Conversion Analysis in SaaS: Why Is It Important & How To Conduct One?
Wondering how you can use conversion analysis to optimize your user funnels and increase conversions?
In today’s article, we’ll talk about what conversion analysis is, and its benefits. You will also know how to conduct a conversion analysis in 8 steps, and 3 of the best tools that can improve conversions and boost your product growth.
Ready to get started? Let’s go!
- Conversion analysis is a method to track your customers’ actions to see whether they will do what you expect them to do (convert) or drop off.
- The benefits of conversion analysis include understanding your customers on a deep level, identifying the drop-off points in the conversion funnel, lowering customer acquisition costs, and increasing the lifetime value.
- You can measure different conversions, such as the Visitor-to-Signup Rate, Signup-to-PQL Rate, PQL-to-Customer Rate, and Signup-to-Customer Rate.
- There are eight essential steps for conducting a conversion analysis correctly.
- Defining your business objectives and selecting conversion events.
- Understanding the customer journey and mapping out all touchpoints.
- Tracking in-app interactions and identifying the main drivers of conversion.
- Combining heatmaps with session recordings to determine the drop-off points.
- Creating events and tracking both macro and micro conversions.
- Segmenting customers based on product usage and identifying usage trends.
- Choosing an analytics platform and building conversion analysis reports.
- Running A/B tests to evaluate and optimize the conversion rate.
- Three must-have conversion analysis tools to analyze data and drive conversions are Userpilot, Hotjar, and Mixpanel.
What is a conversion analysis?
Conversion analysis is a means of tracking your customers’ actions to see if they do what you expect them to do, i.e., convert or leave.
Conversion analysis assists you in determining which types of users and behaviors correspond to conversion, as well as when and where people fail to convert.
What are the benefits of conversion analysis?
Here are three benefits of conversion analysis.
Understand your customers on a deep level
Conversion analysis helps you understand your customer’s behavior. It allows you to get powerful insights such as:
- why they use your product and what they hope to accomplish.
- how they use your product.
- whether or not your product is meeting user requirements.
Identify the drop-off points in the conversion funnel
Secondly, it helps you identify the friction points that block them from advancing in the buyer’s journey. This allows you to pinpoint where in the funnel users are dropping off the most.
When you identify issues, the next logical step is to solve them. This will help you improve customer experience and drive more conversions in the future.
Lower customer acquisition cost and increase the lifetime value
Lastly, by analyzing conversion and optimizing it, you can significantly decrease your Customer Acquisition Cost (CAC), while simultaneously increasing their Lifetime Value (CLV).
How to analyze conversion rate?
As shown in the image below, there are different types of conversions that you can track.
To get the conversion rate for any desired conversion, simply divide the number of users who performed a specific action by the total number of users, then multiply the result by 100 to obtain the percentage, which is the conversion rate.
For example, if you had 500 new web visitors and 150 of them signed up for a free trial, your visitor-to-signup rate is 30%
Conversion analysis process: How to do it right?
Here are eight steps you can follow to conduct a conversion analysis.
Define your business objectives and select conversion events
Before you start conversion analysis, you must define your objectives clearly and select conversion events. Your goals serve as benchmarks. They help you understand whether or not you’re on track and how far away you are from your target.
Conversion events can be of two types: micro and macro.
Micro conversions: Interested people visiting the pricing page, requesting a demo, signing up for a free trial, or completing tasks in an onboarding checklist are examples of micro conversions.
Macro conversions: Users completing the whole checklist to reach the activation stage, converting from a free trial to a paid plan, upgrading the account to access pro features, reaching complete product adoption, and reviewing your product are examples of macro conversion events.
Understand the customer journey and map out all touchpoints
After defining your goals, your next step is creating a user journey map that lists all the touchpoints and events a user needs to go through. This allows you to track conversion data accurately and determine where customers drop off.
For a SaaS product, a typical user journey map is a visual representation of every interaction a customer has with the company and software. Typically, user journey maps include customer actions, touchpoints, pain points, and emotions.
Track in-app interactions and identify the main drivers of conversion
Tracking customer interactions within your product is a great way to collect data for conversion analysis. It helps you understand what users are doing with your product, the most and least used features, app opening frequency, etc.
It enables you to detect usage trends between your customers and determine what aspects of your product drive the most conversion.
With Userpilot, you can easily track different kinds of product interactions, such as clicks, hovers, and texts. You can even tag features to monitor feature usage and improve your product design elements significantly.
Combine heatmaps with session recordings to determine the drop-off points
Heatmap is a color-coded visual that helps you identify areas of high and low engagement in your product.
