This time, we will explain one of the most important concepts in marketing: conversion. Conversion is an essential element when evaluating the effectiveness of websites and advertisements, and it is a crucial metric for achieving goals.

However, many people might not understand the specific meaning or types. Therefore, we will provide a detailed explanation of the basic meaning of conversion, the different types of conversions in marketing, and effective ways to improve them.

What is Conversions?

Conversion, abbreviated as CV, comes from the English word “conversion,” meaning change or transformation. In web marketing, it refers to the final outcomes a company aims to achieve, such as product purchases or inquiries.

In other words, the term “conversion” applies because it signifies that a visitor to the site has transformed into a customer. Conversions also include encouraging users to take actions such as requesting information or registering as members, thereby making them aware of products or services.

Understanding the Importance of Conversions in Marketing

In web marketing, conversions are vital as they help determine whether the strategies implemented are driving the desired outcomes.

Achieving the targeted conversions confirms the effectiveness of these strategies. On the other hand, if the conversions are lacking, it necessitates a reevaluation of the marketing approach. Measuring conversions thus allows for quantitative decision-making.

Different Definitions of Conversion Based on Marketing Objectives

While purchasing a product might be the first example that comes to mind, the definition of conversion can vary according to a company’s marketing objectives. These include actions such as;

We will explain each of these in detail.

Product Purchase

In many businesses, product purchases are considered conversions. For e-commerce websites, each purchase of a product handled by the company is counted as one conversion. Whether the product costs 1,000 yen or 30,000 yen, each is counted as a single conversion.

Document Requests

Especially in B2B contexts, companies might not sell products or services directly through their websites but instead, aim to receive document requests from users. Each document request is then measured as one conversion.

Membership Registration

For companies offering subscription services, such as those streaming movies or TV shows like Netflix, a user’s registration is considered a conversion.

Inquiries

Some companies measure conversions by the inquiries they receive. For example, consulting firms often offer free initial consultations and consider using these consultations as a conversion.

Service Usage

Companies providing specialized services count the start of service usage by a user as a conversion. For instance, a software company might view each download of their application by a user as a conversion.

Different Conversions for Different Types of Websites

The definition of conversion varies with the type of website, which we will detail for the following three types

E-Commerce Sites

The primary goal of an e-commerce site is to facilitate product purchases, making this the natural conversion point. However, the way companies count conversions can vary; some might count each purchase as one conversion, regardless of the number of items bought, while others might count each item purchased. This may vary depending on the company’s circumstances.

Information and Community Sites

Community sites, such as blogs or user interaction platforms, typically consider user registration as a conversion, essential for the site’s viability and interactive purpose.

For sites focused on providing information, subscribing to newsletters or downloading free reports are counted as conversions.

Corporate Sites

The main goal of corporate sites is to disseminate information about the company. Therefore, document requests, inquiries, and engagements with recruitment content are considered conversions. These interactions often require users to input their information into forms, necessitating user-friendly form designs and appropriate input fields to facilitate conversions.

Types of Conversions

There are eight types of conversions.

Here, we will explain each one.

Direct Conversion

A direct conversion, also known as the last conversion, occurs when a user takes an action directly on a website that leads to a desired outcome without leaving the site.

For example, if a visitor purchases a product directly after arriving at an e-commerce site, this is considered a direct conversion.

If a purchase is made after clicking through multiple ads, the final ad clicked is counted as the direct conversion.

Indirect Conversion

Indirect conversions happen when a user initially visits an e-commerce site via an ad, leaves, and then returns to make a purchase.

Each ad clicked before the final action that doesn’t directly lead to a conversion is considered an indirect conversion.

This type can also help analyze user behavior and the effectiveness of retargeting ads on other sites. For example, when a user leaves an e-commerce site and browses another site, it is possible to measure whether retargeting ads on that site lead to conversions.

Total Conversion

Total conversion refers to the number of times users who clicked on an ad completed a conversion.

For example, if a user clicks on an ad and then purchases three products, the total conversion count is three. Similarly, if one user registers as a member and requests information, the total conversion count is two.

