How CRO Can Make A Huge Difference To Your Bottom Line
Have you heard about Conversion Rate Optimisation (CRO)? It’s a way in which your website can be improved in order to improve it’s value to your business. Here we look at what CRO typically does, look at some considerations and finally what it means in terms of value to your business.
What Is Conversion Rate?
Conversion rate is the percentage of visitors to your website who take a desired action. It can be anything from a direct sale via ecommerce to a lead form submission. Other conversions may also be considered such as email listing sign ups.
The most important thing is that if there’s an action which takes place on your website that’s valuable to your business you want to be tracking it. One of the most popular methods of tracking conversions is via goals in Google Analytics. If you’re new to Google Analytics you can read our guide to setting it up.
A Quick Overview Of CRO
The main aim of CRO is to improve the rate of conversions on your website and to bring more value to your business. This can involve a multitude of different things from page layouts and small design changes to fully reviewing the customer journey of your site.
The basic steps to completing a CRO test are:
- Hypothesise – the first thing is to decide what you’re going to change on the web page. This could be done by analysing the website to find areas in which improvements can be made or could be suggested best practices.
- Implement the experiment – The thing you’re looking to change is implemented. There are two main ways in which this may be done in order to get the data needed and the method to use will depend on the number of traffic coming through your website. The first is to do an on/off experiment where the change is the only one live and the original isn’t available. This is useful when time and number of traffic is limited, however can give false results due to things such as seasonality. The other, and preferred way is to run the test and original at the same time, collecting data for both.
- Analyse the results – The final step is to look at the results and determine whether there has been an increase in conversions or not. The version being tested can then be set to the main version if you see improvements, otherwise you’d revert back to the original.
For example after analysis we might find that people are clicking on different products but aren’t adding them to their basket. In this example you might want to look at the placement of the add to basket buttons, consider where the vital product information is and do some competitor research to make sure it’s not pricing that’s putting them off. Once you have this information and have decided on what you want to change you will then look at setting up a split test which will compare your changes with the original, allowing you to see which version is best.
Remember To Consider Customer Value
When looking at CRO it’s always important to consider the value of the conversions along with the number of conversions. You may sometimes find that value may drop when the number of conversions increases and you may actually be better off with a lower number of higher value conversions.
We would recommend looking at all the data available when analysing the results of a CRO test in order to make sure that the variant most profitable for your business is used.
What CRO Means For Your Business
The most important thing to consider is what it will actually mean for your business. The formula below shows what the impact of increasing your conversion rate can be on your revenue:
The important thing to remember here is that the only only part of the formula which has a variable cost is the visitors. Normally people just focus on getting more visitors in order to increase revenue and don’t consider trying to increase their conversion rate and customer lifetime spend. But getting those extra visitors usually involves some sort of continual spend with more budget being required for higher levels of visitors.
The good thing about CRO is that it’s a fixed improvement to your site so a successful CRO test will see revenue increase whilst costs stay relatively the same.