How to Create a Conversion Rate Optimization (CRO) Strategy

Conversion rate optimization (CRO) is the best way to turn your existing website traffic into leads, sales, and new customers. It’s the science (and sometimes art) of maximizing the desired action you want your website visitors to take.

In this post, we’ll take a close look at this important website optimization strategy, including the important actions you should take before getting started, metrics you should be measuring, and a list of key steps needed for CRO to be successful and impactful to your bottom line.

Important Actions to Take Before Starting CRO

There are some things you must do before diving into a conversion rate optimization strategy. These include defining the conversion types or key performance indicators (KPIs) you want to track, benchmarking where you’re currently at, and documenting your goals. Here’s a breakdown of some actions to take before starting your ambitious journey of CRO.

Analyze Current Performance

The formula for determining your conversion rate is simple. You just divide your total visitors for a given time (e.g., month, quarter, year) by total conversions and multiply this by 100 to get your CRO %:

Conversion Rate = Total # of Conversions / Total Visitors x 100

The average website conversion rate varies based on many things including your industry, target audience, and conversion type. This table from Statista below breaks down the global shopping conversion rates by retail category for Q3 2023:

Online shopping conversion rate in selected verticals worldwide in 3rd quarter 2023

As you can see, even within one industry (retail), conversion rates fluctuate quite a bit, ranging from 0.4% for luxury handbags to 2.7% for Beauty & Skincare. This variability is why it’s important to define what conversions your tracking and benchmark your existing conversion rate.

A conversion is any desired and measurable action you want a website visitor to take. Depending on your industry, this could be a newsletter signup, paid membership, contact/info form request, sale, download, or something else (e.g., webinar signup).

The Role of Data in CRO

Data is the underlying ingredient that allows you to make optimization decisions with authority and confidence. Without good data (that is, accurate, complete, and reliable data), you can’t make good decisions about where to invest time, budget, and resources. When considering your existing data framework, make sure you:

Identify all data sources – What are your current data sources? Are they consistent? Do they require unification, configuration, and other data improvements to ensure there aren’t errors?

Set realistic goals – CRO can have a definitive and positive impact on KPIs like revenue and sales, but it’s important to set realistic goals. It takes time to improve performance and it’s never a set-it-and-forget it endeavor, particularly when you consider that customer needs, behaviors, and expectations are constantly changing.

Track changes and impact – Monitor the effects of your CRO efforts as part of your ongoing growth strategy. This includes tracking changes to conversion rates, user behavior, and website performance. Understanding the impact of any and all changes is what makes it possible to refine your approach.

Justify ROI – Track and document the return on investment (ROI) from your CRO initiatives. Measure financial gains against costs, making sure to account for investments in technology, personnel, and time. Focus on aligning CRO efforts with broader organizational goals because, let’s face it, this is how you’ll get support (and budget) for future projects. Here are some things you can track when assessing CRO success as defined by Google:

Conversion rate (sales, leads, signups, etc.): The percentage of users that have completed a desired action.
Bounce rate: A single-page session on your site. In Analytics, a bounce is calculated specifically as a session that triggers only a single request to the Analytics server, such as when a user opens a single page on your site and then exits without triggering any other requests to the Analytics server during that session. The user simply visits and then “bounces” off of your site.
Session Duration: The average time a user spends on a specific website during a single session.
Pageviews: The total number of pages viewed by a user. This includes repeated views of a single user counted towards the total.
Exit rate: The percentage of visitors to a page on the website from which they exit the website to a different website. (Not to be confused with bounce rate)
Time on page: The average amount of time that a user spends on a page of the website during a single session.
Click-through rate (CTR): Shows the ratio of the number of clicks your ad receives vs. the amount of times your ad is shown (impressions).

Identifying and Understanding Your Target Audience

You need a deep understanding of your existing and prospective customers since this sets the stage for what strategies, content, and experiences you’ll be testing. Know their behaviors, frustrations, and expectations so you can figure out what resonates and what annoys.

Clearly defining your target audience will also help you meet your larger business objectives since happy customers generate more revenue and contribute to a more sustainable pipeline.

Strategies for Identifying Target Audience

Surveys and Questionnaires – The best way to learn what someone wants is to ask them. Do this through surveys and questionnaires presented on your website, in email, and on social media.
User Testing – Qualitative user testing provides a window into how users actually move through your website. This information is a good supplement to your CRO data since it provides insight into customer motivations, pain points, and website obstacles.
Analytics and Data Analysis – You probably already have a wealth of data on customers and prospects that includes sales information, website traffic, and search information. Use this to begin building a customer persona prior to launching your CRO strategy (we’ll expand on this, below).
Customer Feedback Channels – Customer surveys, live and automated chatbots, social media, and call centers are feedback channels where customer information resides. Dig deep into this information since it gives you an on-the-ground view of what customers and prospects experience when interacting with your company.
Competitor Analysis – Spying on your competitors is not only fun, it provides valuable intel about trends, strategies, and shifts in demand. Look at things like web site content, customer reviews, product/service offerings, pricing, and overall website experiences. This helps identify gaps in your strategy and can spark new ideas and approaches that help you stand out.
Social Media Listening – If nothing else, social media presents us with an excellent opportunity to navel gaze. Spend some time monitoring social media channels for mentions of your brand, products, and competitors. Social media listening tools like Eyeon from SEM Rush can also help identify key influencers and brand advocates in your target market.

