What are Conversion Metrics?
Conversion metrics are key performance indicators to measure whether or not your marketing efforts are converting. On the contrary, a conversion is not having someone download an e-book or whitepaper, nor is it having them subscribe to a mailing list or even starting a shopping cart.
Conversion is defined as converting a potential buyer into a paying customer. Therefore, anything other than that, while it may be a good step, is simply not good enough.
Revenue is the lifeblood of a company. It doesn’t matter how many customers or subscribers you have. If you don’t have enough revenue, your company closes down.
There is an incredible number of conversion metrics you could track, each of which has some effect on the overall health of your business.
So, how can you make the most out of your time and track the metrics with the greatest impact on revenue?
Top 8 Conversion Metrics to Track
- Traffic Sources
- New Visitor Conversion Rate
- Return Visitor Conversion Rate
- Interactions per visit
- Value per visit
- Cost per conversion
- Average order value
- Lifetime value
Let’s go into each of these in detail.
Conversion Metrics #1: Traffic Sources
Traffic itself, surprisingly, isn’t first. It’s not even in the top ten most important conversion metrics. You could have all the traffic in the world, but it doesn’t necessarily help you with customer conversion.
Instead, the more important traffic information is where your users are coming from. Knowing where they are coming from can help you to optimize your page for the sources that are bringing in the most traffic.
Additionally, you want traffic that is more diversified to avoid volatility. For example, what if all your traffic was from search engines, and all of a sudden these search engines change their algorithm? You will no longer pull as much traffic from that source.
Here are the most common traffic sources:
- Direct. Accessed via Bookmark or directly typing in your URL.
- Social media. This includes media like Facebook, Instagram, Twitter, YouTube, LinkedIn, Pinterest, and others.
- Referral. Anyone who came over to your website through a link on another website.
- Email. Traffic from email campaigns to anyone on the email mailing list.
- Organic Search. People who searched via a search engine and found you in the organic search results.
- Paid search. Visitors received through a PPC advertisement on a search engine.
- Other. Any other method not currently listed.
How to track your traffic sources?
Tracking your traffic sources is rather easy. First, simply go to Google Analytics and follow these steps:
- Once you’ve logged into Google Analytics, you should see this screen. Next, click on Acquisitions from the main menu.
- Next, simply click on the “All Traffic” submenu in the Acquisition section.
- After that, click on “Source/Medium.”
- Finally, scroll down a little on this page to find your traffic sources and all data that Google Analytics shows you concerning those sources.
How to improve traffic from each source?
There are different ways to improve each of these traffic sources. The following are the most common ways you can improve your site’s traffic through each source type.
Direct traffic is considered the highest weighted traffic source. Thus, this type of traffic is well-known for its high conversion ratio. These people are either returning customers or new people who are already somewhat convinced they want to use you.
To get more traffic from this, consider providing incentives for word-of-mouth referrals, running ad campaigns on tv or radio to attract new visitors, or by encouraging loyalty for existing customers through rewards programs.
Each form of social media has the potential to boost your traffic and sales. Many social media platforms allow you to run ad campaigns that boost your visibility to others and drive traffic to your site.
When deciding which ones to start with, consider your ideal customer demographics and do some research as to which platform they are most likely to use. You may also consider researching to learn about the right times and right content to post that will drive people to your site.
Referrals from other websites can be extremely valuable. Not only is this typically in the form of a link (which also helps with search engines), but it also means that they came to your site from a website they already visited.
To get more referrals and backlinks, Neil Patel (an expert on link building and SEO) has an article that may be of use to you. This can help you get more referrals and more traffic overall.
Email campaigns are probably one of the most used forms of advertising to existing customers for their ease of use and lower costs. However, email has its share of problems.
Three main elements would need to be optimized for an effective email campaign:
1. A catchy subject line. Helps with the traditionally low open rates with email.
2. Persuasive email copy. Helps with click-through rates and conversions.
3. An effective call to action. It also helps with click-through rates and conversions.
Tons of articles online will talk about how to get better email responses. So, if Email is what you want to focus on, I would suggest searching for a few of those. In fact, you can start here, with Seynd’s article on email.
