Let’s say you’re running a social media marketing campaign to promote your newest product. You create your ad design, write great copy, and invest money to get your ad in front of potential customers. But why?
No matter what industry you’re in or which broader business goals you’re working toward, marketing campaigns are all designed to get customers to do something. That “something” is a conversion.
So, what are conversions in marketing, and why should you care? A conversion is an action the customer takes after seeing your marketing campaign to engage further with your brand.
Understanding how conversions work and the techniques that boost them is key to the success of all of your marketing campaigns. Learn the ins and outs of conversions in this guide — welcome to What Are Conversions in Marketing 101!
Understanding conversions in marketing
Before asking yourself, “What are conversions in marketing?” you need to understand calls to action (CTAs). Ads and other marketing messages all have CTAs. You’re calling upon the audience to take some specific action in response to your marketing campaign, and the CTA tells them what that action is.
A conversion occurs when someone takes that action. They click the link in your ad, sign up for your newsletter, or make a purchase — whatever you were trying to get them to do. The more people you can get to interact with your marketing campaign this way, the better.
Remember that conversions in your marketing campaigns are what you define them to be. Getting a lot of people to click on a link doesn’t necessarily mean you got lots of conversions if your CTA called for them to fill out a form on your website. Carefully tailor your CTA to the action you want customers to take and analyze your conversion marketing stats accordingly.
Types of conversions
Your conversions can come in different forms and from many sources. Here are some of the most common types you may target in your campaigns:
- Website conversions: When customers take specific actions on your website, such as signing up for your newsletter or downloading a free ebook.
- Sales conversions: When customers go from viewing your marketing materials to making a purchase. This could mean buying something from your website, in person, or over the phone.
- Email marketing conversions: Typically, email marketing conversions involve actions like clicking an included link, making a purchase, or completing a form to move along the email marketing funnel.
- Social media conversions: When you run social media marketing campaigns, you may focus on getting conversions like visiting your website, reposting your content, or adding a product to the cart.
The more conversions you get, the better your chances of growing your sales and strengthening your brand overall.
Real-world examples of conversions
You get to tailor your conversion goal to whatever you want. If your campaign aims to build more brand awareness, you might focus on a simple conversion like getting customers to click on a link to your website or follow your social media pages. Other common examples of marketing conversions include:
- Purchasing a product
- Signing up for a newsletter
- Downloading a resource
- Booking a consultation
Whatever conversion you’re targeting, make sure your campaign is geared toward that objective. The call to action should tell people viewing your marketing materials what specific step you want them to take next. That’s the conversion. If the rest of your ad or marketing message is strong, that should convince a significant portion of the audience to complete the conversion.
Conversion rates explained
So, now that you know the answer to “what are conversions in marketing?” it’s worth discussing conversion rates — a related but slightly different metric.
What is a conversion rate?
The conversion rate on a marketing campaign measures the percentage of the audience that completed a conversion.
While the number of conversions tells you how many people interacted with your marketing message and how many new leads you have, your conversion rate is an even better metric for evaluating the impact of your campaign. A higher conversion rate means a bigger portion of the people who saw your ad or message responded to it with the action you desired.
How to calculate conversion rates
To calculate your conversion rate on a campaign, use this formula:
- Conversion rate = Number of conversions / total audience size
How you measure your audience size will depend on the marketing channel you’re using. With email marketing, your audience size is the number of people who subscribe to your messages. With digital ads like social media or search ad campaigns, you would typically measure your audience size with impressions: the number of times your content is shown to users.
For example, say you run an email campaign to your 5,000 subscribers and get 100 conversions. Divide conversions (100) by audience size (5,000) to get 0.02. Convert that decimal to a percentage, and this campaign would have a 2% conversion rate. So, 2% of the people who saw the marketing email decided to take the specified action.
Benchmark conversion rates by industry
Conversion rates are highly dependent on the industry you’re in. Certain industries tend to have higher or lower rates, and that’s okay. Don’t make the mistake of comparing your rates to those of a company in another industry, because it’s really apples to oranges.
For example, say you’re running an email marketing campaign and define each click as a conversion. These are current click rates for email marketing across industries:
- Dining and food services: 0.7%
- Technology services: 1.85%
- Personal care services: 0.48%
- Administrative and business support services: 2.1%
- Financial services: 1.91%
The average click rate for all industries is about 1.36%, but many industry-specific averages are either much higher or much lower than that figure. Use average conversion rates from your industry as a benchmark when evaluating your own campaigns.
What is a “good” conversion rate?
Marketers want to shoot for good metrics on their campaigns, but defining “good” can be challenging. Beyond industry-specific factors, you also have to consider factors related to marketing channels and your business size.
Variance across different marketing channels
Your conversion rate may vary from campaign to campaign, and there are different benchmarks depending on the marketing channel you’re using. Consider these averages:
Realistic expectations for SMBs
Part of What Are Conversions in Marketing 101 is setting realistic goals for your business. You’ll learn from experience and fine-tune your marketing campaigns as you go, so don’t be discouraged if your first few conversion rates aren’t hitting the benchmarks for your industry or your chosen channel. Analyze your results, figure out what works and what doesn’t, tweak your campaigns accordingly, and then continually strive for higher conversion rates in the future.
Top strategies for conversion optimization
You want to maximize your conversion rate for each campaign, but it’s often tricky to figure out what’s working and what’s holding you back. Try these strategies to improve your conversions on your next marketing campaign.
