Using conversion tracking to learn where customers come from
In the first quarter of 2024, ecommerce conversion rates ranged from 0.3% to 2%, depending on the industry. With such a small percentage of website visitors turning into new customers, every conversion counts, so it’s important to understand how customers with a high intent to purchase are discovering your brand. Conversion tracking provides that insight.
Using conversion tracking tags (more on these later), you can see not only how a customer came to your website but also the pages they visited while they were there. This allows you to track your customers’ journeys and see which of your ad campaigns and web pages are most effective.
Below, you’ll learn how to set up conversion tracking, which metrics to track, and how to use data to optimize your customer acquisition strategy. Once you understand how potential customers are turning into paying customers, you’ll be able to reach more of them and grow your business.
What conversion events and goals should you track?
Purchases aren’t the only type of conversion. In fact, most consumers will complete smaller conversion events—like following you on social media or signing up for your email list—before officially becoming paying customers. Recent research found that it can take anywhere from one to 50 interactions with a potential customer before they make a purchase.
Conversion tracking can show you how website visitors become paying customers step by step. For example, a potential customer might see an ad for your product on social media. Clicking on that ad will take them to a landing page. From the landing page, they sign up for your email list and download an ebook. Then they leave your site without making a purchase.
Later, the potential customer receives an email from you and clicks a link that takes them to one of your blog posts. From the blog, they click a link back to your product page. They add the product to their cart but again leave without completing their purchase.
Then the potential customer sees a remarketing ad reminding them of the products in their shopping cart. They click the ad, return to the checkout page, and complete their purchase. After the purchase goes through, they’re shown a thank you page.
All of these steps were an important part of this customer’s journey, and all of them helped you win this conversion. If you were to measure website conversions based only on people who made it to your thank you page, you would be missing a big part of the picture.
Instead, try setting both big and small conversion goals. For example, your big conversion goal could be purchases, but your smaller conversion goals could be:
- Page views
- Button clicks
- Email or newsletter sign-ups
- Demo sign-ups
- Phone call requests
- Consultation requests
- Contact form completions
In addition to website actions, there are also offline conversion events. Offline conversions can be especially important to small and local businesses. These might include phone call conversions or in-person visits to your business location.
You can track phone calls by having a responsive phone number on your website and online business platforms, like Yelp, where you can quantify how many people click on the phone number to call your business. You can also track in-person visits by monitoring the number of people who use online maps to navigate to your business.
How to set up conversion tracking
The steps you’ll take to set up conversion tracking depend on the advertising platforms you use. For example, you can use Yelp’s link-tracking feature to monitor which links and calls to action in your Yelp Ads program bring the most traffic to your website (available to Yelp advertisers with 10 or more locations). You can also attribute conversion actions on your website—like sign-ups, downloads, or purchases—to traffic from your Yelp Ads campaign.
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Other pay-per-click (PPC) advertising platforms, like Meta Ads Manager (for Facebook and Instagram Ads), also offer built-in tracking features.
In addition to tracking the number of conversions you get from paid ad campaigns, you can track conversions from emails, social media posts, and web pages. Google Analytics is a free tool that can help you monitor where traffic to your website is coming from and how website visitors move through your web pages.
You can set up conversion tracking in one of two ways: with tracking pixels or tracking tags.
Tracking pixels
Tracking pixels track your website visitors’ activity across your site and anywhere else they go online. This allows you to show them ads as they browse the internet.
For example, if someone visits a specific product page on your website, a tracking pixel enables you to show them remarketing ads on social media or Google Ads for that product page.
To use tracking pixels, you’ll add a snippet of JavaScript code to every page on your website. Your advertising platform will provide the code snippet and instructions for adding it to your site.
Setting up tracking pixels can be a bit time-consuming, but once set up, they’re relatively low maintenance.
Tracking tags
While tracking pixels monitor the activity of individual website visitors, tracking tags monitor the effectiveness of your various digital marketing campaigns. Also known as UTM (short for Urchin Tracking Module) tags or UTM codes, these are extra snippets of code that you add to the end of a URL.
