Franchise owners are inundated with data these days, and analyzing it all to see where conversions are produced can be incredibly overwhelming and often confusing. So let’s dive into what conversion means in a business and how franchises use it to determine progress.
About 80 percent of marketers are spending more time working with data, a recent Callcredit Information Group survey found. But more than 70 percent regularly feel data overload and aren’t fully utilizing the valuable data they have. That’s because about one-third of marketers don’t feel equipped to perform proper analysis.
There are many conversion data points to examine, but identifying which points are most relevant depends on your company’s goals. Once you define those goals, you can prioritize your approach.
Choosing Conversions Wisely
Many conversion metrics can be used to measure success, from website sales, newsletter sign-ups and subscriptions to cost per conversion, cost per click, view-through rate and more. Choosing what is a conversion can completely change what conversion means in a business.
Success depends on focusing on the metric most relevant to achieving your company’s goals. Focus on one at a time, then reprioritize metrics on the basis of what’s driving the best results, thus ensuring higher ROI for marketing spend.
If your company’s goal, for example, is to increase traffic to its site, clicks and click-through rate are the most relevant metrics. If the goal is to increase newsletter sign-ups, then cost per conversion, overall conversions and click-through rates will be most valuable. For a branding goal, key metrics are reach, frequency and impressions.
Regardless of a company’s goals, sometimes leaders might want to see specific conversions, such as those that showcase ROI. If you’re not already tracking them, consider adding some of these conversions to your next presentation.
Open rate is one of the top conversions to showcase return on investment. Your business is likely doing some type of email marketing, but what are you doing to make sure consumers actually read your emails and click through to your website? Businesses that send frequent targeted emails see the highest open and click-through rates.
Redemption rates also will reveal whether campaigns are producing ROI. If your business is targeting a specific audience, determine whether consumers are following through on the call to action. Did they use a coupon, for example? Was there an offer attached to a special phone number or landing page, and if so, what were the results?
Finally, be sure to measure against the spend of marketing and business results. If your business aimed to grow by a specific number of customers, did you reach that goal? If not, what happened? Remember: Establishing a baseline and comparing numbers are the only ways to measure marketing ROI. It’s imperative to consider the sales numbers for a few months before and after a new marketing campaign launch to see its full impact.
Commonly Misinterpreted Metrics
It’s impossible to talk about metrics without mentioning those that just aren’t what marketers think they are. Some metrics can be especially misleading, and the results can be easily misinterpreted.
First, measuring cost per conversion doesn’t make or break a marketing campaign. This is what your client is worth to your business in relation to the products sold. If you’re paying more to gain a new customer than the sale is worth, you haven’t gained a return on your investment. A lower cost per conversion in relation to the customer value means a positive ROI.
The conversion rate tells a business how many people who clicked went on to complete the desired action, such as purchasing a product, signing up for an email list or free consultation, or filling out another type of form. Strong conversion rates mean your campaign is profiting, resulting in a positive ROI.
The CTR Misconception
One final misconception is click-through rate. A high click-through rate is not indicative of a successful campaign. You should take a strategic approach to targeting to include new audiences. Consider this: Online display ads have been around for decades, and some of the first ads had CTRs of 44 percent. Over the years, however, CTR has declined dramatically and was about 0.1 percent in 2012. Instead of clicks and impressions, marketers are now paying for performance and realizing that conversions aren’t always tied to clicks.
There are a lot of conversions to consider in the marketing world, and it can be overwhelming to analyze them all and pinpoint which will help you reach your goals and produce a return on your investment. But once you understand which metrics work best for your company’s goals, the rewards are plentiful.