Conversion value

Knowing your conversion value is crucial to optimize your marketing efforts, from PPC campaigns to landing page performance. Here's all the information you need about this KPI: what it is, why it's important, how to calculate it, and more!

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What is “conversion value”?

In marketing, the conversion value KPI refers to the monetary worth assigned to a user's specific conversion action. This metric quantifies the economic impact of conversions, allowing businesses to assess the revenue generated from marketing efforts. Conversion value helps calculate return on investment (ROI) and enables marketers to optimize campaigns for maximum financial impact. It's particularly useful for e-commerce and lead generation strategies, providing insight into which conversions are most valuable to the business.

How to calculate your conversion value

You don't need a complex conversion value calculator! To determine it, multiply the conversions by the assigned monetary value for each conversion type, considering your profit margin. Here's how it works: track conversion value for your entire website, specific landing pages, or individual marketing campaigns like Google Ads or Facebook ads.

This metric provides insight into the financial impact of your marketing efforts, allowing you to make informed decisions about budget allocation and strategy optimization. Use conversion value to calculate your target ROAS (Return on Ad Spend) and adjust your campaigns to maximize profitability.

Conversion value Formula:

Conversion Value = Number of Conversions × Value per Conversion.

What is a Good conversion value

A "good" conversion value depends on industry standards, business models, product or service pricing, marketing goals, and customer acquisition costs. Generally, a good conversion value should exceed customer acquisition costs, provide positive ROI, meet or surpass industry benchmarks, and show improvement over time. Without specific context, it's difficult to provide a universal number. Businesses should set their targets based on their unique circumstances and continuously work to improve this metric.

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What is a bad conversion value

A bad conversion value typically occurs when the monetary value generated from conversions is lower than the costs of acquiring those conversions. This results in negative ROI and unsustainable marketing efforts. It can be characterized by consistently falling below industry benchmarks, failing to cover customer acquisition costs, or showing declining trends over time. A bad conversion value might indicate ineffective targeting, poor product-market fit, or suboptimal pricing strategies. Any conversion value that doesn't contribute to profitability or long-term business growth could be considered bad, though the specific threshold varies depending on individual business goals and circumstances.

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Conversion value KPI examples & templates

Your conversion metrics can be added to multiple different types of reports.

See this KPI in action here!

See this KPI in action here!

Ecommerce report template

A report with all the most important metrics for your ecommerce site, like shopping cart abandonment, click-through rate (CTR), and of course your ecommerce conversion rate.

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Digital marketing report template

From SEO to social media and PPC, this report gives you a good view of all your online marketing strategy metrics and overall conversion rate.

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Google analytics report template

Simply plug your conversion goals (and even your data from Google Ads), and track a specific conversion rate, webpage new customers, conversion tracking, and way more.

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Conversion value best practices

There are a couple of things to keep in mind when tracking your conversion value:

Audience segmentation and targeting

Focus on high-value customer segments most likely to convert and generate significant revenue. Use transaction-specific data from Google Ads campaigns to make informed targeting decisions. Tailor your marketing messages and offers to these groups, optimizing your Google Ads campaigns to reach the most valuable prospects and drive higher conversion values.

Optimize the conversion funnel

Streamline the user journey from initial interest to final conversion. Implement smart bidding strategies to optimize ad spend across ad groups. Identify and remove bottlenecks, improve website usability, and create compelling calls to action to guide users toward valuable conversions. Adjust your bidding strategy based on conversion data to maximize the efficiency of your ad spend and improve overall conversion value.

Continuous testing and optimization

Conduct A/B tests regularly on various elements of your marketing campaigns and website. Analyze data, including attribution models, to identify what drives higher-value conversions and make informed decisions to refine your strategies. This includes testing different price points, offers, and messaging to maximize conversion value. Use attribution insights to understand which touchpoints contribute most to high-value conversions, allowing you to optimize your marketing mix and budget allocation accordingly.

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