This metric is used by sites targeting a wide range of general consumers to drive sales and profits.

Unique Conversion

Unique conversion counts each user only once, regardless of the number of conversions. For example, if one user registers as a member and requests information, the unique conversion count is one. Unique conversions are used in contrast to total conversions.

If two users each purchase three products, the unique conversion count is two.

Thus, unique conversions are defined based on individual users, making it a metric for acquiring new customers.

Click-through Conversion

This type of conversion occurs when a user clicks on an ad, goes directly to the e-commerce site, and makes a purchase. It is called a click-through because it results from clicking an ad and moving to the e-commerce site.

View-through Conversion

A view-through conversion refers to cases where a user views an ad and later visits the company’s site through a different route and completes a conversion.

For example, a user might see an ad, then visit the company’s site via another ad, or purchase a product by visiting the site directly from a web search result without clicking the ad.

View-through means counting the results from users who previously viewed the ad.

Macro Conversion

Macro conversions refer to the primary goals or outcomes of a website. For an e-commerce site, this would be product purchases by users, directly impacting sales.

For a site aimed at member registrations or information requests, the number of registrations or information requests would be considered macro conversions.

Micro Conversion

Micro conversions refer to intermediate achievements that lead to the final outcome. For an e-commerce site, the ultimate outcome is a product purchase. If a user registers as a member or subscribes to a newsletter on the way to purchasing a product, these actions are counted as micro conversions.

In other words, it is the necessary steps users take towards making a purchase. These achievements are called micro conversions.

Conversion Count vs. Conversion Rate

There are “conversion count” and “conversion rate” in conversions.

The conversion count refers to the number of instances such as purchases or information requests. For example, if various marketing initiatives result in five conversions, the conversion count is five.

On the other hand, the conversion rate is the percentage of visitors to the site who complete a conversion. When considering marketing strategies, pay attention not only to the conversion count but also to the conversion rate.

How to Calculate Conversion Rate

The formula for calculating the conversion rate is as follows.

CVR=(Number of ConversionsNumber of Sessions)×100%CVR=(Number of SessionsNumber of Conversions​)×100%

For example, if a website is visited by 1,000 people and 10 of them make a purchase (considering a purchase as a conversion), the conversion rate would be calculated as:

Conversion Rate=(10 purchases1000 visitors)×100%=1.0%Conversion Rate=(1000 visitors10 purchases​)×100%=1.0%

Why the Conversion Rate is Important in Marketing

In marketing, it is important to focus on the conversion rate, not just the conversion count.

For example, suppose a marketing campaign resulted in five conversions. However, it is unclear whether these five conversions are a good or bad result.

Let’s say last month there were 100 visits and five conversions. This month, there are again five conversions, but there were 300 visits to the website. In this case, the conversion rate has dropped to one-third.

Thus, even though the number of conversions is the same as last month, the conversion rate has significantly decreased, indicating a poor result.

Therefore, when considering marketing strategies, it is necessary to pay attention to both the conversion count and the conversion rate.

Key Points for Measuring Conversions

Here, we will share some key points for measuring conversions. Use these as a reference when you start measuring conversions for your company.

Define and Set Goals for Conversions

When measuring conversions for your company, it is necessary to clearly define what constitutes a conversion. For example, decide whether a product purchase or an inquiry is considered a conversion based on your company’s goals. Additionally, calculate in advance the conversion rate needed to achieve profitability.

Use Tracking Tools

Conversions are measured using tools. Generally, Google Analytics is commonly used. Other tools like Hotjar, Kissmetrics, and Mixpanel can also be utilized. These tools allow you to measure not only the number of conversions on your website but also the conversion rate, traffic numbers, and more.

Analyze Data and Improve

Regularly analyze conversion data to identify effective strategies and areas for improvement. By clearly outlining the process users go through to convert, it becomes easier to spot improvement points. Use tools like the marketing funnel to help discover these areas for enhancement.

Strategies to Increase Conversion Numbers

To boost conversions, consider these four strategies.

