Conversion Rate Optimization (CRO) is defined as the process of boosting the percentage of visitors who complete a desired action on the website or landing page. The action could be becoming a subscriber, downloading an ebook, filling up a form, signing up for your product, or completing a purchase.
In this article, we’ll look at what conversion rate optimization (CRO) is, the two main types of conversions, how to calculate the conversion rate, and seven CRO best practices to skyrocket the conversion rate of your website.
Table of Contents
- What Is Conversion Rate Optimization (CRO)?
- Types of Conversions
- How to Calculate the Conversion Rate?
- Marketing and Business Impact of An Effective CRO
- 7 Best Practices for CRO with Examples
What Is Conversion Rate Optimization (CRO)?
Conversion rate optimization (CRO) is a process that helps you understand user behavior, identify the obstacles and drivers on your website that impact conversions, and tweak the website accordingly to maximize the conversion rate.
Conversion rate optimization is part art, part science, wherein you get creative with various conversion drivers and measure their impact on the conversion rate. Before we look at the concept of conversion rate optimization, let’s understand what conversion rate means.
In simple terms, the conversion rate is the number of visitors that complete a specific website goal per hundred visitors. Marketers emphasize on the conversion rate instead of the number of conversions because the conversion rate is a better indicator of performance. For example, if you have been able to increase your conversions to 100 in a particular month compared to 75 from the previous month, it might look like real progress. But you’ll get a clear picture when you compare it against the number of visitors, i.e., if your visitors have also increased to 2000 from 1000, you will realize that your performance hasn’t actually improved in the absolute sense.
Whether you are a marketer at a B2B SaaS organization or run a B2C e-commerce website, ensuring that the visitor enters your funnel and becomes a paying customer is your main priority. That’s how you primarily evaluate the success of your marketing and sales efforts.
CRO is an elaborate strategy, which is based on the culture of experimentation. A/B or split testing is an essential part that helps you experiment with the various elements of the website. You form an assumption/hypothesis, implement a change on the website, test it out on a section of the target audience, measure the impact, and verify the hypothesis. If the hypothesis brings favorable results, you implement it across the entire website, else you go back to step one. This is the gist of CRO.
Learn More: Top 5 Tips of Market Research: How to Attract More Clients to Your Website?Opens a new window
Types of Conversions
Not all conversions are the same. From a business standpoint, someone purchasing a product is far more significant than someone subscribing to your newsletter. However, signing up for the newsletter indicates a potential purchase in the future. Therefore depending on the impact of the business goals, conversions are divided into two categories, viz. Micro and macro.
The conversion types are often represented by metrics. We’ll look at a few examples of metrics as we delve into each type of conversion.
1. Macro Conversions
Macro conversions are the ones that are directly in line with the business goals. These conversions represent the primary goals around which the site is built. Examples of macro conversions include buying a product, requesting a quote or demo, generating leads, and signing up for your service. The corresponding metrics can be revenue, leads, demo requests, new sign-ups, etc.
2. Micro Conversions
Usually, micro conversions don’t directly reflect business goals, but they assist marketers in guiding the visitors through the sales funnel. These conversions tend to either boost engagement or cultivate interaction between the visitor and the brand. Examples of micro-conversions include newsletter sign-ups, viewing a product page, adding a product to the wishlist/cart, etc. So the corresponding metrics can be page views, video plays, blog comments, and so on.
How to Calculate the Conversion Rate?
The conversion rate is the percentage of visitors that complete a specific website goal. So, the generic formula for the conversion rate can be,
Conversion rate = (Conversions / Visitors) X 100
Now, depending on your business model, there are two distinct formulae to measure the conversion rate.
In the first scenario, if you have a subscription-based SaaS product, a user will convert (become a customer, in this case) only once. Therefore, we need to consider the number of unique visitors here. So, we formulate the expression as:
Conversion rate = (Subscription / Unique Visitors) X 100
So, if out of 1000 unique visitors, 25 visitors subscribe to your service, then the conversion rate would be 2.5.