Let’s say you run a PPC ad campaign. Whenever people click on your ad, it takes them to a landing page explaining the benefits of your product. When you set up the ad and input the link to your landing page, you’ll add the UTM code at the end of it. This code allows you to track how many people come to your landing page from that specific ad campaign.
UTM codes contain parameters that tell you the:
- Campaign source: Where the traffic came from, like a search engine, website, or social network
- Campaign medium: The type of marketing material, like a social media post, email, or PPC ad
- Campaign name: What you’re calling this marketing effort, like “spring product launch” or “semi-annual sale”
- Campaign terms: Keywords and search terms connected to paid ad campaigns
- Campaign content: The call-to-action you included in your ad
You’ll place different UTM codes at the end of the same link to differentiate each of your marketing channels. So if you link to a landing page from your social media account, email, and PPC ad campaign, you can create separate UTM codes for each. Then, you’ll know which customers came to the landing page from social media vs. email vs. paid advertising. UTM codes can be extremely important for creating attribution models, giving credit to one of your marketing channels for each customer you acquire.
You can create UTM codes in Google Tag Manager, which works with your Google Analytics, giving you more data about how people interact with your website.
Conversion tracking and your CRM
The API of most customer relationship management (CRM) software can pair with Meta and other conversion tracking tools. This allows you to connect your customer data and your conversion data.
For example, let’s say that a lot of new customer leads are coming into your CRM because they fill out a form on your website to request a consultation. The majority of those customers fill out the form after clicking on an ad that appears on the search engine results page for one particular search term.
Imagine that your advertising strategy involves showing ads on three or four different search terms, but only that one is leading to the conversion action of filling out the consultation form. You can now change your bidding strategy—increasing your ad spend on the one high-converting search term and decreasing your spend on the other terms.
This insight allows you to increase your return on ad spend (ROAS). Pairing your CRM with conversion tracking tools will help you get a higher-level view of your data, so you’ll be able to understand your customers’ journeys more completely and reach new customers more effectively.
How to use your conversion data
Once you start conversion tracking, you’ll get a lot of data—especially if you’re tracking multiple conversion events. All of this data can empower you to make better advertising decisions and increase your ROAS. But data is only as powerful as what you do with it.
Here are a few ways you can make sense of your conversion data and use it for campaign optimization.
Assign a conversion value to different events
You can create a points system to signify how valuable different actions are. For example, if a customer signs up for your email list, maybe that’s worth 3 points. If they fill out a consultation form, maybe it’s worth 5 points. If they download your mobile app, it could be 8 points. And if they make a purchase, 10 points.
Choose a points system that makes sense to you, based on your business goals. Assigning values to conversion events, and recording those values in customers’ CRM profiles, allows you to track where a potential customer is in your marketing funnel. Then you can send them ads relevant to their position in the funnel.
For example, if someone only has a few points, you might simply try to increase their brand awareness and build your relationship with them. If they have a lot of points, it might make more sense to attempt a sale.
Create attribution models
Attribution models attempt to give credit to one or more of your marketing channels every time someone visits your website or makes a purchase. Attribution models allow you to see which of your marketing channels bring the most customers to your website.
You can also see which channels most often serve as the first touchpoint in your customer journey and which ones often serve as the last touchpoint leading a customer to make a purchase. You can also monitor how long customers spend at different touchpoints before returning to your website, which can help you identify weaker points or hold-ups in your customers’ journeys.
Adjust your ad spend
Once you know which of your marketing channels are bringing in the most customers, the next step is to adjust your ad spend. You can save money by cutting your spending on less effective channels, or you can reallocate your budget to spend more on the channels with the highest ROAS.
Campaign optimization is an ongoing process, and your conversion data can change over time as your customers’ priorities change, so continue to track your conversions and adjust your strategy to match your most recent data.
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Conversion tracking can help you understand your customers better. You’ll see the journey they take from discovering your brand to making their first purchase.
Once you have conversion data, you’ll be able to make better marketing decisions that help you reach more customers. To get the most out of every ad campaign you run, learn more about advertising analytics, including what else you can track and how to use your data to optimize your digital marketing strategy.