Most organizations have awareness as to how many visitors they receive. However, there is a significant disparity between this figure and how many of those visitors take some form of valuable action once on their website (make a purchase, complete a form, schedule a phone call with someone, or download an application; the gap that exists is bridged by what we call “conversion tracking”). Conversion Tracking closes this gap, providing you with the evidence upon which to base your marketing decisions instead of having to make them based on guesswork.

If you are spending money to generate traffic to your website but cannot quantify how much of that spend generates revenue for you, then you can’t demonstrate that you are actually implementing a successful marketing program; you are actually doing nothing but gambling on whether or not your investments will generate any return. Here is an explanation of why conversion tracking is so important and how it will change the way you do business once you begin implementing it.

What Conversion Tracking Actually Is

Conversions can be defined as the valuable actions that you have chosen to track, including purchases, submitting a lead form, signing up for a newsletter, calling your business, adding to the cart, and starting a free trial. Conversion tracking is the process of recording when these actions occur and attributing them back to where the visitor originated from (for example, the source could be a specific advertisement, search term, email, or campaign).

Typically, conversion tracking is accomplished by implementing a small code snippet or tag on your website that is triggered when a visitor achieves the goal or completes the desired outcome. Tools such as Google Analytics, Google Ads, Meta’s Pixel, and all of the major CRM and ad networks support conversion tracking. Each tool implements and tracks conversions using slightly different mechanics; however, the intent of using any of these tools is the same to connect the money and effort you spend on advertising, marketing, and promotions to the results that you achieve.

Why It’s Not Optional

1. Stop Spending Money on Non-Effective Marketing

When you don’t have conversion data, all your marketing channels appear to be equal regardless of how they drive traffic. Once you have this data, you will see that you get the majority of your revenue from one type of advertising, whereas the other type generates traffic. You can eliminate the under-performing ads, and redirect that money to the ads that produce the highest response rate resulting in improved results without any increase in funds spent.

2. Calculate Actual Return On Investment

Most people think that the revenue generated from their ad spend indicates whether their marketing outreach was profitable. However, without measurable metrics that tie ad spending to the amount of revenue it produced, you have no way of calculating actual return on investment. For example, if you spent $5,000 on advertising last month without conversion metrics to show how much revenue was generated from that ad spend, you can’t make an informed decision as to how to allocate those ad expenditures for the following month. But with measurable ways of determining how much revenue was generated from the $5,000 ad expenditures for the previous month, you can now make future ad expenditures based on those results.

3. Know What Your Customers Are Doing

When you measure conversions, you will learn about what path your customers used before making their purchase. For example, most likely, your customers will make at least three stops prior to making a purchase decision. Additionally, they may be utilizing one of your posts to find signups rather than your home page. Without conversion metrics, you would never know about such trends and where you should focus your limited marketing dollars.

4. You can optimize instead of guess

If you have measurements of the outcomes of your changes, you can run tests against those measurements. Then each new headline, shorter checkout, and offer becomes an experiment with a measurable result versus an opinion. As you measure each of these changes and continue to achieve validated improvements, over time, those small improvements become large.

5. You spot problems before they cost you

Conversion rates can drop dramatically for many reasons, including a form that is not functioning, bugs in the checkout, errors on the pricing page, or issues with payment processing. If you are only tracking your total traffic (total visitors to your site), you may miss the opportunity to identify a problem before much damage occurs due to lack of sales while at the same time not having any issues related to traffic. Conversion Tracking serves as an early warning system for problems that directly affect your revenues.

Why These Common Objections Aren’t Good Enough

• “We’re Too Small A Business to Have This”: If you have a small budget, tracking your advertising is essential since you can’t afford to waste any of your budget; it’s even more important. Most of these tools are free or can be used with things you currently use.

• “It’s Too Technical” Setting up basic tracking is fairly straightforward; most of these tools have either a no-code option or will walk you through the process of installation. Even tracking one or two key actions will give you far more information than not tracking anything at all.

• “We Look at Total Sales” Tracking total sales will tell you how much you sold but won’t help you determine how (i.e., from where) you sold it or why you sold it. Identifying purchases as they happen allows you to repeat anything that worked.

How to Get Started

• Begin by identifying the two or three conversions you want to track, for example, a purchase or lead, and setting up tracking using either your current analytics tool or via a tracking tag or pixel on the action.
• After you’ve set up tracking on your conversions, do the action to see if it was successfully tracked. If your data is not right, it’s worse than no data!
• Conduct ongoing checks on how many conversions you’ve received from what source; when you find sources that drive lots of conversions, focus your efforts there and make adjustments.
• Begin to add micro-conversions and multi-step funnels as you expand into more advanced analytics tools; once your basic data is solidly in place, this will provide another level of understanding.

Conclusion

Tracking conversions allows you to do more than just guess if your marketing budget is a good use of money. You will learn where your customers are coming from, what actions they are most interested in, and which of your marketing efforts should be invested in more resources. In a competitive market, having this visibility is not a ‘nice to have’; it is the basis for every good decision you make regarding growing your business. You are likely already spending money and time to acquire new customers. Conversion tracking lets you know if all of that expense is generating revenue, which is something all businesses need to know.