Attracting prospective customers to your site is challenging enough, but what do you do if all that hard-won traffic under-delivers on conversion? Understanding conversion rates and how to optimise them can hold the key to unlocking huge gains at relatively little cost. Let’s dive into what CRO can do for your bottom line.
Conversion rates can seem like a dense and impenetrable topic, full of technical terms and abstract concepts that have little to do with the real-world work of marketing. Nothing could be further from the truth.
Understanding what conversion rates are and how they affect your business can reveal new insights into your marketing efforts and point you in the right direction when it comes to converting your most valuable audiences into customers.
What is 'conversion rate'?
To provide some context, a conversion is when a visitor to your website completes a desired goal, such as filling out a form or making a purchase.
Depending on your site's or business's goals, conversion types might include:
- Online sales
- Email signups
- Form completions
For eCommerce sites, an online purchase is typically considered to be a conversion. The conversion rate is simply how many conversions took place in a given period of time.
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This makes it a handy metric for tracking how well your website is performing when it comes to converting visitors into customers.
There's more to your conversion rate than meets the eye
While it’s easy to obsess over your CR, a conversion rate alone doesn't give you the entire picture. A 20% conversion rate may look better than a 10% conversion rate, but closer examination may reveal that you could be generating more revenue from the 10% conversion rate.
That’s because conversion rate doesn't take into consideration a customer’s order value or total spend.
There will also be users visiting your site without the intent to purchase, so the CR needs to be evaluated in the right context.
With that caveat, there are still immense benefits to be gained from optimising your conversion rate.
Why optimising your conversion rate is important
Conversion Rate Optimisation is a greatly overlooked tool in today’s marketing mix. It flies under the radar of many marketers, assumed to be too technical or non-essential.
But marketers who choose to invest in CRO can gain some major benefits at a comparatively low cost. Let’s take a deeper look into what CRO can do for your ROI.
Image credit: forbes
1. CRO boosts your sales
By optimising your website’s conversion rate, you can shorten the time from lead to purchase, making your site not only more audience-friendly but also more efficient. By reducing barriers to purchase, you can expect higher sales from the same number of visitors, resulting in a healthy ROI boost.
Nature Air, an airline based in Costa Rica, saw conversions rise from 2.78% to about 19%, just by optimising their landing pages.
2. CRO lowers your cost per lead
If you use paid advertising, you can expect a better ROI from your ad spend. By optimising all your site elements and ad-to-page pairings, you’ll see more conversions from the same amount of traffic. That means you will have lowered your cost per lead, improving profitability.
Image credit: Genius eCommerce
3. CRO can help win over customers from your competition
“Blindly mimicking another company without understanding that principle will waste your time and your precious traffic.” – Alison Otting
Learning from the best practices of your competition is always good, but the goal should be to surpass them.
CRO can help you do exactly that. When you carry out CRO on your website, your brand will not only look more professional and credible, the polished design and smooth user experience will help position your brand as an authority in your field.
If you were a customer, who would you prefer to buy from? A slow, clunky website that makes you jump through hoops to make a purchase, or a polished, professional brand website that makes shopping super-convenient?
With your CRO improvements, you can look forward to winning over more customers and market share as well.
4. CRO creates incremental returns that add up over time
Since CRO is an iterative process, every change you make to your site will deliver an incremental improvement. These improvements will compound over time and can deliver a substantial return over a given time frame.
To illustrate this point, let’s say you were an eCommerce retailer who improved your conversion rate by 1% through CRO.
That additional 1% of revenue will keep rolling in day in and day out. If you have a high volume of sales, that 1% can mean thousands of extra dollars in revenue over the course of a year.
That's how Protalus footwear used CRO to increase their direct sales by 91% over 6 months.
Image credit: Marketing tech
5. CRO can increase your Customer Lifetime Value
A website that delivers a positive user experience to a customer is one that keeps customers coming back. That means any business that relies on repeat customers should take their CRO very seriously.
Research from KPMG revealed that 30% of customers said that they’d prefer to buy from a website they’ve already bought from previously.
That means your CRO efforts directly impact customer loyalty and repeat purchase, and by optimising correctly, you can look forward to a marked increase in customer lifetime value.
Remeber, CRO is an ongoing process
Though CRO can have a big impact on your ROI, bear in mind that it does take a lot of work, especially when you’re starting out. Having a clear strategy and well-defined goals is essential to getting the most value out of it.
But once you have the data you need, you’ll be able to generate a lot more sales and dominate your category.
Also, it’s important to understand that CRO is a continuous process. You’ll need to keep tweaking, testing, iterating and refining your optimisation efforts to reap all its rewards, but the payoff can be tremendous.
We hope you enjoyed our discussion. If you have questions about what CRO can do for your business, questions about eCommerce strategy, or questions about what whales have to do with marketing, then get in touch with us and let’s find the answers together.