Depending on the kind of marketer you are, the question, "How effective are my marketing efforts?" can come in many forms. If you're a "quant" (i.e., natural quantitative thinker), you’re probably interested in the numbers (and probably lots of them, given how granular digital analytics can be). If you're more on the creative side, you're likely interested in perceived impact: What does your target audience feel or think during marketing campaigns? Do they respond the right way? Are they convinced of your message? You might find survey or focus group information the most useful available.
Regardless of your personality or skill set, when it comes to understanding marketing’s objective effectiveness within your company, the best measure is both quantitative and qualitative – and it’s called “a conversion.”
Deciphering What a Conversion Means
In my experience, the term “conversion” is used in a variety of ways, many of which are substandard or misleading. Contrary to popular thought there’s no standard set of marketing conversions, nor are benchmark conversion rates universal. Instead, the quality and measure of conversions depends on the company, its goals for growth, and its sales team’s effectiveness.
The whole point of examining conversions in marketing is to understand your marketing pipeline in terms of prospects’ varying states of sales-readiness. A conversion is a change in your relationship to prospects, beginning with your very first encounter. How you measure conversions depends on the marketing tactics you employ, the approach taken by Sales, and the level of consideration a typical prospect goes through when buying your product or service.
Setting Your Conversion Standards by the Buyer’s Journey
The best way of determining the right conversion rates to measure is by charting out the typical buyer’s journey. For manufacturing companies we often recommend the following steps in a buyer’s lifecycle:
- A website visitor becomes a contact by filling out an online form.
Conversion: Traffic-to-Inquiry or Traffic-to-Contact
- The percentage of contacts that gave honest, intelligible information, demonstrating their willingness to have some level of relationship with you—i.e. leads.
- The percentage of leads that demographically fit criteria that would qualify to be a good fit for your company to work with: the right kind of company role, industry, and buying position in their organization.
Conversion: Lead-to-MQL (marketing-qualified lead)
- The percentage of MQLs that cross the requisite threshold of desired interest and readiness to make a purchase, becoming a sales-qualified lead (SQL).
Of course, depending on what you sell, you might not distinguish between MQLs and SQLs. Or perhaps your sales team is so focused on outbound calling that they don’t care to limit their activity to just SQLs.
Similarly, for most niche industries, such as specialty equipment manufacturing or industrial supply chain, there’s very little reason to filter out online inquiries from leads because website traffic is such that your visitors are likely highly qualified from the get-go.
How Should You Benchmark Conversion Rates?
If you search for help setting realistic but goal-oriented benchmarks, more likely than not most of the answers are going to come from marketing automation software companies like HubSpot, Eloqua, or Marketo. These kinds of companies talk a lot about lead generation conversion rates because that's why marketers like us buy the software in the first place.
If you’re looking for a realistic number, we recommend setting your top goal for visitor-to-contact conversion at 2%, but benchmarking somewhere along the lines of 1.6%. In analyzing Weidert Group’s high performing clients, we found that the initial visitor-to-contact conversion rate fell between the 1.0-1.5% range when companies were successfully attracting high quality leads, with a higher likelihood of qualifying as MQLs.
While marketing automation platforms need to promote their lead generation potential, their numbers often cause bloated expectations, especially in understanding conversion rates. If you really understand the their buyer's journey and your marketing pipeline, focus on benchmarking against robust but realistic conversion rates to measure the effectiveness of your marketing efforts.