If you want to understand what conversion rate optimization is, just think about the number of websites you window shop in on any given day.
You open up a website because you see an ad that really interested you. You click around for a while, before exiting.
You might be on a book lending site, and you create an account to see what kind of offers are available. You don’t find anything to your liking so you leave.
A shop recommended by your friend is on sale, so you create an account, and purchase a few t-shirts (well, you promised yourself it would only be window shopping, but it’s on sale- you basically made money on the purchase!).
You probably do this countless times on any given day: what you’re not paying attention to is the fact that each and every step you took in this process would have been recorded as a conversion. In each step, you were stepping closer towards the website’s goal of conversion: whether it was to download a book, or to purchase something from them.
Now, if you’re running a business of your own, and you’re aiming to drive sales through it, you have to pay attention to this path that people are taking, from the moment they enter your site to the moment they take the decision that you need them to take (which would be the point of conversion).
And that’s where the magic of conversion rate optimization lies.
What is conversion rate optimization
In not so simple terms, conversion rate optimization (CRO) is a systematic method of increasing the percentage of visitors accessing your website into taking a desired action. In this situation, you get to determine what the desired action is: depending on the kind of work you’re doing and the kind of visitor, it could be filling out a form, or watching a video, or making a purchase.
Imagine your website is a funnel. You are focusing on increasing the input into this funnel through advertising, SEO, social media, diverse content, and more. Once this mass input passes through the funnel, a certain section emerges on to the other side. These are the people who have been impressed by your website, and have decided to engage with you further. In a way, this is what determines the true success of your business: if all the traffic that is being driven to your website does not result in action (a purchase, an investment, or even a click), then the traffic is worth nought.
In this picture, the CRO is the process through which you evaluate the funnel, and decide to widen it, or make the stem longer. Through this method, you’ll understand and analyse:
- How do visitors come to your site?
- What is the path they take to navigate through your site?
- How many steps do they usually take before they quit?
- What is making them quit?
The Deeper Meanings
Before we go ahead, we need to be clear on what certain words mean, in this situation.
What’s a conversion?
A conversion can be anything that you determine, but broadly, it is what happens when a visitor completes a site goal. If you sell products, this would mean somebody just purchases a product from you. If you’re a consultancy, it would mean somebody came to your site to see the services you provide, and called you for a consultation. If you’re a dinner reservation site, it is the number of reservations you’ve facilitated.
But remember: not all conversions have to be the end-goal for your site. All the examples we mentioned above are a part of your primary goal, and are hence macro conversions. However, as a website, you have to facilitate all the smaller steps the person has to take towards this goal, like just signing up for an account, or adding a product to the cart, or subscribing to an email list. These could count as a micro-conversion.
What’s a conversion rate?
Before you optimize it, you need to know how to calculate it, after all. A conversion rate is basically the number of times a visitor completes your site goal, divided by the total site traffic.
We’ll bite: that is an extremely simplistic way of calculating a conversion rate. There are some variations to this, depending on the kind of website you run:
- When a conversion can occur every time a visitor comes to your site:
If you sell products, it means that a user can convert every time they come to your website.
Let’s say, a visitor came to your site, browsed and left. The second time, they added a product to the card, and the third time, they finally made a purchase. This means that the user took three sessions to make 1 purchase: which would be your conversion rate.
To calculate this number for your entire site, you’d take the number of site goals (purchases) by the total number of sessions.
So, in the past month, if you’ve made 50 sales, and the total session number was 5000, then your conversion rate would be 50/500= 10%.
- When only one conversion is possible per person: Say, you’re a company that offers subscription services to a screenwriting software. A person can come to your site multiple times (maybe to check out your guides, for example), but once they’ve subscribed and installed your software, they’ve been converted, and they can’t have another conversion.
In such a situation, you’d just have to calculate the number of orders you’ve had, and divide it by the number of unique users on your site.
If you’ve received 100 subscriptions, and have 500 visitors, your conversion rate would be 20%.
CRO’s wide(r) impact on your business
Cutting your acquisition rate in half
An important metric of how well your website is doing is assessing how much traffic you’re drawing. However, unless the traffic directly converts into leads or sales for your site, it would not have much of an impact. Hence, it is surprising that for every $92 spent on acquiring customers, only $1 is spent converting them! Why is this bad?
Let’s take the above example a step further: you’ve had 100 subscriptions out of 500 visitors. At $10 a subscription, you’ve made a $1000. Now, you develop and implement a CRO strategy, and you’re able to increase the number of subscriptions to 200 per 500 visitors, giving you $2000 in monthly revenue, for the exact same investment made in SEO!
