In general, a conversion describes a desirable outcome. So how are conversions used in marketing? To find out, let’s look at how conversions apply to both marketing and sales camps.
A marketing conversion records a potential buyer completing the desired action in response to a marketing effort. You define what actions your company considers a conversion. Common examples include when a prospect:
A high number of conversions usually means you’re resonating with your audience; however, a marketer aims to create conversions that ultimately lead to a sale, so quantity isn’t everything.
A sales conversion describes a lead progressing further down a company’s sales pipeline, usually due to a particular sales activity. For example, a business that sends out quotes might consider a lead accepting a quote as a conversion.
Conversion rate is the percentage of people who have performed a specific action or reached a particular stage in a sale pipeline.
Conversion rate is an essential metric in marketing. Firstly, let’s look at how we calculate it using a simple example.
A low online conversion rate might indicate that your visitors are not interested or ready to trust your offerings enough to submit an enquiry form.
The calculation is the same for a sales conversion, for example:
Quote Acceptance Conversion Rate = Quotes Accepted / Total Quotes Sent
A high quote acceptance conversion rate might indicate that your pricing strategy is working well.
A business can find even more meaningful insight by comparing conversion rates across its entire marketing and sales strategy. Imagine this scenario:
Armed with these conversion rates, a business owner can see that marketing efforts generate too many unqualified leads that do not fit its sales criteria. In this example, making changes to the Facebook target audience might generate leads more likely to convert to sales.
By measuring conversion rates over time, a marketer can report on the effectiveness of any changes made to a campaign or sales process.
You can track website conversion rates using analytics tools like Google Analytics. Intelligent CRMs such as HubDash give you more comprehensive tracking tools to record and report on both marketing and sales conversions.