Conversion analysis is the process of conducting in-depth research into user behavior and critical touchpoints to understand how to convert potential customers into actual paying customers or achieve desired objectives. It is an important analytical tool for businesses.

In this article, we will introduce the meaning of conversion analysis, and the underlying formulas, and demonstrate how to create a conversion analysis example using the business intelligence (BI)  tool FineBI.

Conversion analysis, also known as conversion marketing, is a method of tracking website visitor behavior. Conversion analysis can help you identify which types of customers and actions correspond to conversions, as well as the timing and location where users fail to convert. To conduct conversion analysis, you must understand the customer journey. The best way to do this is by mapping out each step a customer takes in the conversion funnel, which may include purchasing a product, filling out forms, registering an account, etc., so that you can have a rough idea of the ideal steps to convert website visitors into customers.

The primary purpose of conversion analysis is to identify the factors that lead to successful conversions and optimize marketing efforts to increase the conversion rate. By understanding what is effective and what is not, businesses can make data-driven decisions to improve overall performance and return on investment (ROI).

The conversion rate is used to measure the effectiveness of specific actions or campaigns in converting potential customers or visitors into actual paying customers or achieving desired objectives. The "desired objectives" can vary significantly depending on the industry, business type, and specific activities, resulting in varying conversion rates for different goals.

Common conversion goals include:

• Engaging in purchases
• Providing contact information (leads)
• Making phone calls to the company
• Subscribing to newsletters
• Establishing accounts
• Acquiring assets through downloads (e-books, guides, or other content)
• Interacting with the website (e.g., website dwell time, visits to specific pages, page views)

Generally, the conversion rate refers to the number of conversions (e.g., orders placed, subscribers, trial registrations) expressed as a percentage of the total number of website visitors.

Conversion Rate = Number of Conversions / Total Visitors

For example, let's consider a software company that had 500 website visitors in a given period and received 20 sign-ups for their free trial. In this case, the conversion rate would be 4.0%.

Conversion Rate = 20 / 500 = 4.0%

We take a particularly thoughtful approach to conversions, clearly distinguishing between macro-conversions and micro-conversions.

• Macro-conversions represent the primary objectives (such as product sales or quote acquisition).
• Micro-conversions are smaller goals that contribute to achieving the primary objectives (like adding products to the shopping cart or signing up for a mailing list).

Therefore, visitors effectively convert into two categories: first as prospects, which is the result of micro-conversions, and second as customers, typically after obtaining a quote or completing a transaction. Once someone becomes a customer, there are opportunities for upselling and cross-selling, enabling further revenue generation from the same individual.

Conversion analysis plays a critical role in assisting business decision-making. By gaining a deep understanding of customer behavior and the conversion process, we can develop more effective marketing strategies, optimize products and services, and enhance overall business performance. The best way to achieve this is by mapping out each step a customer takes in the conversion funnel, enabling us to identify the channels and activities that yield the highest conversion rates. This allows us to focus our investments more efficiently, maximizing our return on investment.

Now, let's combine FineBI, a professional BI tool, to build a practical example of conversion analysis.

FineBI is a modern big data analytics and business intelligence tool designed for anyone with data analysis needs. It empowers individuals at every level to effortlessly build professional BI dashboards, perform self-service data analysis, and gain valuable insights to drive their business forward.

With FineBI, you have access to a user-friendly interface that allows for easy visual data manipulation, filtering, merging, and calculations, all without the need for coding. Furthermore, FineBI offers an intuitive drag-and-drop interface that enables you to effortlessly create visually appealing and impactful interactive dashboards.  

Firstly, we will upload the sample data to FineBI. FineBI is a tool that supports integration with multiple data sources, including common databases such as Hsql, IBM DB2, Microsoft SQL Server, MySQL, and Oracle.

Alternatively, you can also access sample data from the conversion analysis documentation and use FineBI's built-in dataset "E-commerce_conversion_analysis" to create analytic reports. Follow the steps to build your conversion analysis effortlessly!

The next step is to conduct a quantitative analysis of the number of users at different stages of behavior, such as webpage visits, adding items to the shopping cart, and completing purchases. The specific behaviors will be determined based on the objectives of your particular business.

As shown in the diagram below, select "+">"Group Summary," and drag the behavior stages into the grouping and total columns. Then, choose "Count" from the dropdown list in the "Total" column.

Add a Summary Column and arrange Behavioral stage1 in descending order to prepare for subsequent data connections, as shown below:

In this way, you rank all user behaviors in sequence.
Add Formula Column, name it Sorting Merge Column, enter the formula Sorting-1 for subsequent join operations, click OK, name the self-service dataset table Conversion Rate Dataset - Preparation, and save it, as shown in the following figure:

Create a self-service dataset and select the self-service dataset created in "Sorting". Click Field Settings and check the fields except for Sorting, as shown in the following figure:

Add Join, select the self-service dataset created in the section "Sorting", check Sorting and Behavioral stage1, and click OK, as shown in the figure below:

Select the merge mode as Full Join, and set the merge basis as Sorting Merge Column and Sorting, as shown in the following figure:

Name the self-service dataset as Conversion Funnel Data and save it.

Now you have got the conversion data at different stages and can obtain conversion rates at different stages by just dividing Behavioral Stage 1 by Conversion Rate Dataset - Preparation - Behavior Stage 1 on the dashboard.