Organic searches from a search engine are excellent when trying to attract new clients. Being that these people are actively searching for a way to solve their problems, if you show up in their search you have a high chance of getting their business.
To make sure you are found, you need to perform something called search engine optimization (commonly called SEO). There are many articles and services out there to help with this. A few well-known ones include Neil Patel, Backlinko, and SEMrush.
To get you started on how to optimize your website for search engines, here is another article from Neil Patel to help with this.
Paid searches are typically done in the form of a pay-per-click campaign (PPC). These ad campaigns cause your page to show up in search engines for specific keywords based on how much you are willing to pay per click.
If you decide to go this route, know that people still prefer to click on organic searches than advertisements on a search engine. Still, it could be helpful if you’re finding it very difficult to rank organically for a specific word.
With a PPC campaign though, you will need to find the right keywords that don’t cost an absolute fortune. That way, you can viably maintain a campaign without losing money.
There are plenty of keyword-finding sites, including Google Adwords, Serpstat, BuzzSumo, SEMrush, etc. Make sure to find keywords that are relevant to your product, are as high on searches as possible, and don’t cost as much if you’re going this route.
It should also be noted that, according to an article by Statcounter.com, around 91.89% of every search engine query is done on Google. If you’re going to do either a PPC or SEO, make sure to optimize it for Google specifically.
Conversion Metrics #2: New Visitor Conversion Rate
There are a lot of things that go into getting new visitors. Once they’re on your website, are they converted into paying customers?
While there are a lot of factors that could determine if a new visitor converts, here a few to get you started:
- Bounce rate. These are people who might click on your link but then click away without doing anything else. Bounces can hurt your organic search traffic, so it’s an important factor to look at. It might be that something on your landing page put them off somehow or it could be that your link wasn’t relevant to what they were looking for. For example, what if someone was looking for a conversion calculator to the metric system and found this conversion metrics article? This would probably result in an immediate bounce.
- Lack of persuasive copy. These people could be begging for a product like yours, but they still need to be persuaded. If they get to your page and aren’t convinced they need your product or service, they will likely look elsewhere for a similar product.
- Lack of an effective call to action. The call to action is what causes a person to respond to your website. If the call to action isn’t causing people to respond to your offer, you need to create a more persuasive call to action.
How to track new visitor conversions?
On the home page of Google Analytics, you’ll see “bounce rate” on the top.
Lack of Persuasive Copy or Lack of an Effective Call to Action
From the home page of Google Analytics, click behavior, then behavior flow.
Once there, you can see what a typical visitor does when they visit your site. This will allow you to see where the potential clients drop off and you can most likely tell that either the copy or the call to action on that page isn’t converting probably.
You can also click on insights (top right corner) to get more specific insights.
Following are some tips to improve each element of new visitor conversions:
There are a few ways to reduce bounce rates on your site:
Page Load Times
Let’s say a client is interested in your site, but then it takes forever to load. Most people aren’t patient with slow webpages, so they will likely leave.
This article from Solarwinds Pingdom has a lot of information on how page load times correlate to bounce rates. This infographic shows that, once the load times take longer than three seconds, bounce rate starts to increase by a significant amount:
You can fix page load times in a variety of ways, but the easiest method for page load optimization is to reduce the file sizes of your images. This can be done by resizing the image or image compression.
Photoshop and Corel PaintShop Pro both allow you to compress JPEG images to only 30% of their original size and suffer little to no quality loss, though there are probably others that can do a similar thing.
According to Mandi Perry from Webstrategies.com,
“Proper and professional website design can improve your bounce rate by a lot! One study found that 94% of visitors would reject a website or mistrust a company based on its design-related aspects.