Creating Effective Customer Personas

A customer persona is a fictional representation of your customer that captures the essence of who they are. It includes things like goals, expectations, demographics, motivations, and even hobbies. Here’s Gartner’s definition of customer personas:

“Customer personas are archetypal representations of existing subsets of your customer base who share similar goals, needs, expectations, behaviors and motivation factors. Personas are powerful tools that aid in marketing and customer experience planning, as they offer insight into what customers want and how they will engage.” Source: Gartner

You can create a customer persona by compiling the information we touched on, above. Customer surveys, existing data, competitor analysis, etc. – all of this provides the foundation you need to craft a customer persona, or multiple personas, which you can then use to test messaging, visual elements, and even entire customer journeys based on your personas.

Key Steps to Create a CRO Strategy

The main steps involved in creating and implementing a CRO strategy are outlined below. We tried to keep things focused on outcomes – that is, what steps you need to take to get measurable outcomes that demonstrate clear performance improvements.

Developing An Optimization Hypotheses

A hypothesis in CRO is a statement that predicts an outcome based on specific changes. This prediction forms the basis of A/B testing or other experiments on your website. Your hypothesis should be straightforward and actionable so that it can inform practical changes. It should also be measurable so it’s easy to evaluate an experiment’s success or failure.

Role of Hypotheses in CRO

Imagine that your CRO hypothesis is a roadmap for whatever it is you’re testing. The goal is to help guide you to your destination by isolating and addressing specific issues about your website experience. By precisely outlining what is being tested and why, hypotheses help align CRO activities with broader business goals. That could include enhancing the user experience, increasing conversion rates, improving website usability, or something else.

Structuring Effective Hypotheses

We recommend using an ‘if-then-because’ to hypothesize structure. Here’s a breakdown of what that might look like in practice:

If (Identify the problem): Identify a problem with your website (e.g., a high percentage of users abandon their shopping carts without completing a purchase.)
Then (Specify an action): Specify an action to address the identified issue that includes detailing the changes to be made, where they will be implemented, and the target audience for these changes. (e.g., Streamlining the checkout process and offering a discount via email to people who abandon their carts.)
Because (Outline expected results): This phase outlines what results you expect to get after implementing the changes (e.g., more completed sales). This part should be measurable so you have a way to validate if the hypothesis was supported or refuted by the experiment.

Planning and Executing A/B Tests

The process of planning and executing A/B tests for conversion rate optimization involves several key steps:

Choose the testing tool – Select an A/B testing tool like Monetate to host and execute the test.
Creating test variations – Make a copy of your original webpage (version A) and modify it to create the test version (version B).
Set up the test – Define your test goals, select your target audience, and determine the test duration.
Define your metrics – Choose what metric or KPI you want to monitor (e.g., sales, clicks, signups, etc.). Decide on the sample size you want for this test (hint: the larger the sample size, the more reliable the results).
Run the test – Use your testing tool to direct a portion of your website’s traffic to each version (A and B) until you have enough data to assess the results.
Analyze the results – Review the test data and determine which version performed better.
Implement the winning version – When the test is over and the results are in, implement any necessary changes to your website.
Do it all over again – Build A/B testing into your marketing process. It’s a reliable way to improve the performance of your website and get the most from the traffic you’re already getting. You should be testing new ideas, making website revisions, and continuously monitoring performance for all eternity.

Case Studies of Successful A/B Testing

Below are some successful use cases of the A/B testing feature from Monetate. These are some examples of ways that your business can also utilize A/B tests to improve your CRO.

Ongoing Analysis and Iteration

When analyzing A/B test results, go beyond surface-level metrics to understand deeper user behavior and responses. Treat successes and failures as valuable learning opportunities by analyzing what worked and what didn’t. This allows you to refine your optimization strategies so they effectively resonate with your website visitors (and ultimately improve whatever KPI you’re hoping to optimize).

Keep thorough records of everything – including what tests you ran, all results, and any lessons learned. The best way to benefit from the intelligence gained from CRO is by documenting and sharing insights across your team and organization. That requires putting someone in charge to spearhead the testing process and who can build a collaborative and data-informed approach that ensures you get real value from your efforts.

Monetate’s platform allows you to easily launch A/B/n tests, optimize messaging, analyze results in real time, and generally takes the headache out of testing and delivering content. Reach out to us if you want to learn more about creating a CRO strategy for your business.