Is your business growing at a healthy rate? Conversion analysis holds the answer. By tracking how many users complete a desired task and the steps they take to get there, you can discover ways to boost conversions for bigger growth.
What is Conversion Analysis?
Conversion analysis is the process of analyzing data related to conversions. A conversion is defined as a specific, desirable action that’s taken by a website user. Typically, a conversion is linked to one of the following things:
- Supplying contact information
- Creating an account
- Signing up for a subscription
- Making a purchase
Conversions are a key performance indicator (KPI) that virtually every business can use to improve revenue generation, retention rate and more. It’s one metric that can gauge how a business is performing overall. That’s why conversion analysis is such a worthwhile endeavor.
5 Steps to Using Conversion Analysis
Step 1. Define Business Goals
Conversion analysis isn’t possible without business goals that serve as benchmarks. Once you begin the conversion analysis process your goals help you determine if you’re on track or at risk of missing the mark.
Step 2. Establish Conversion Events That Support Business Goals
Conversion tracking software simply can’t do its job without defining a conversion action. But a conversion isn’t just any activity. It’s reserved for actions that add value to the business and support your goals.
There are macro and micro conversions. Macro-conversions are your primary goals, such as completing a sale. Micro-conversions are all the smaller actions that lead up to a macro-conversion. If you’re just starting conversion analysis start small with one macro-conversion and 2-3 micro-conversions.
Micro-Conversion – visit a product page
Micro-Conversion – put a product in the cart
Macro-Conversion – complete a purchase
In general, it’s best to limit the number of conversion activities that are tracked at one time. Trying to do too much at once can cause information overload that’s more confusing than helpful.
Step 3. Choose an Analytics Platform
You’ll need a way to gather and aggregate your website data. Doing this manually with a proprietary tool is way too time-consuming for most businesses. It also requires the expertise of data engineers and analysts that may not be on staff.
A much simpler option is to use a third-party analytics platform. The Mixpanel is one such platform that was built to provide in-depth conversion analysis at every stage of your funnels. The most important attribute to look for is the platform’s ability to integrate data and display it in a way that’s easy to read.
Step 4. Set Up Conversion Analysis Reports
This leads us to the next step – reporting. The data needs to be presented so that all stakeholders and decision-makers can understand the results. Another useful reporting feature is customization. Being able to parse and display the data in different ways can help you get more out of the information and zero in on specific details.
Step 5. Test the Findings
4 Important Things Conversion Analysis Can Tell You
Onde of the most commonly referenced metrics today is conversion rate. This is a measurement of how many users complete a conversion. To calculate the conversion rate for your website you take the number of conversions and divide it by the total number of site visits.
Convertions / Total Number of Site Visits = Conversion Rate
You can also measure the conversion rate on an individual level if a user can convert more than once. In this case, divide the number of times the user converts by the number of times they visit your site.
Number of Conversions / Number of Sessions = User Conversion Rate
If users can only convert once there’s a conversion rate calculation for that too. You simply divide the number of conversions by the number of unique users. The number of site visits doesn’t matter since a user can only convert once.
Number of Conversions / Number of Unique Users = Conversion Rate
As you can see, there are several ways the conversion rate can be calculated during your analysis. Which calculation should be applied depends on what you define as a conversion and whether a user can convert more than once.
If you’re interested in optimizing your sales funnels, then conversion analysis can help. A robust analytics platform will show you the exact path that a user took to reach a conversion. Analyzing the steps that users took can reveal effective paths that you didn’t realize existed.
You can also get a deeper look at the sales funnels you’ve already put in place. Conversion analysis will tell you where users drop off so that you can look for areas of improvement. This is known as funnel visualization. You can glean additional insights by comparing conversion paths to those of users that didn’t convert.
Customers share commonalities. Some are obvious and others are more discreet. Conversion analysis can show you who users are and what they do before, during and after converting. It reveals behaviors like:
- How much time or how many visits it takes a customer to make a purchase (time to purchase).
- Where customers live.
- What devices they use.
- Which marketing channels draw in the most customers.
- Which products/services/subscriptions are the most popular.
- Common behaviors within a customer segment.
The more you know about who is and isn’t converting the more targeted your marketing and product positioning will be.
Conversion Optimization Strategies
Conversion analysis is just as much about what’s not happening as it is about what’s actually being done. When users are not converting optimization is needed to improve the results.
You could take a guess at what is preventing people from converting, but that’s a time-consuming, often costly process that may fail to provide any improvement. One of the biggest benefits of conversion analysis is it removes the guesswork.
The trends and patterns in the data reveal optimization opportunities. They can tell you where users are dropping off so you can focus your attention and pinpoint the issue. They tell you what’s working so you can double down on those efforts.
At the end of the day, increasing conversions is the ultimate goal of doing conversion analysis. Being able to fast-track the process means you’ll miss fewer opportunities to generate more revenue.