What is Conversion Rate Optimization?

What is Conversion Rate Optimization?

Posted on August 25, 2020 Mary Merritt

When "more traffic" isn't the answer.

Being a trusted digital marketing consultant means not being afraid to talk to clients about the good, the bad, and the ugly. Sure, if we're doing a good job sending traffic to your website from various channels, we feel good about ourselves. However, if we're ignoring the website conversion rate in each traffic channel, are we really thinking holistically about the client's goals? If the website is underperforming, is "more traffic" really the answer? No. No, it's not. 

Sending more people to a poorly-performing website or page is definitely not the answer. Especially if you are putting significant time and money into improving your overall domain authority. Every company does conversion rate optimization (CRO) differently, but there are a few basic fundamentals that everyone should follow when starting to run A/B and multivariate tests.

First, what is conversion rate optimization?

To put it simply, it's all about improving your conversion rate. A conversion is a meaningful action that someone can take on your website, and it is usually heavily-involved with the sales funnel. For instance, a newsletter sign-up can be considered a conversion, because you can now market to these folks and pitch your services (and/or products) to them. They have now entered the funnel. Of course a quote request form submission is a great conversion point, mainly because someone who asks for pricing information is further down in the sales funnel than someone who signed up for the newsletter. Other conversion examples are phone calls (call tracking), eCommerce sales, contact form submissions, quote requests, newsletter sign-ups, premium content downloads, and more.

Conversion rate optimization is about improving the pathway to these conversions through regular testing. Let's say that 100 people (unique visitors) came to your website, and only 2 people took a meaningful action. This would equate to a 2% conversion rate on the website. So what happens when you boost your conversion rate to 5% with some testing and tweaking? You just more than DOUBLED your revenue, prospect flow, or lead flow.

Conversion Rate Optimization Example

For an eCommerce website that is getting 100,000+ unique visitors per month, even a half point improvement on the website conversion rate could mean huge revenue returns. Let's say the website with 100,000 unique monthly visitors has a 1% eCommerce conversion rate. See below:

  • 100,000 unique visitors
  • 1% conversion rate (1,000 purchases per month)
  • Average order value of $100
  • = $100,000 in monthly eCommerce revenue

Now let's see what happens when we triple the conversion rate:

  • 100,000 unique visitors (visitor count stays the same)
  • 3% conversion rate (3,000 purchases per month)
  • Average order value of $100
  • = $300,000 in monthly eCommerce revenue

You just TRIPLED your monthly revenue with the same amount of traffic.

What the heck? The next thing you want to do is focus on how to increase your average order value, but that's a different blog post for a different day.

What are conversion rate optimization best practices and principles?

To be honest, this is where the variation starts to come into play. Every company has a certain tool set, a specific set of philosophies, and maybe even processes that have been heavily refined over years! Regardless of the variation in conversion rate optimization services, there are a few things that every CRO test should have.

The test should have a PURPOSE (a reason).

What are you trying to learn? Why is it important to learn it? How will it help you get more conversions in the future once the test is done? If you're putting time into it, there should be solid foundational reasons behind it.

Create a HYPOTHESIS (an educated guess).

Based on data that you've already compiled, you should have a hypothesis for the test. Sometimes you will create a hypothesis based upon your instincts (sans data), but every test should have an educated guess included with it.

Know your test SUBJECT (what you're testing).

Is this a straight A/B test? Or is it a multivariate test where you are testing a few different items on a page? A great example of an A/B test would be button text on your call to action (example: "Schedule a Meeting" vs. "Talk to Sales"), or even button color. The button would be considered the subject in the conversion rate optimization test.

Plan out your SPLITS (who will see the test).

Are you going to run a complete 50/50 split of ALL traffic? Or are you going to take 10% of your overall traffic and run a 50/50 split within that 10%? It really depends on what type of traffic numbers you're pulling in, but having a plan around who will be seeing the test and how the splits will work is important.

Build your test VARIATIONS (different versions).

This is pretty straightforward, but you'll need variations on your testing subject to implement the test. Based on your chosen SUBJECTS, what will the variations look like? A great tool for creating simple A/B tests with small variations is Google Optimize. This is a free tool for now, but you never know when Google might start charging for it!

Plan a TIMELINE (how long to run the test).

Hey, if your website only gets 500 visitors per month — and you're doing a 50/50 traffic split — you might need to run your test for quite a long time to get a large enough sampling (to declare a clear winner). If your website gets 50,000 visitors per month, you might only need to run your test for 1 month in order to get the sampling you need.

Create outcome TASKS (what to do when the test is complete).

After your test is complete, it's important to take action based on your learnings. Did the "B version" of the page have 150% more conversions than the "A Version?" Then switch the page over to your B version and run another test in the next quarter or so.

Conversion rate optimization (CRO) is something that everyone should consider.

There's nothing better than removing subjectivity from conversations with expert CRO. Instead of guessing what works, KNOW what works. Then when you've found something that works better, try to conquer it again and again. Running quarterly tests on your highest-trafficked pages is a great addition to any digital strategy.

Do you have questions? Never hesitate to reach out to us so we can NERD OUT with you.