Marketers are constantly talking about conversions – customer conversions, conversion rates, cost per conversion, conversion rate optimization – but what does this mean?
If the term conversion is going right over your head, we’ve got the answers for you.
According to the Oxford English Dictionary, the word “conversion” is defined as “the process of changing or causing something to change from one form to another”. Many people are probably familiar with this term as it relates to religious conversion or two-point conversions in football.
This is not the marketing definition of conversion, but it’s helpful to see how one translates to the other.
A conversion in marketing is when a visitor to your website completes a desired goal. In this way, they convert from visitors to leads or, if they purchase something, to customers. A conversion occurs when someone changes from a passive visitor to an active, interested visitor or customer.
Conversion Meaning in Marketing
As we’ve stated, conversions are essentially goal completions. The word “conversion” can be applied to any action that a user takes on your website that is valuable in some way. Since there are a wide array of actions that can be taken that may be valuable, conversions can be many things.
The ideal conversion is conversion into a customer, which occurs someone makes a purchase. Other conversions are valuable as well, however, and many smaller conversions are steps that can guide visitors to eventually convert into customers.
Conversions are also sometimes referred to as actions, events, goal completions, or leads.
What Is a Conversion?
So what exactly are conversions? Depending on your business, there are various possible conversions. The main conversions that marketers often refer to include:
- Email signups
- Form completions
- Visits to a key page
- Phone calls (or other direct contact)
Not all of these conversions will apply to all businesses, and there may be other conversions your business can track. Anything that indicates customer interest or takes them a step closer in the buying cycle may be a conversion.
Why Do Conversions Matter?
Conversions matter because they make your business profitable. The ultimate conversion is a sale, but other conversions are valuable as well if they help you find leads and nurture them into paying customers. Even if you did not know it, or if you still do not fully understand conversions, they are valuable nonetheless.
The real question should be why tracking conversions matters. Tracking sales conversions is obviously important to know whether or not your business is profitable, but lesser conversions are helpful to track as well.
By tracking conversions, you can understand what interests your customers, what marketing tactics work, and where your marketing may fall short if users fail to convert. Tracking this information can help you adjust your website, marketing, and sales tactics to improve profitability.
Digital marketers work to improve websites to increase conversions. Here are a few conversion key terms:
Conversion Rate: The percentage of visitors who convert after viewing an offer.
Conversion Rate Optimization (CRO): Optimizing your website to get more customers to convert.
Cost per Conversion: An advertising metric that measures the cost of advertising per the number of resulting conversions from that ad. Cost per conversion attempts to measure how much you spent to get each conversion, but can be harder to track because there may be different levels of conversion at different stages of the buying cycle.
Marketing companies track conversions and measure conversion rates to track how a website performs. They use CRO tactics to test and improve the website by changing the copy, images, layout, and more. If the CPC of an ad is too high, then the advertisement probably isn’t worth running and should be improved upon or scrapped.
Conversions and the data analyzing conversions are all used to better market your company or website to improve the bottom line.