You see the magic? Investment remains the same, and your sales double. Effectively, the cost per acquisition gets cut in half. If that’s not a valuable goal to work towards, we don’t know what else is!
Better customer engagement
CRO can indirectly impact your SEO strategy and your search engine ranking by fostering a model of better customer engagement. In fact, 70% of marketers feel that CRO can inform the other marketing initiatives run in the organization. In order to develop a CRO strategy, you have to assess the user experience of your website, and enhance the same. Not only will this ease the user’s path through your website, making them feel comfortable and enabled, it will also increase their trust in your business.
How do I get started with the process?
To understand what you should be optimizing on your site, you need to understand the conversion path a customer visiting your site would follow. This is the lifecycle of an anonymous user entering your site, and leaving as a valuable fiscal lead that has engaged with your site, and has had a need fulfilled. Each step of the path is a micro-conversion, so it gives you a complete and thorough breakdown of each touch-point on your website, so you can develop a CRO strategy that applies across each step.
We know: this is definitely a long term task, one that requires significant investment (both in terms of time and effort). This is where the conversion path can come in handy: this is why 60% of online marketers have included conversion path analysis in their game plan! Used effectively, it can be a tool that allows you to answer certain significant questions about your website, especially:
- What problem/lack am I addressing with my site (information, product, service, advice)?
- What do I want people to do on my site, to get this?
You’ve done it. You’ve answered the hard-hitting questions. You have a clear idea about what your website is providing, and you know what you want people to get out of the site, at each level of the conversion path.
But, how do you find out what the customer is feeling on each step? How do you determine which brick in the path led to the final conversion? There are two ways of finding the answers to this question, through quantitative data & qualitative analysis.
Using quantitative data and analytics
Significant amount of quantitative data is collected through the analytical software attached to your website. This data will allow you to assess important factors about how users access your site, including:
- What’s the most popular landing page
- What features/tools do they engage with the most
- What’s the referral path?
- What device was used to access the site
- What’s the demographic breakdown of your users
- At which point the users drop off the conversion funnel the most
This data will show you the leaks in your funnel, and also shed light on the pages that have had the maximum conversion, so you can leverage the same.
Qualitative user information
The quantitative data will tell you where people are going and how, but it won’t tell you why. After all, that’s the most elusive part of marketing, isn’t it: why our customers choose to take certain decisions. This is where a user focused qualitative user research would come in handy. You can choose a random sample of your site’s users, or do a targeted research among your ideal demographic. This will help you find out several significant data points:
- Why a customer chose to engage with your website
- Why they chose to convert at a particular step in the conversion path
- Why they differentiated you from the competitors
- How they have engaged with your site since
This information will help you understand the user experience for the site better, and also help you drive targeted content and conversations about the facets of your site that are user approved.
You can gather this information from your users through on-site surveys, user testing, or even through mock-testing. There are several valuable tools for this- we’d recommend Qualroo, and UserTesting.Com.
Testing your CRO strategy- The 4 Key Elements
Now that you’ve done your background research, and you know which parts of the conversion path you want to optimize, it’s time for you to put together your first CRO strategy. There are countless methods you could use to put together a strategy (stay tuned for our detailed article), but each strategy will have four key components:
Establishing a buyer persona
By using the quantitative data and the information gleamed from the qualitative research, you can get a solid and detailed idea about your buyer persona. This would include their goals, their needs, their selling points and pain points, their demographics, their budget, etc.
Establishing your goals
What do you wish to achieve from this CRO strategy? What kind of marketing goal do you want to achieve, and what kind of customer do you want to achieve it from? How will I measure these goals I have set?
Establishing hypothetical solutions
Now that you’ve established a buyer’s persona that is based on research, you should be able to put together several working solutions. These solutions would address the goals, needs, pain points, and selling points of the buyer, so that they are pushed towards conversion.
This will help you develop the content, targeted pages, and designs that you can test on users.
Record and Repeat
Once you’ve developed your hypothetical solutions, you should be able to run them on the site, and analyse the impact it has on your marketing goals. Record the results of each test, so you can continue to apply what worked, and change what did not!
Conversion rate optimization, in simple terms, is the best way of making sure that you get what you want, and that your clients get what they want, while saving time and money for both! Depending on the kind of business you run, you can follow different CRO strategies, which will all cut down the cost of acquisition for your business, while enhancing user experience & increase your sales!
The only question is: where are you going to start?