What distinguishes conversions from conversion values?
What justifies setting conversion values for non-eCommerce companies?
How to determine conversion rates if you're not in the e-commerce business
The time of relying solely on individual conversions is long gone. The adoption and exploitation of conversion values are now encouraged across all ad platforms. Consider Google Ads as an example: One of the few available bidding choices for PMax campaigns is maxed conversion value, which has been receiving a lot of positive feedback from account referrals.
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If you work in e-commerce, you are familiar with the concept of conversion value because successful marketing efforts revolve around revenue tracking. However, you might find it difficult to determine a conversion value if you work in a service-related field or one where there isn't a predetermined rate for each encounter.
We'll get into how to do it in this piece. We'll talk about the following:
- specific conversions' variance from conversion values
- advantages of focusing on conversion values.
- how to calculate a conversion factor.
It should be noted that although this essay will concentrate mostly on how Google uses conversion values, the lessons learnt can be applied to other channels.
What distinguishes conversions from conversion values?
Any activity that you ask an advertising platform to track is a conversion. Conversion actions can range from those that are necessary for making a profit (such as downloading a guide or placing a call) to the actual sale.
The money you instruct the advertising platform to associate with the finished action is known as the conversion value.
I might, for instance, configure a conversion action to monitor all phone calls resulting from my Google Ads advertisements. As long as I set the action to be a primary action, Google will track each of them. Adding the conversion value into the action will determine whether it values the calls at $1, $100, or any other sum.
In summary, it is possible to track conversions in Google Ads without using conversion values, but doing so introduces data weaknesses for both the ad platform and internal reporting.
What justifies setting conversion values for non-eCommerce companies?
CPA is one of the main sources of false positives and negatives in PPC reporting (cost per acquisition). While having a low CPA is beneficial, organisations frequently obsess over lowering it to the absolute minimum without considering the worth of the leads they are generating.
A more useful PPC indicator than CPA for determining whether your ad campaigns are providing actual value is ROAS (return on ad spend).
Conversion values advance the discussion and make the real return on your advertising investment transparent. Setting conversion values enables Google Ads to better understand which activities are most valuable to you and where to allocate funding.
Additionally, taking conversion values into account will assist Google in developing more accurate projections of the potential returns on additional investment. This is especially helpful if your campaigns are running out of money but are generating low-quality leads. Google can target your ideal prospects more intelligently by adding conversion values.
How to determine conversion rates if you're not in the e-commerce business
We shouldn't assume conversion values are simple just because we're used to utilising them. Your conversion values will be based on models and data-backed best assumptions unless you're in a transactional business like e-commerce.
Comparing phone leads to form fills to chats is a pretty helpful place to start.
- Phone leads might be your greatest lead type if your sales team is best served by in-person encounters.
- You might appreciate your form fills or chats more if it's best served by a lot of prospect information (perhaps obtained through some content, a form, or another technique).
- Determine your baseline value as 10% of your gross profit from the typical engagement (you can alter this as you run your business and witness actual conversions).
- To calculate the conversion value, use the conversion rates for each category of lead.
Don't forget to take location into account. It may be more difficult or simpler to service some locations than others. You might choose to place a higher or lower value on leads from particular areas if the location of a customer affects your margins or if you have knowledge about customer retention in those markets. This can be accomplished by altering bids and eliminating areas from high-value ads with aggressive ROAS targets.
Static conversion value: Simply choose "Use the same value for each conversion" to set up a static conversion value. It's quite simple: The conversion value you set up will show for each time this conversion occurs as a result of your adverts.
What's a good conversion rate?
With some businesses obtaining an average of 11.45%, a strong conversion rate is one that is over 10%. When your organisation has a high conversion rate, it ranks among the top 10% of worldwide advertisers and has a two to five times higher conversion rate than the industry average.
Is a conversion rate of 30% desirable?
For an email opt-in landing page, 5% to 15% is generally considered to be a common conversion rate. Conversion rates for successful businesses typically range from 20 to 25 per cent. The very best conversion rates are 30% or greater, achieved by the cream of the crop.