Who better than a scientist to come up with the best definition of conversion rate optimization ever? Read on. Be the Judge.
What exactly is conversion rate optimization? You’ve read about it over and over, but you may not have a proper understanding of how to apply it to your ecommerce store or to your online lead generation efforts.
Today we will cover not only the best definition of conversion rate optimization ever written, but its benefits and impact on profit. Plus, best practices and how and where to learn CRO. We’ll also answer some of the most frequently asked questions on the topic.
What is Conversion Rate Optimization or CRO?
Conversion rate optimization, or CRO, is the process of maximizing the value you get from every visitor you bring to your website.
The value you get from every visitor is expressed as a rate – the famous “conversion rate“.
And the reason it’s called conversion “rate” optimization is that, in general, we are trying to increase the rate at which site visitors become buyers, subscribers, leads or callers.
Now, most people believe their website only has one conversion rate. The truth is, it has several. Therefore, conversion rate optimization, or CRO, attempts to improve each of these conversion rates – either by increasing value or reducing the associated costs (e.g. ad spend).
How does this process work? CRO is the process of making changes to a website, and measuring how those changes increase or decrease the conversion rate.
To accomplish this, we use data to understand how changes to your website affect the behavior of visitors and measure conversions.
Let’s dive in a little deeper.
The Applied Definition of Conversion Rate Optimization
The number of potential customers, visitors or traffic we get to our site will grow, decrease or fluctuate over time. It is generally believed that the rate at which these visitors convert will be more consistent over time than changes in traffic.
This is only partially true.
For example, you may decide that your home page will be better if you put images of your products near the top of the page. You can make this change and see if you get more sales.
But what if traffic decreases on the day that you make the change? You would get fewer sales due to the lower traffic, and it may look like your change was to blame. The percentage of buyers – the conversion rate – may have gone up. But lower traffic caused the total number of conversions or transactions drop.
Let’s assume you make a change to your site the night before Black Friday – the biggest shopping day of the year in the US. And you get a massive increase in sales. You might think that your conversion optimization change was the reason for it. But it was the market that changed.
“Hidden variables” – changes in traffic, in your competitors’ offers, changes in your advertising – can lead you to make bad choices. Fortunately, we have a complete set of methods and disciplines to ensure we don’t make bad decisions as we find out what our customers really want from our website.
Why is Conversion Rate Optimization Important?
As the digital world grows, it becomes harder and more expensive to attract visitors to your website. Organic traffic requires an investment in infrastructure and content. Advertising prices are rising on each new platform: Google, then Facebook, then Instagram, then…
Getting value from this hard-won traffic is the key to sustained online growth. Extracting value means converting visitors to email subscribers, leads or shoppers who add something to their carts or to return customers.
Finally, we want to eliminate those visitors who would not use your solution or buy from you because they cost resources.
In every case, the relationship changes. It converts to something new, and this is a conversion. Our goal with conversion rate optimization is to maximize the percentage of visitors that we convert into customers, and therefore grow our online business.
Benefits of Conversion Rate Optimization
The first benefit of conversion rate optimization is generating more revenue from your website’s current traffic. The second benefit is increased conversions, maximizing ROI, ROAS, cost reduction, and cost streamlining. But this is only the beginning.
A good conversion rate optimization program will also:
- Get more visitors to return
- Get more customers to buy again
- Tell you what your best visitors want – and don’t want
- Help you understand the different kinds of visitors to your site
- Get your customers to advocate for your business
The data you gather about the people coming to your website is a massive competitive advantage. One that you can leverage for on-going growth and higher customer satisfaction.
Conversion Rate Optimization Best Practices
Every successful conversion rate optimization program starts by collecting data and generating hypotheses to evaluate and test. Of course, at Conversion Sciences we have been coaching, writing how-to guides and defining CRO best practices for decades. Here are a few to get you started:
- 20 Landing Page Best Practices to Kickstart Your Conversion Lift
- Mobile Call-to-Action Buttons: Best Guidelines for Placement, Copy and Design
- 46 Conversion Rate Optimization Hacks
Is Conversion Rate Optimization for eCommerce the same as it is for Lead Generation?
The CRO process for ecommerce sites is exactly the same as it is for lead generation websites. It is based on a scientific method and it is designed to keep us from making bad decisions based on a small amount of data that may seem sensible.
Whether you are optimizing for an ecommerce store or for a lead generation site, your questions are the same:
“How much revenue am I generating from the visitors to my website?”
The way you measure success is different for lead generation and ecommerce sites. So, this requires a change in the way you calculate value.
For an ecommerce site, calculating value is easier than for a lead generation site because the transaction happens on the actual website. So, it’s very easy to attribute a visit to an ecommerce transaction. Besides, a visitor can complete a transaction in one visit. You measure value instantly based on the amount each person purchases.
For a lead generation website, the sale happens at some point after the visitor has left the website. You only know the true value of a new customer later, and often the sale happens over the phone or in person.
When we make changes to an ecommerce website, we can see the results almost instantly. However, changes made to a lead generation website may drive more leads, but are these leads as good? Are they turning into customers at the same rate? To answer these questions, a bit more work is required to value leads than buyers.
What Scientific Knowledge is Fundamental to Conversion Rate Optimization?
Analytics. Scientific method. Statistics. This is the fundamental knowledge you should have. Or learn. Or hire.
Sometimes, analytics isn’t enough. In this case, we need to figure out how to generate the data we need. This can be done by conducting experiments. We devise a hypothesis, figure out how to test it, and then run the test until we have some statistical confidence in the data.
The biggest obstacle to a high converting website is sitting between your ears. Our brains are festering lumps of bias.
We tend to make decisions in our daily communication projects based on what we think is effective. Not on what our audience actually wants. We tend to call “effective” those things that match our preconceived notions. What we’ve seen most recently. What matches our most emotional events – big wins and big losses.
Confirmation bias and availability bias blind us to what our audience is really telling us. The conversion rate optimization process is designed to prevent these biases from influencing our decisions.
To do this, we rely on data and experimentation.
The other important thing you need, besides scientific knowledge, is curiosity. If you aren’t curious, you probably won’t care enough to take time to experiment, to feed your curiosity.
Where can I learn Conversion Rate Optimization?
Everyone learns differently.
If you are new to conversion optimization, I recommend my book, Your Customer Creation Equation.
Some prefer to learn by reading and studying. We’ve tried to make sure that our website is a reference that answers the questions that will come up as you explore conversion optimization.
If you’re like me, you prefer to learn from specific examples and then generalize the learning. This is the mark of a highly intelligent learner. I espouse this process in my online courses, which are geared toward self-teachers. I use video and examples to illustrate larger concepts.
Ultimately, your web visitors are unique. They are unlike any other audience, even your direct competitors. The best lessons you will learn will be found in trying new things, measuring precisely and improving your conversion rates.