These elements include a busy layout, too much text, and boring design and use of colors. Irrelevant content only accounted for a mere 6% of reasons why a website was rejected due to negative first impressions.”
Consider getting a professional web designer to design your website to decrease your bounce rate and improve the client’s overall experience.
To avoid the 6% of bounces from unrelated content, use contextual clues so that the Google search algorithm will be able to use those to distinguish between two similar topics.
For instance, if someone was searching for a metric converter instead of conversion metrics, make sure to include an actual calculator or converter or include other contextual clues to help make their search more relevant.
Lack of Persuasive Copy
Writing persuasive copy is essential to getting sales and conversions. If you aren’t able to persuade your prospect to buy, they will certainly be persuaded by someone else to buy their product instead.
According to Chanimal.com, the ultimate resource for software marketing,
“There are two approaches to presenting our product—informative and persuasive. After an informative presentation, the prospects say, ‘Thanks for the info… BYE’ as he is heading out the door to continue his research.
After a persuasive presentation, the prospect asks, ‘How much is it,’ which is a buying signal—he has seen enough information–that is presented convincingly–and he is now considering purchasing.”
Chanimal has a great article about the persuasive format and its proven effectiveness in sales.
Lack of an Effective Call to Action
The call to action is the button or sentence that causes the prospect to respond. You could have great copy, but if the prospect doesn’t know exactly what you want them to do about it or why then they won’t be as likely to purchase your product. Seynd recently wrote a great article about how to write a persuasive call to action which is based on both experience and research.
Conversion Metrics #3: Return Visitor Conversion Rate
Returning visitors indicate that you are doing something right. Whether that was getting them to make a purchase or simply revisit your website, something got them interested enough to return.
How to track it?
For this one, you can refer back to your traffic sources page on Google Analytics. On that page, you will be able to see “Total Users” and “New Users.” Simply subtract the new users from the total users and you’ll find the amount of returning visitors.
Total Users – New Users = Returning Users
How to improve it?
A few of the well-known ways to improve the conversion rates of returning visitors are the same as the ones discussed in how to improve direct traffic. These include:
- TV and radio advertisements
- Social media
- Rewards programs
- Email marketing
- Web push notifications.
In sum, the more attractive you can make these ads or promotions, the more likely you are to not only attract returning visitors but also convert them. Returning visitors have already shown interest in your site, so these methods should be enough to re-convert them.
Conversion Metrics #4: Interactions per Visit
You want people to interact with your website. Otherwise, if they never interact with it, you’ll never make any sales.
Generally, the more people react with your website, the more likely they will purchase something.
Think about your typical sales process. You want them to end up on a landing page, you hope they go to the products page, browse, add something to a cart, and checkout.
If you see that people are getting to a certain part of that process and stopping, you can tell something is wrong.
Maybe they got to the products page and everything was too expensive for them or they got to the checkout page and there was some unexpected fee that drove them off?
Either way, this will provide valuable insight that you can then adjust.
How to track interactions per visit?
There are many different tools for tracking how many interactions a prospect performs per visit. Many of the experts recommend Crazy Egg as the best one, but I’m sure there are others out there.
How to improve interactions per visit?
Some of the ways to improve interactions per visit include things already discussed, like persuasive copy and an effective call to action. A few other ways to improve interactions per visit include:
- Creating a designated sales process. A common one is the landing page > products > add to cart > check out. You could also consider adding pages for why to buy, how it compares, testimonials, etc. The main point is that you should create an easy guide for the prospect to move forward, and not just hoping they will get there.
- Make sure that the desired action is very clear. A confused prospect doesn’t buy.
Remember, the more interactions the prospect takes in the right direction, the more likely they are to purchase your product and bring in more money for your company.
Conversion Metrics #5: Value per Visit
Each visit carries a certain value with it. In general, the more visits you bring in, the more money you are likely to make.
How to track the value per visit?
