Top 5 Conversion Metrics: How and what to track
Obviously conversion metrics can vary from company to company, but, overall there are metrics that are always important to track. Understanding where traffic is coming from and whether it’s converting will help you make better decisions about where to invest resources and dollars. At the end of the day knowing those metrics help you build and grow your business.
Knowing this, we’ve built a list of give metrics that we are always tracking, in no particular order:
1. Conversions (including conversion/tracking pixels)
I’ve walked into many situations where conversion/tracking pixels are incorrectly installed, tracking incorrectly, and in some cases counting multiple conversions per conversion. (i.e. pixel is firing >1 time for every time someone completes a transaction). These issues can lead to a complete misunderstanding of your traffic and how it’s actually doing.
Fixing conversion pixels gives you a really solid foundation. Our team usually won’t start spending money on online advertising until this foundation is solid. This usually gets some of our client partners upset because, as startups, they want to move as fast as possible, but, we’re pretty adamant about this.
Most ad channels will have documentation on how to install pixels. For example, Google has an entire guide to setting up tracking for adwords and Facebook has document on setting up their new “Facebook pixel” for tracking and conversions. (this is different from previously used conversion pixels which will be switched out in mid 2016).
Once you have this set up correctly, you can effectively understand metrics on a per ad channel basis. Furthermore, having funnels tracked across the board will give you info on all of your traffic sources.
2. Traffic Sources
While you’re building traffic to the top of funnel, you need to understand that traffic. You’re going to want to drive traffic from a variety of sources at first to see what works and what doesn’t. I tend to mix into give major channels:
– Direct & Brand: This is a mix of direct visitors and people searching for terms around your brand. For example, if someone was searching google for “visible factors” we would bucket this into direct & brand.
– Organic Search: Organic search traffic, or SEO, can be extremely important to almost every business. Understanding people that come to your site based on content, services, or products offered will help you understand your user/customer better.
– Paid Search: I keep paid and organic search separate because of the intent. Usually people clicking on the ads having a higher intent of conversion. Also, if you get a lot of blog traffic, organic search traffic might not convert as high as paid search.
– Online Advertising: I tend to bucket social ads, retargeting and direct display advertising in a different bucket than paid search as well. Again, the intent and targeting is different. In many cases, because of the targeting, our reporting will differentiate display and social because of our goals.
An example of this could be us using Facebook ads to target individuals who are interested in fashion brands so we can get them to like or convert on a client’s brand. On the flip side, we might use display advertising to increase visibility and qualitative metrics around the brand to get people to discover them. Increasing brand metrics won’t convert as high as a paid search or even paid social visitor, but, what it will do is provide an impression or someone that will pick up a retargeting pixel and convert that way.
3. Bounce Rate (per source)
Understanding Bounce Rate by traffic source is something that can help you understand your traffic better. By understanding your traffic sources and the intent of each, it better helps you understand how to speak to them. Also, differentiating different sources like organic search and organic search from a blog will help you diagnose concerns about your traffic. Blog traffic will not convert at as high a rate as direct commerce traffic and will have a higher bounce rate. A simple example of this is something I’ve seen before, a high bounce rate on a site from a single traffic source because of a mandatory email gate. Removing the mandatory email gate reduced the bounce rate, we were still able to collect email addresses and conversion rate went up. Win, win, win.
4. Return Visitors & Retention
Retention and re-engagement are important because it can dramatically drive down your customer acquisition costs. You can track this by looking at cohorts of users over periods of time. If you have some questions about this, check out Andrew Chen’s post on Cohorts and Revisit Rates.
5. Customer Acquisition Cost
Ultimately, this is the metric that is most important because, whether your selling a product, offering a service, or a content/social product, you need to understand the cost of acquiring customers and users. I usually like to have a CPA view that looks at traffic sources separately, per ad channel, and/or a blended CPA. Once you have this type of view you can understand how effective your marketing efforts are.
This isn’t the comprehensive list, these are just 5 things I think are important to consider. For paid marketing specifically, I like looking at ROAS and ROI to understand profitability of campaigns. Ultimately, we want to turn our client ad dollars into a profit. And, for social/content channels and growth, we like to look at cohort usage deeper.
Overall, as I mentioned initially, every company is different and it’s important to recognize what metrics are the most important for you to track. Defining this really drives how you look at the items I mentioned and how you track them specifically.
Let us know what metrics are your top conversion metrics below in the comments. And, check out how we can help with Online Advertising Consulting.