By calculating the metrics, compute the conversion rates at different stages. Divide the number of users who completed the conversion goal by the initial number of visiting users to obtain the conversion rate percentage. Specifically, from the FineBI interface, you need to:

Click Component, click to add a calculation indicator, select Conversion Funnel Data, and enter the formula Behavioral stage 1 / Conversion Dataset - Preparation - Stage 1.
Name the indicator Conversion Rate, and click OK, as shown in the figure below:

Next, you can leverage FineBI's rich charting capabilities and choose to create a funnel chart to visually depict the conversion status and conversion rates at different stages. Drag the Behavioral stage into Color (you can also customize the color), and set the filter condition to Is not empty, click OK, as shown in the following image:

Drag Behavioral stage 1 into Size, and rename it Number. Drag Behavioral stage, Conversion Rate, and Behavioral Stage 1 into Label. Rename Behavioral stage as Final behavior stage and set the color and font. Drag Behavioral stage into Fine-grained and sort in descending order by Number, as shown in the following figure:

Once you have completed the aforementioned steps, you will obtain the optimal view of your conversion analysis. 

Here, we highly recommend trying out FineBI, as it offers a wide range of data visualization capabilities. FineBI comes with 50+ built-in chart types, including customizable options, covering both basic and advanced chart types available in the market. Additionally, FineBI boasts powerful interactive features, enabling effortless implementation of slicing, linking, jumping, and drilling down for dynamic and insightful analysis.

Furthermore, FineBI offers seamless construction of a wide range of classic data analysis models, including the DuPont analysis model and other models like the BCG matrix (Growth-Share Matrix), RFM model, and Kano model, to provide valuable insights for businesses.

Conversion analysis is an ongoing process that requires continuous monitoring of conversion rates, analysis of new data, and iterating strategies to improve results. However, many existing tools lack risk monitoring and historical data analysis capabilities, weakening organizations' risk management.

FineBI tackles this issue by enabling trend lines and alert thresholds in charts, showcasing trends, and alerting exceptional indicators. It also offers scheduled dispatching, notifying users through email, SMS, or platform messages when alert conditions are triggered, facilitating timely analysis and informed decision-making.

Now, you should have a grasp of the fundamentals of conversion analysis! I have also provided a list of frequently asked questions about conversion analysis, just in case you have any other inquiries. Let's dive in and explore!

Conversion analysis enables you to understand the effectiveness of specific actions or activities in converting potential customers or visitors into actual paying customers or achieving desired goals. In other words, it helps determine whether your strategies are effective at critical junctures. By analyzing conversion rates, you can gain more intuitive insights into customer behavior throughout the entire conversion process. This allows you to speculate on the barriers hindering people from converting and identify the points of user attrition, enabling you to focus your attention and address these issues. This is crucial for identifying successful conversion factors, optimizing resource allocation, and improving return on investment.

Overall, increasing conversion rates is the ultimate goal of conducting conversion analysis. Being able to track the conversion process swiftly means missing out on fewer opportunities to generate more revenue. The deeper your understanding of both converting and non-converting target audiences, the more precise your marketing and product positioning can become.

Nevertheless, conversion analysis does indeed have some limitations that need to be considered:

1. Limited Context: Conversion analysis provides valuable insights into specific actions or goals, but it may lack a broader understanding of customer behavior and motivations. It focuses on the result of conversions without necessarily revealing the reasons behind customer actions.

2. Lack of Qualitative Data: It primarily relies on quantitative data, such as conversion counts and rates, which may not capture qualitative data, such as customer feedback or sentiments. This qualitative data can provide a deeper understanding of customer preferences and needs.

3. Incomplete Customer Journey: Conversion analysis often emphasizes the stages leading up to conversion but may not provide a comprehensive view of the customer journey beyond the conversion point. Understanding post-conversion behavior and customer retention is equally important but may require additional analysis.

4. Attribution Challenges: Allocating conversions to specific marketing channels or touchpoints can be complex, especially in multi-channel marketing. Attribution models may not always accurately reflect the true impact of each channel on the conversion, leading to potential inaccuracies in the analysis.

5. External Factors: Conversion analysis may not account for external factors that can influence customer behavior, such as seasonality, economic conditions, or competitive actions. Ignoring these factors can lead to biased conclusions.

To address these limitations, businesses should consider combining conversion analysis with other data analysis methods, such as customer surveys, usability testing, and qualitative research, to gain a more comprehensive understanding of customer behavior and make more informed decisions.

A conversion strategy is a plan to make specific changes to a website or application based on user behavior data. The objective of this strategy is to individually assess and improve each stage of the conversion funnel, thereby optimizing underperforming aspects of the conversion process. Conversion funnels typically consist of three primary stages:

• 1. The top of the funnel represents the initial phase where potential customers conduct research and information discovery.
• 2. The middle stage occurs when potential customers contemplate conversion and evaluate their options.
• 3. The bottom stage is where potential customers are prepared to make decisions and convert.

At each stage, there are various Conversion Rate Optimization (CRO) strategies available to increase conversions, depending on the insights derived from the data.

• Click-Through Rate (CTR)
• Lead Conversion Rate
• Bounce Rate
• Churn Rate
• Form Conversion Rate
• Revenue Per Visitor (RPV)
• Average Order Value (AOV)

Conversion analysis holds significant importance in understanding user behavior and optimizing resources, but without the right tools, implementing it could be challenging. This is where FineBI comes into play, facilitating the process effectively.

By integrating various data sources and visualizing them through interactive dashboards and reports, FineBI allows you to identify factors influencing successful conversions and pinpoint any bottlenecks in the customer journey. The advanced analytical capabilities of this tool also enable in-depth segmentation and analysis of conversion data, helping you understand customer behavior and optimize your marketing strategies accordingly. Embrace FineBI and watch our conversion rates soar, leading to continuous business growth!