Quick Overview: Conversion rate optimization (CRO) is the process of increasing the percentage of leads/visitors that take a desired, lucrative action when subjected to a marketing campaign. For instance, CRO can increase the number of website visitors who make a purchase or sign up for a newsletter.
Learn more about CRO and the techniques involved that it entails in the post below.
Understanding Conversion Rate
Before we talk about conversion rate optimization, we first need to understand what conversion rate is.
Conversion rate is the percentage of people who view a piece of marketing material and take the action required by the marketer, as opposed to the people who don’t.
Nowadays, many times when people talk about conversion rate, they refer specifically to it in the context of websites and online visitors.
For instance, if 100 people visit a website or view an advertisement, and 20 of those people decide to give the company a call or make further investigations (i.e., which is the desired action), then the conversion rate is 20%.
The formula used for conversion rate calculation is simple:
Conversion Rate = (Total Number of People Who Took Desired Action/ Total Number of People reached) × 100
Conversion Rate as a Performance Metric
The conversion rate is used as a metric to measure how effective a certain marketing campaign is.
In the online world, it is used as a metric to measure how well-built and customer-centric a website is.
If the conversion rate of a marketing campaign is low, it means that it is reaching people, but it’s not effectively supporting lead generation.
In the same way, if the conversion rate of a website is low, it means that the website isn’t catchy enough, descriptive enough, or encouraging enough for the user to take action.
Understanding Conversion Rate Optimization (CRO)
Now let’s come back to CRO.
Improving conversion rate is key to improving customer engagement, revenue generation, customer satisfaction, and ultimately, brand growth. The process in which conversion rate is improved is known as conversion rate optimization.
Brands invest heavily in CRO because it provides a multiplied ROI (return on investment). For example, a brand can invest $10,000 in CRO, which can lead to a 5% increase in their conversion rate, which can then translate to profits that far exceed their initial $10,000 investment.
Unlike other marketing “boosts,” CRO is more lasting as it is applied to your existing marketing methods and materials.
What are the Main Steps of CRO?
The main steps involved in CRO are mentioned below:
- Evaluating the existing marketing materials/website design/app design (i.e., whatever is being subjected to the CRO campaign)
- Identifying weak areas in the existing materials
- Creating ideas for improving the existing materials
- Performing A/B testing to find which ideas work best
- Applying the best ideas to the actual environment
Example of Conversion Rate Optimization (CRO)
The steps we mentioned above are quite general. To understand them better, let’s look at an example.
Let’s say a clothing brand called StyleHub runs an online store. Their website gets 10,000 visitors per month, but only 150 of them make a purchase, giving them a conversion rate of 1.5%.
Unhappy with this number, StyleHub decides to launch a CRO campaign. Here’s how the steps play out:
- Step 1: Evaluating the existing materials: StyleHub’s marketing team thoroughly reviews the website. They look at page load speeds, the checkout process, product pages, calls to action, and overall user experience.
- Step 2: Identifying weak areas: The team identifies three main issues. First, the website takes over 6 seconds to load, which causes many visitors to leave before even browsing. Second, the checkout process requires users to create an account before purchasing, which is a well-known conversion killer. Third, the product pages have low-quality images and lack detailed descriptions.
- Step 3: Creating ideas for improvement: The team brainstorms fixes for each issue. They propose compressing images to speed up load times, adding a guest checkout option, and hiring a photographer to reshoot all product images alongside writing better descriptions.
- Step 4: Performing A/B testing: Before applying all changes to the live website, StyleHub tests them on a portion of its traffic. Version A is the original website, and Version B includes all the proposed changes. After 30 days, the data shows that Version B consistently outperforms Version A across all key metrics.
- Step 5: Applying the best ideas: StyleHub rolls out all the changes to the full website. Within two months, their conversion rate climbs from 1.5% to 3.2% — more than doubling their monthly sales without spending a single extra dollar on advertising.
What are Some Common Techniques Used in CRO?
CRO campaigns are often customized specifically to a brand based on its current standing and its goals. However, there are some common techniques that can be found in most CRO campaigns. Here are a few:
- A/B Testing: A/B testing is a technique is which two versions of a webpage or element (headline, button, image) are compared to see which one performs better. It is one of the most fundamental CRO methods.
- Improving CTAs (Call-to-Action): CTA improvement involves optimizing the wording, color, size, and placement of CTA buttons to make them more compelling and clickable.
- Landing Page Optimization: This technique involves refining landing pages to ensure they are focused and persuasive. This is done by removing distractions and aligning the page with what brought the visitor there.
- User Experience (UX) Improvements: Making the website easier to navigate, faster to load, and more intuitive, reducing friction that might cause visitors to leave without converting.
- Social Proof: Social proof is third-party proof that shows the reliability and credibility of the brand. Adding testimonials, reviews, ratings, case studies, or trust badges are common ways to display social proof signals.
- Heatmaps & User Session Recordings: This involves analyzing where users click, scroll, and drop off to identify problem areas and opportunities on a page.
- Personalization: Personalization involves tailoring content, offers, or recommendations to specific user segments based on behavior, location, or demographics.
Why is Conversion Rate Optimization Important?
There are many reasons why CRO is very important for businesses. Among them, three stand out as the main ones. We’ve listed them below:
- CRO Gets More Value Out of Existing Traffic: Rather than spending more money to attract new visitors, CRO focuses on converting the visitors you already have. It is a more cost-efficient way to grow revenue.
- CRO Improves Return on Investment (ROI): When more visitors convert, every dollar spent on marketing, ads, and content goes further. Your existing budget simply performs better.
- CRO Lowers Customer Acquisition Costs: As your conversion rate improves, the cost of acquiring each new customer drops, because you are getting more conversions from the same amount of traffic.
Wrapping Up
Conversion rate optimization (CRO) is very important and beneficial for businesses. It helps them grow their revenue, improve customer loyalty, and decrease customer acquisition costs.
CRO is performed by specialists who evaluate the initial standings of the brand and its website. It is often a long process involving testing and experimentation before a course of action is finalized.
