Zuzanna Sarapata

Conversion - what is it and what is it used for?

Publication date
2 min reading
Table of contents

    Everyone who is involved in selling or sharing their content/knowledge with others has probably heard this term at least once. It is used to study the effectiveness of user behaviour. Whether you run a small online store or you're a blogger and want to reach the widest possible audience, it's worth knowing what conversion means and how to use it correctly to reach your target audience.

    What is conversion?

    Like many concepts, conversion too can have different meanings depending on what realm it specifically refers to. If you are wondering what conversion means, you should start with a general definition. Conversion is nothing more than a person (user) performing a specific action that you have set while creating the whole campaign. This could be making a purchase, clicking on an ad graphic, going to a specific page (using an affiliate link for example) and many others. It is important to note that the sales department views conversion completely differently than the marketing department.

    It may seem strange because everyone repeats that these two departments should constantly cooperate to achieve the best results. However, the marketing team’s job is to educate, build loyalty and encourage customers. It's not just about quick sales alone. Sales conversion refers to a direct purchase.

    Salespeople interact with their customers and 90% of their goal is to sell the item offered. Their KPI is also set based on a given percentage of sales success. Now that you know how conversion works in sales departments, you're probably wondering what conversion is in marketing. The answer to this question is not as clear-cut as above. Since marketing is based on more than one tool, conversion can be something different depending on the campaign.

    If your goal is to encourage customers to make a purchase, i.e. a very sales-oriented campaign, you will treat as a conversion everyone who, through retargeting, comes to your website and clicks on a banner with current promotion. Other times, you might treat it as an increase in the value of a shopping cart. Using cross-selling you create suggested products in such a way that makes the customer realize that they still need them. Remember, however, that conversion is also the number of clicks on your article published on the company's Facebook profile.

    What are the goals of conversion?

    Now that we know what a conversion is, let's consider what its goals might be. As you might expect, there can be an infinite number of goals. It's only up to you how you define conversion in your "campaign". Here are the most common ones:

    • Making a purchase
    • Clicking on the link referring to the page
    • Staying on the page as long as possible
    • Completing a survey
    • Signing up for a newsletter
    • Clicking on a banner/graphic
    • Downloading a file
    • Opening an email

    The goals can be endless. Let's now consider what is conversion rate and why is it so important for us.

    The conversion rate

    The conversion rate is nothing more than a compilation of the number of unique action data (e.g. link clicks) with the total number of people who saw our post with that link. We get the result as a percentage. If you're wondering how to calculate the conversion rate, here's a formula you can use. Conversion rate = (number of conversions / number of users)*100%

    Conversion rate optimization

    It is a known fact that everyone would like to achieve the highest possible result. Conversion rate optimization is a topic that forces marketers (and non-marketers) to constantly look for different ways to improve their campaigns. When a second campaign with the same guidelines yielded more conversions, it means that the optimization is going as it should. It's important to remember that conversion itself is affected by a lot of factors, and the optimization itself may not always be due to things within our control.

    What would be a good conversion rate?

    Now that you know how to increase your conversion rate, you're probably still wondering what result can be considered "good". It's hard to define such a result unequivocally. It is assumed that anything between 1% and 5% is already a good result. We know that this is a discrepancy of up to 4 percentage points, but each campaign is characterized by a different result. It all depends on the industry you are in, the competition, the offer you are presenting (in case of sales), the nationality of your target audience and many other factors. If your campaign is based on social selling and sells cosmetics, you’ll find different indicators of a successful campaign compared to someone who sells IT solutions through their website.

    Conversion funnel

    A conversion funnel is a path followed by the customer from the first contact with the company to the final purchase. The name itself comes from the graphical form - the conversion funnel is presented in the form of an inverted pyramid (which visually creates the shape of a funnel). Every funnel, not just conversion funnels have the same working principle. In the beginning, is the largest group of people. In our case, it may be the people who received a promotional email from us. The further down the funnel we go, the narrower it gets, which means that fewer and fewer people get to the next stages, the second step might be opening an e-mail message, and the third step is to click on the button at the bottom of the email and go to the website followed by adding the product to the shopping cart. The final step is the purchase. And in this way from 1000 sent emails we have 30 sold products. This shows us that we have achieved a conversion rate of 3%. We know from the previous paragraph that this is a result that can satisfy us.

    Although the concept of conversion is not that difficult to understand, its correct interpretation is a very individual thing. There are no rigid rules here. Everything should be adjusted to your needs and possibilities.