It shows where users click, tap, and scroll, helping you understand which specific parts of your product users interact with the most. It also enables you to identify where users are dropping off the most.
Session recording allows you to monitor exactly how the session of a website visitor went. When combined with heatmaps, you get to develop a clear picture of what users are doing on your website/app.
Create events and track both macro and micro conversions
You can set up milestones or conversion events to track both micro and macro conversions. These help you keep an eye on event occurrences, track their completions, and detect event trends. You can then use the data to dive deep into conversions.
With Userpilot, you can get an overview of total event occurrences, active companies, users, etc.
Segment customers based on product usage and identify usage trends
With Userpilot’s powerful segmentation, you can analyze your customers by their behavior, feedback or activity, and segment them to create a more effective marketing strategy.
By creating precise segments based on their engagement and product usage, you will understand your customers better and will easily identify what segments drive more conversions. This will allow you to understand the reasons behind that so you can work towards increasing conversions of other segments as well.
Userpilot allows you to segment customers by different attributes, such as user data, company data, customer feedback, features, events, etc.
Choose an analytics platform and build conversion analysis reports
You need a method to collect and aggregate your data for successful conversion analysis. Doing it manually is far too time-consuming. It also requires the knowledge of data engineers and analysts, which may not be available on-site.
A third-party analytics platform is a much easier solution.
After you’ve selected a tool, maintaining your data and creating reports with them becomes a breeze. Remember that the data must be presented in such a way that all stakeholders and decision-makers can understand the findings.
Another useful reporting feature is customization. Being able to parse and display the data in different ways can help you get more out of the information and focus on specific details.
Run A/B tests to test and optimize the conversion rate
Once you’ve analyzed your data, you’ll want to test the data with A/B testing so you can optimize the conversion rate. A/B testing allows you to compare two different alternatives.
For example, you can compare different marketing campaigns, user interfaces, landing pages, or pricing strategies.
With Userpilot, you can build A/B tests easily to compare and analyze how different product experiences would impact your users.
3 must-have conversion analysis tools to analyze data and drive conversions
Finally, let’s take a look at 3 of the best conversion analysis tools in the market.
Userpilot – for tracking in-app interactions and real-time analytics
Userpilot is currently one of the best tools in the market for collecting conversion data. It has a lot of intelligent features, such as feature tracking, advanced customer segmentation, custom goals and events creation, A/B testing, and an in-app interaction tracker.
With its real-time analytics, you can understand the impact of your decisions live, enabling you to take quick actions using relevant customer data.
With Userpilot, you can also create flows based on custom settings and event occurrences. You can trigger in-app experiences in real time that help you increase engagement with more users.
You can choose from 3 different Userpilot subscription packages:
- $249 for Traction
- $449 for Growth
- $1,000 for the Enterprise package
Feel free to sign up for a demo if you’d like to give it a shot!
Hotjar – for creating heatmaps and tracking user behavior
Hotjar is a customer analytics tool with two major functions: Observe and Ask.
Observe features heatmaps and session recordings. Heatmaps allow you to see which aspects are most appealing to consumers and which elements are most ignored.
Session recordings show you exactly what your users see, allowing you to map out the entire user journey in great detail. You may also use other filters to organize your data and identify churning and repeat consumers.
It offers three different monthly packages starting from $0, $39, and $99.
Ask allows you to collect live feedback with context, which helps you understand what your product’s users think. You may send surveys to users whenever necessary and collect as much data as possible by using on-site and external questionnaires.
It also has three packages starting from $0, $59, and $79.
Additionally, you can choose a custom package that combines both Observe and Ask. All options include a custom plan upon request, along with a free trial.
Mixpanel – for detailed product analytics and funnel analyses
Mixpanel is a robust product analytics platform that uses interactive insights, retention, and funnel reporting to help you convert, engage, and retain users. It allows you to thoroughly assess your sales funnel and identify areas for improvement.
It also includes team dashboards and alerts, limitless segmentation, group analytics, data integration, data management, and other capabilities. All of this provides insights into your product’s usage, as well as where and why users abandon it and who your greatest customers are.
It has three subscription plans:
- Growth (from $25 per month)
If your conversion rate is low, you are likely struggling to keep your acquisition costs down. And without conversion analysis, you can’t measure the efforts your product team is putting to acquire customers and convert them into repeat, loyal customers.
Want to track in-app user interactions, and monitor their behavior for conversion analysis? Get a Userpilot Demo and see how you can significantly boost conversions, grow your product, and deliver a greater customer experience.