If you’re into conversion rate optimization (CRO) you may be wondering: Will 2011 be the year that CRO finally gets the respect and widespread implementation it deserves? My considered answer? Yes! Why? Because the numbers have become too compelling to ignore.
What follows is an edited version of an article I wrote earlier this month for Search Engine Watch.
Online marketing experts have been talking up the benefits of conversion rate optimization for years but many companies still lack a CRO-friendly culture of testing and optimization. Sure, a lot of companies start the year out with CRO high on their list of priorities, but then something more exciting comes along. It could be mobile marketing or social media. It might be a recommendation engine or customer reviews. All are powerful tools worthy of attention, but somehow CRO gets moved down the priority list. Yet in reality any kind of digital marketing is going to waste some amount of the money you spend on it if you are not optimizing conversion. Consider the primary factors determining website ROI:
- Traffic
- Conversion rate
- Average order value
- Margin
The way of the CRO says that increasing the conversion rate is not only the cheapest option for increasing website ROI, it’s also the most productive. Think about which of these two paths to doubling site revenue would be cheaper:
- Double the traffic.
- Double the conversion rate.
Suppose average visits per month have been running around 300,000 and the current conversion rate is 3 percent. Choosing the first option means you need 300,000 more visits; the second option means boosting the conversion rate to 6 percent.
Now think about the new CRO tools that have been developed, and the many CRO lessons that have been collectively learned, during these last few years, years in which CRO has been poised to become mainstream. Today I think you could hit that 6 percent target for an investment of about $12,000 per month. You would spend that money on the right combination of software and staff, staff that doesn’t have to be 100 percent allocated to CRO. Do it right and you could really move that conversion needle.
Now, do you think you can get 300,000 more visits to your site for $12,000 per month? I will do the math for you: That’s $0.04 per visit.
Bear in mind that, in order to double revenue, this new traffic needs to convert as well as your current traffic. Sure, you can find some obscure long tail keywords in Google AdWords for $.05 a click, but getting good traffic for $.04 per visit strikes me as near to impossible (please feel free to leave me a comment if you think otherwise).
Also bear in mind that, depending on how you monetize traffic, a significant portion of your site’s revenue is from repeat traffic (less so for lead generation sites, more so for retail, and so on). A good CRO program will not only increase conversion for first time visitors, it will also foster more frequent buying from loyal customers.
Conversion rate optimization is about making sure visitors get what they came for, presenting content relevant to whatever brought them to the site, and not distracting them from the frictionless path to conversion that your diligent testing has designed for them, easing them smoothly through to the checkout page, form submission, download, or whatever event you’re striving to make happen.
That’s why sites like QVC.com and OfficeDepot.com regularly achieve conversion rates above 18 percent. And guess what? The things that deliver conversion are also things people like, such as convenience. Happy, converted visitors become customers. They come back. They trust you. They open up to your suggestions. And that means you can keep growing the average revenue per session number. Happy customers also tend to talk about their experiences. They share on social sites. They drive more traffic to your site.
So the money you budget to get your conversion rate to 6 percent could get you even further. And unlike buying fresh traffic at X pennies per hit, there’s really no incremental cost involved in CRO once you have a testing and targeting program in place on your site and embedded in your organization.
This time last year, my good friend Bryan Eisenberg wondered if 2010 would be the year that CRO was fully embraced by online businesses. By the time he was speaking at eMetrics in May, he was acknowledging that social media had distracted a lot of people from CRO.
Social media is a terrific tool for growing your business online. However, without a culture of testing and optimization embedded within your organization, whatever results you get from social media are bound to be less than if you work on social media with that culture in place. And the low hanging fruit in social media is disappearing fast.
As with any channel that is new, like email and a web presence once were, you’ll eventually have to work smarter and smarter to get good results from social media. For “smarter and smarter” read “optimized.”
And lets face it, CRO more than pays for itself. Even if you don’t double conversion rates across the board, when wielded wisely, CRO tools and expertise will positively impact a whole bunch of your key metrics, from AOV to RFM, from email list size to social media buzz. I say the year of the CRO is here. Let the optimizing begin!
Visit Search Engine Watch for more articles on conversion rate optimization and check out Monetate’s many CRO-friendly features.