These methods create a website environment that makes it easier for users to purchase or apply, encouraging them to take action. As a result, both the conversion rate and the number of conversions will improve.

Define Your Target Audience

The target users of your company’s services or products will vary depending on who you aim to reach. To clarify your target, focus narrowly and deeply.

For example, if you set your target as Japanese people, this includes various ages, genders, and occupations, making it unclear who the product is intended for. Therefore, specify and narrow down the target user’s gender, occupation, lifestyle, and other details.

As a starting point for increasing conversions, first clearly decide who you want to offer your services or products to.

Set appropriate traffic keywords

There are mainly two routes for attracting traffic to a website.

For both, if appropriate traffic keywords are not set, conversions cannot be expected. For example, if you receive a gift wrapped in a plastic bag from a supermarket or convenience store, you would be disappointed even if the content was a high-end brand item.

Inappropriate traffic keywords only increase access from users who are not the intended target, leading to no conversions. This results in a loss of opportunities for both your company and the users.

Aligning traffic keywords with the interests and concerns of your target users is crucial for preventing these losses and building trust.

Clarify Conversion Points

Make it easy for users to understand where and how they can convert on your site.

Make it easy for users to identify the points that prompt actions leading to conversions, such as product purchases or inquiries.

If the contact form’s location is unclear or the purchase button is hard to find, users will leave the site at that point. Design the navigation and interface so that even first-time visitors can use it intuitively.

Lower Barriers to Conversion

A site with high conversion barriers includes the following.

Sites that require visitors to perform unnecessary actions have high conversion barriers.

If users have to navigate through multiple pages to purchase a product or if the contact form has unnecessary input fields, their willingness to convert decreases. Review your site’s design to ensure there are no excesses or deficiencies.

Common Questions About Conversions

Here are some frequently asked questions and answers about conversions.

Q: How do I track conversions?

A: To track conversions, use tools like Google Analytics. These tools automate the measurement of conversion counts and rates. Don’t just set up tracking tools; regularly review the results to identify areas for improvement.

Q: What is the average conversion rate (CVR)?

A: The average CVR varies by industry. Typically, conversion rates are said to range from 1% to 5%, but this can vary based on the industry and the pricing of products being sold. The key is to continuously measure and improve your own conversions.

Q: What techniques can improve CVR?

A: A common technique to improve CVR is A/B testing. Prepare similar web pages and compare which one achieves a higher CVR. Continue to use the better-performing webpage. Repeating this process can enhance CVR over time.

Q: What is the optimal period for measuring conversions?

A: The optimal period for measuring conversions depends on the nature of your business and your marketing strategy. Generally, data is collected over several weeks to months to discern trends and patterns. However, if your website experiences very low traffic, a longer measurement period may be necessary.

Q: Can multiple conversions be set up?

A: Yes, you can set up multiple conversions. For instance, you might establish target conversion rates and numbers for various processes such as inquiries, document requests, and purchases. Accordingly, set as many conversions as necessary to meet your company’s objectives.

Summary

A conversion refers to a website visitor becoming a customer of your company. The definition of a conversion can vary depending on the type of site deployed but typically includes actions such as purchases, document requests, and inquiries. To increase the number of conversions, it’s crucial to focus on the conversion rate. The conversion rate indicates the proportion of users who complete a conversion, and analyzing this rate can help identify areas for improvement. For example, strategies might include revising form fields or positioning the purchase button more prominently. Aim to reduce the effort required by users, making it easier to apply or purchase, thereby creating a user-friendly website.

Author Profile

Mr. Takeshi Amano, CEO of Admano Co., Ltd.

Mr. Takeshi Amano is a graduate of the Faculty of Law at Nihon University. With 12 years of experience working in the advertising agency industry, he discovered SEO and began his research during the early days of SEO. He self-taught and conducted experiments and verifications on over 100 websites. Using this expertise, he founded Admano Co., Ltd., which is currently in its 11th year of operation. Mr. Amano handles sales, SEO consulting, web analytics (holding the Google Analytics Individual Qualification certification), coding, and website development. The company has successfully managed SEO strategies for over 2000 websites to date.

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