, but can take place in a variety of ways.
An example: John Doe registers for a newsletter using a contact form. In this case, the company achieved a lead because it received the contact data from Mr. Doe. After the newsletter was sent to Mr Doe for the first time, he clicks on a link in the newsletter and buys a product in the online shop. He then "converted", i.e. triggered a conversion.
Conversion as a KPI
The conversion rate is the measure of the conversion. This can be calculated using a simple formula and is given as a percentage.
Conversion rate = Number of executed actions / ((Number of all visitors)*100)
There is usually no ideal value for the conversion rate as this is highly dependent on the overall performance of a website. All marketing measures that contribute towards increasing the conversion rate are referred to as Conversion Rate Optimization (CRO).
Measuring conversions using Google AdWords and Google Analytics
Anyone who uses the Google Ads advertising program can use it to define their own conversions in order to measure the success of their SEA campaigns. There are different conversion goals to choose from, such as purchase, call or registration. A prerequisite for the measurement of conversions is the implementation of the corresponding tracking code on the landing page. For e-commerce, this is most often the order completion page.
Google Analytics can also be used to define conversions as the so-called “goals”. Goals can be, for example, a certain amount of time spent on the page or even the sending of a particular form. These goals can then be exported to the Google Adwords account and used to measure the conversion of the advertising program. Linking of Ads with the Analytics account is necessary for the export.
Conversions and SEO
If many users reach a product or service they are looking for via organic search, this increases the chance of conversions for the website operator. search engine optimization and conversions are therefore directly related. Websites that rank well organically achieve more traffic and thus have the opportunity to achieve more conversions. Technical SEO optimizations also have a positive effect on conversions. The optimization of pagespeed, usability and onpage content contribute to a better user experience, which makes it more likely that visitors will make a purchase.
Importance for Online Marketing
For webmasters, advertisers and agencies, conversions are scalable parameters when measuring success. This is because, among other things, they enable fair reimbursement of agency services based on success. However, in the case of a conversion that is not directly related to the purchase of a product, site owners should also pay attention to how the conversion took place. This is due to the fact that actions such as downloads and newsletter subscriptions can, in extreme cases, result from automated bots aimed at manipulating the conversions. A crosscheck via the customer journey or sources that led to the conversion is, therefore, always appropriate. Therefore, with this analysis, the entire conversion funnel will be considered, and not just the conversion itself. A conversion funnel includes all relevant steps that are necessary for the conversion.
The chance of a conversion can be raised significantly if the user is able to access the sought product much faster. Therefore, with search engine optimization, you should always be careful to ensure that your website has short loading times, a sensible navigation as well as high-quality content.