For a simple calculation, you could just calculate:
(total revenue from website sales) / (total number of visitors) = value per visit
However, this might not account for all the people who saw your website and called instead of purchasing online or other ways of purchasing. You might consider having separate phone numbers for your website and any ads on other media forms to help distinguish between website sales and sales from advertising campaigns.
How to improve the value per visit?
You can improve this KPI by following all of the other conversion metrics discussed in this article. Arguably, the best way to improve your value per visit is to ensure all your website traffic comes from the best sources. The other conversion metrics mentioned here will help get more conversions despite your traffic sources.
Conversion Metrics #6: Cost per Conversion
The cost per conversion is the price you pay for one conversion. Depending on your marketing budget, this may focus entirely on converting through your website.
How to track the cost per conversion?
To calculate the cost per conversion, simply do the following equation:
(total marketing budget) / (total number of conversions or sales) = cost per conversion
How to improve the cost per conversion?
To lower the cost per conversion, you want to ensure that your marketing initiatives are effective. In other words, think about which marketing campaigns are yielding the most traffic and conversions.
Is it social media? Tv or radio? Email?
Here are some ways you can start improving your cost per conversion:
- Focus on SEO. SEO is a completely free way to get more traffic to your site, and therefore more conversions.
- Find your target market. If you have found the ideal type of customer who would buy your product, consider the kind of media your ideal customer uses and create your campaigns specifically for those mediums. If, for example, your target market includes millennials, you might consider focusing on social media and TV ads for shows they might watch.
- Do your homework. Each media platform that you spend money on has unique quirks or tools that you will need to slowly perfect to optimize the number of conversions for the price. For this reason, learn as much as possible about your media of choice so you can get the ideal conversion ratio.
- Split testing. In selling, the mantra is ABC (always be selling). In marketing, the mantra is ABT (always be testing). Remember to always be split testing your different marketing campaigns so that you are getting the best result. For more on split testing, read this article.
Conversion Metrics #7: Average Order Value/ROI
The average order value is the average revenue you earn per conversion. Your return on investment (ROI) is the amount of profit you made after investing in marketing campaigns, which is usually presented as a percentage.
ROI that is too low, compared to your cost per conversion, can cause your business to really suffer or even cause business closure.
For example, what if your average cost per conversion was close to $100 but you were only making about $50 per sale? You would be losing $50 for every sale you made and you would soon run out of money if you didn’t either lower the cost per conversion or improve the average order value.
In contrast, what if you were able to lower your cost per conversion to $50 and increase your average order value to $100? You would then be earning more money and, depending on your business overhead, you could be making a good profit!
How to track average order value and ROI?
To calculate the average order value (AOV), use this equation:
(total amount of revenue) / (total number of conversions) = AOV
To calculate ROI, use this:
(Revenue) / (total marketing budget) = ROI
How to improve average order value and ROI?
Improving the average order value is something that every business must learn to do. Some do it very well and others don’t.
Think of a grocery store, for instance. They put a lot of important things, like milk, in the back of the store so that prospects have to go through the aisles to get to it, which increases the likelihood that they will buy more groceries.
Grocery stores also have lots of candy, drinks, and reading material right as you’re waiting for the checkout, usually at the eye level of kids. The kids then see this and beg you for a candy, which, again, increases the likelihood of a higher-order value.
In short, you need to find ways to do something similar for your business. Here are a few ideas to increase average order value:
- A warranty
- Product insurance (mostly for deliveries)
- Add-on products. These could be additional things that make the current product way better or easier to use or it may be something that solves a different problem the prospect might have.
- Including options for bundles at a discount.
- General price increase (effective when you know for sure that you are underpriced compared to competitors)
Find ways that work for you and constantly look for more ways to increase the average order value.
Conversion Metrics #8: Lifetime Value/Churn Rate
If you don’t know how much a single customer is worth over their lifetime, it could seriously be affecting your business. In conjunction with cost per conversion and average order value, the lifetime value determines how profitable your business is.
Let’s say, for example, you have a subscription that is $10/month. It costs you $100 in marketing to get one person to sign up. It sounds like you’d be in trouble, right?