A/B testing
A/B testing is when you create two similar versions of an ad or other marketing message. You only change one thing between the two versions — the element you’re testing. Then, you send these two versions out to test audiences to see which one gets the better conversion rate.
You can keep testing different elements of your campaigns with A/B testing to work toward the version that audiences respond to best. Try adjusting elements such as:
- The wording of your CTA
- The design and placement of your CTA button
- The heading and subheading text
- The graphics or images you include
- The layout and design of your landing page (if applicable)
- The number of fields you include in a sign-up form (if applicable)
Improve website user experience
A better website user experience means visitors are more likely to stick around, engage with your content, and complete conversions. So, do everything in your power to make your website appealing and easy to use. Try simplifying your design, using descriptive labels, and prioritizing page load speed.
Create compelling calls-to-action (CTAs)
For the highest conversion rates, your CTAs should be intriguing and nearly irresistible to the audience. Focus on using appealing action verbs and including incentives whenever possible, like a special offer.
Personalization techniques
Personalized marketing campaigns speak to the customer’s specific needs or goals, so they can often drive higher conversion rates. Try personalization techniques like addressing each audience member by name, showing them ads for products related to their interests, or segmenting your email list by location.
Landing page optimization
Getting users to click a link is the first step in many conversions, but you often also need them to take action once they reach the landing page. Optimize your landing page for maximum conversions by making the design as user-friendly and appealing as possible.
Build trust through social proof
Social proof in conversion marketing means convincing potential customers to take action by showing feedback from existing customers. Share customer testimonials or reviews in your marketing campaigns to make them more persuasive, leading to higher conversions.
Mobile optimization
About 60% of all global web traffic now comes from mobile devices. Make sure you’re optimizing your emails, landing pages, and all other marketing materials for mobile so you don’t miss out on a large percentage of your potential customers.
Key conversion metrics to track
The next lesson in What Are Conversions in Marketing 101? How to dig into all of your metrics. Beyond the number of conversions and the conversion rate on each campaign, you need to track multiple key performance indicators (KPIs) to better understand why customers are or aren’t taking action. Try these crucial statistics.
Click-through rate (CTR)
The click-through rate measures the percentage of people who click on your ad or a link it contains. Since customers often have to click on a link to complete a conversion — and visiting your website may be a conversion in and of itself — the CTR tells you a lot about how well your campaign is connecting with the audience.
Look at your CTR and conversion rate together. If they’re both high, that’s great! But if your CTR is high but your conversion rate is low, that’s a sign that your landing page needs some work.
Based on this data, your ad or marketing message was convincing enough to get a lot of people to click on the link. It’s the landing page that’s stopping them from taking the next step to complete the conversion. Update your landing page design or messaging to see if the new version leads to a higher conversion rate.
Bounce rate
Website bounce rate measures the percentage of your website visitors who click away without interacting with the content or other pages. A higher bounce rate means your landing pages aren’t quite managing to engage visitors or provide what they’re looking for. Try A/B testing different design options, improving your page load speed, and making the page easier to navigate to reduce your bounce rate.
Conversion rate
Remember to track your conversion rate for each campaign. As you make adjustments to your marketing strategies, check whether your conversion rates increase or decrease to gauge how effective they are.
Cost per conversion
The cost per conversion compares how much you spent on your campaign to how many conversions you got. A lower cost per conversion means your campaign is more optimized and likely offers a better return on investment.
Customer acquisition cost
A similar metric is customer acquisition cost, which measures how much you spend on marketing for each new customer you get. You divide your marketing expenses by the number of new customers you acquired over a set period. If you spent $20,000 in marketing this year and got 2,000 new customers, your average customer acquisition cost is $10.
Lifetime value of a customer
Customer lifetime value (CLV) predicts how much revenue a customer will generate for your company over their entire relationship with your brand. Using CLV, you can adjust your marketing campaigns and budget since you have an estimate of how much each new customer is worth to your business.
Tools and techniques for tracking conversions
Take all you’ve learned in What Are Conversions in Marketing 101 to the next level with powerful tools! The marketing and tracking platforms you use make all the difference. Try these tools to boost your next conversion marketing campaign:
Google Analytics
Google Analytics is a free tool from Google that helps you track your website data to understand how visitors are finding and interacting with your site.
Conversion tracking pixels
You can also add conversion tracking pixels to your email campaigns or website. These pieces of code track the actions of viewers who see or interact with your ads so you can get a better idea of whether they complete a conversion.
Customer relationship management (CRM) systems
A CRM system helps you track customer data and interactions. In these systems, you can view where customers are in the customer journey and tailor your marketing efforts accordingly.
Email marketing platform analytics
Email tracking software and analytics help you dive deeper into your campaigns to see metrics like bounce rate, open rate, click-through rate, and even conversion rate.
Better conversion rate today, better sales tomorrow
Unlocking better conversion rates from your campaigns is essential to getting more out of your marketing efforts. With this guide, you don’t have to waste hours spinning your wheels and asking yourself, “What are conversions in marketing?” over and over! Remember to always keep learning and adapting your techniques since marketing, especially digital marketing, is constantly evolving.
To start, try some simple conversion rate optimization techniques, such as A/B testing and revamping your landing pages. And don’t forget to implement useful software to help you, like Constant Contact. With Constant Contact’s email marketing software, you can track and optimize all your email campaigns for better conversion rates. Sign up for your free trial today!
