Before we did deeper into the befits and methodology of CRO, we should define what is meant by conversion rates. Conversions come in many forms, and are essentially any action that you wish a visitor to your site to take.
An action may be to buy a product, or it could be to make a phone call, make a booking, fill in a form, visit your office, shop at your store, share a link, join a mailing list, subscribe to your social media channel, or spend a minimum amount of time on a page to read its content.
Each of these actions will have a value to your business, and so generally the more people who act, the better. The percentage of people who take a specific, desired action define your conversion rate for that action.
For example, if an average of one in every hundred people who visit your site makes a purchase, then your sales conversion rate will be 1% (on the lower end of average, but far from uncommon).
If you are paying $1 to get a single lead to your site, then you are paying $100 for every hundred visitors. And, at 1% conversion rate, that means your customer acquisition cost is $100. Therefore you need to be making at least $100 profit for a typical transaction; otherwise you are losing money.
If we could increase your conversion rate to 2%, then not only would you double your sales, you would also be paying only $50 for each customer. That’s a big double win!
If we were to double the conversion rate again to 4%, then you would be making four times your original number of sales (all for the same ad spend). Plus, you would be paying a mere $25 to acquire each customer.
Of course, you can’t keep doubling your conversions forever, but is it realistic to at least quadruple your current conversion rate?
Very possibly. It all depends on how well your site is currently converting, which industry you are in, the size of your potential market, along with several other variables.
But let’s say you only increased conversions from 1% to 1.5%; would that be worth the effort? If you are currently making $8,000 monthly profit, then you would see an increase of OVER $4,000 extra per month – much less than the cost of the CRO.
Why will your profit increase more than conversions? Because your fixed costs (such as staff, rent, bills etc.), along with your ad spend, have stayed the same. Often if a business is currently breaking even, then an increase in conversions is all it takes to make it profitable.
Even the most well-designed websites usually have room for improvement. And, if you are getting a lot of visitors to your site, or sell a high ticket item, then even a small improvement can add significant cash to your bottom line. (Perhaps why many large companies continue to implement CRO years after first using it.)
To get some idea of how your much your conversion rate could improve your profit, test out our marketing ROI calculator.
So, how to optimise your conversion rates?
As I said at the start, conversion rate optimisation is a systematic process. At its core, CRO requires testing change after change to see if you can keep making incremental improvements over time. Sometimes a change may take reduce conversions; sometimes you will get a small improvement; other times you may get a large improvement.
As long as you always test and track each change, you will know if you made an improvement or not. If not, keep with the previous version, and then test something else. Each improvement is compounding on the last, and so it does not take too long before you start seeing some significant results.
There are endless opportunities of things to test and improve. Some good places to start are headlines, page layouts, colours, messaging, usability, images, videos, call to action, etc. Generally, we recommend testing one at a time so you can see which specific changes have worked, and which did not.
To help decide where to begin, you can run some simple usability tests. Check how users interact with your website, and run questionnaires to see where they got stuck, what their understanding of your business is (often very different than you hoped), and find out what questions they had which were not answered.
Conversion rate optimization is an incredible strategy that few businesses employ, yet most will benefit from. As we always say, it is usually easier to double your sales by doubling your conversion rate than doubling your traffic – and it is usually a whole lot cheaper too!
If you would like to find out how much your site may benefit from CRO, drop us a line and we will be happy to take a look.
Remember … Tweak, Test, Track and Repeat.