However, let’s say that you know for a fact that the average time a customer stays subscribed to your service is 20 months. So, for each customer you get, you’re making $200 for every $100. That makes your business model work and you can make a profit.
On the other hand, let’s say you use that same service model and a customer only stays for 5 months. Just like with the average order value being too low, you end up losing money per customer you acquire.
One very closely related conversion metric is the churn rate. This is the rate at which people unsubscribe to your services or stop buying your product.
How to track lifetime value and churn rate?
Neil Patel has a great article and infographic on how to calculate the lifetime value of a customer. The simple formula is:
(frequency per year) * (average value per purchase) * (number of years) = average lifetime value
To demonstrate the simple version of the formula, I’ll use a subscription model.
If a subscription were paid monthly at a rate of $10/month and the average customer stayed about 10 years, the equation would play out like this:
(12 times per year) * ($10) * (10 years) = average lifetime value of $1,200 per customer
Churn rate can be calculated by the following:
(number of subscribers lost by the end of the test period) / (number of subscribers you started with at the beginning of the test period)
So, if you lost 10 subscribers at the end of the last test period, but started with 100, your churn rate would be 10 / 100 or 10%.
How to improve lifetime value and churn rate?
The best way to improve the lifetime value of a customer is to make sure your product quality is excellent. However, that doesn’t mean you can’t have other ways to make sure your customers stay and spend more money on your products.
Many of the ways to increase the lifetime value of a customer are listed under the returning customers’ section of this article. Another way to increase this is to find out why some customers are leaving.
This can be done through a survey when they unsubscribe or if they haven’t purchased your product in a while. Even if they don’t come back, you could find out what part of your business they had the most issues with.
Was it the product? Customer service? Price? Once you find out, you can address these concerns.
Conversion metrics are how you run your business. If you aren’t using them, you’re flying blind when it comes to running your business.
As a reminder, the top 8 conversion metrics you should be tracking are:
- Traffic Sources
- New Visitor Conversion Rate
- Return Visitor Conversion Rate
- Interactions per visit
- Value per visit
- Cost per conversion
- Average order value
- Lifetime value
As you learn to track and improve each of these metrics, you will grow more profitable and will have a better understanding of how the customers interact with you and your company.
So, which of these conversion metrics will you improve first?
Web Push Notifications: Improve Your Conversion Metrics!
Hopefully, you now understand how important your conversion metrics are. How are you going to improve them all in a timely manner though?
Luckily, there is a way to improve your conversion metrics instantly, especially your traffic sources, return visitor conversion rate, and your lifetime value!
The way to improving all of these at once is:
Web Push Notifications
With web push notifications powered by Seynd, many of the problems with email or site conversion are solved. This is a new technology that gets users’ attention using alert-style messages whenever they are using their web browser.
Seynd provides a way for you to get a subscriber with only one click. No email address or filling out forms + the benefit of receiving exclusive deals and notifications = low risk and high reward to you and your prospects.
Despite this exciting new technology, many companies still prefer to use email marketing or putting the call to action only on their website.
With email, however, only…
- 75% of emails are delivered- over 422 billion emails per day sent to the Spam folder)
- 18% of emails are opened
- 7% of emails result in a conversion
If the call to action is only on your website, you rely on people searching for you constantly or constantly revisiting you to check on specials. Better hope you made an excellent impression on the first visit!
Following are some of the advantages of using Seynd over a call to action just through email or your website:
- 100% delivery rate
- 100% open rate – appears automatically
- 93% read rate. Requires action—or won’t go away
- 4 times higher opt-in rate vs email
- One-click subscribe – versus name, phone, email, etc. The system “remembers” them by their IP address and browser. Lower unsubscribes. Less than 10% of opt-ins cancel within a year
- Users will be notified as long as they are on their computer or device. They don’t have to come looking for you to see your message.
Ready to instantly improve your conversions?
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