The first step in measuring conversion is to define it. This may seem like a no brainer, for example if you had an e-commerce site a conversion would be a sale. True, but you should not limit yourself to just one conversion. Any time you can get a visitor to interact with your site that is a conversion.

Your primary conversion may be a lead or a sale, but other conversions to measure are:

Completed ‘Contact Us’ page
Newsletter sign up
Viewing a contact page
Send to a friend
Completed a survey

These are all conversions either because someone gave you their contact information and permission to market to them (as long as your intention was clearly stated), someone spread the word about your company or someone provided you valuable feedback about your site.

Once you have your conversions defined, it is important to associate a dollar value to them. At first this may be inexact but the more data you gather, the more accurate it becomes. If your site is an e-commerce site you can actually track the dollar value of each sale either by passing it in the query string or using a tracking pixel. You will need to have a unique page, a thank you page, that signifies that the visitor actually completed the checkout process.

(Here too you will need to have a thank you page that signifies that someone completed the sign up process.) If your site is a lead generating site and there are no actual transactions, you can determine the value of a lead by simple math.

How many leads does it take to convert?
What is the average dollar value of the sale?

So if 1 in every 100 web lead converts and the average sale is $1500 then the dollar value of a web lead would be $15 ($1500/100). Again, when you begin this number will likely be incorrect, but if you can be disciplined and really keep track of the conversions, it will become a much more solid number in time.

Conversions like newsletter sign up; send to a friend, completing a survey may have a less direct impact on sales so those conversions may be assigned a lower dollar value.

With the conversions defined and the dollar value assigned, you now can use your web analytics to understand ROI, conversion rate and what keywords and campaigns (if you are running any) lead to the sale.

In most analytic packages you can segment or create a filter that isolates the traffic who reached that thank you page. By isolating that specific traffic and analyzing it separately it becomes clear which keywords are working and which are not, which campaigns have a positive ROI and which do not.

And once you have that information you can easily improve your campaigns by focusing on the keywords that have the positive ROI, reworking your content to optimize for keywords that perform better and in general, improving overall conversion rate.

Filed under: Analytics on Tuesday, January 15th, 2008 by Joy Brazelle | No Comments
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