Instead of unique visitors, you can also consider leads if you want to measure the lead conversion rate.
In the second scenario, you may be running an e-commerce store, where each visit is a potential opportunity to drive sales, i.e., a unique visitor can make new purchases in each session. So, instead of unique visitors, we consider the sessions. Therefore, the formula now becomes:
Conversion rate = (Purchases / Sessions) X 100
Learn More: How to Refresh Your Website for Better Conversions in 2020Opens a new window
So, What Is a Good Conversion Rate?
A common question that gets asked when discussing CRO is, what is a good conversion rate? The answer is that it depends on your business model (free, freemium, or premium), product pricing, target audience, goals (product sign-up, newsletter subscription, lead generation, and so on.), and plenty of other factors.
To decide the ideal conversion rate for your business, log into your analytics software and compare it against various periods to identify trends, and set benchmarks accordingly. You can always take it up a notch for your upcoming campaigns to boost the conversion rate. However, if you have no conversion data with you, here is some data to help you get started:
We have extracted data from Adobe Digital Insights’ (ADI) Consumer Electronics Report 2020Opens a new window . The average conversion rate is 3%. Here’s the industry-wise breakdown:
| Industry | Conversion Rate |
| Gifts | 4.9% |
| Health and Pharmacy | 4.6% |
| Apparel and Footwear | 4.2% |
| Other | 3.4% |
| Sports | 3.1% |
| Jewelry and Cosmetics | 2.9% |
| Major Chains | 2.3% |
| Home Furnishing and Decor | 2.3% |
| Automotive | 2.2% |
| DIY and Tools | 1.7% |
| Consumer Electronics | 1.4% |
If you need in-depth data on the conversion rate, average order value, traffic-wise breakdown, cost per acquisition, etc. for various industries, we would highly recommend you to visit IRP Commerce’s e-commerce benchmark dataOpens a new window .
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Marketing and Business Impact of Effective CRO
Marketers are beginning to focus on the overall content experienceOpens a new window they provide by creating an environment that includes quality structured content, visually appealing user experience (UX), and an efficient user interface. These aspects have a big impact on the CRO. CRO, in turn, helps your brand gain visibility and improves your ROI and overall revenue.
Here are five benefits of conversion rate optimization to inspire you:
1. Increases the value of website visitors
With successful SEO and advertising, your website or landing page gets more traffic. CRO can help convert it into quality traffic. When optimizing for conversions, you can generate more sales or leads with the same traffic.
As Rand Fishkin, founder of Moz, in an interview with Conversion Rates ExpertsOpens a new window , says, “CRO is simply a must-have. CRO is the most important marketing activity because it makes every visitor exponentially more valuable.â€
2. Rise in profits
CRO aims at converting prospects into customers. When your conversion rate increases, so does the profitability. Yes, you will spend more on scaling the number of customers, but your advertising and other costs will remain the same. Analyzing and making small, cost-effective changes will increase the value of your site, instead of rethinking costly strategies.
3. A rise in the number of customers
More profit also translates to more customers. Once conversions happen and profits increase, you can allocate some of your budgets to increase your advertising bid prices, which can help you reach a wider audience and eventually more customers.
4. Increased customer-centricity
CRO ensures it is easier and simpler for potential and existing customers to browse through your pages and take action. An approach that keeps customers at the center will be able to design features that customers will appreciate. Adopting changes in keeping customer behavior and preferences in mind will turn happy visitors into happy customersOpens a new window .
5. Staying ahead of the competition
CRO involves improved functionality, enhanced UX, better site value, and great content. By understanding what appeals to your audience, you can create fascinating content that appeals to your audience. Tailoring content to customers’ needs will attract your target audience and help you stay ahead of the competition.
7 Best Practices for CRO with Examples
The key elements that determine the conversion rate of your landing page are the copy, call-to-actions (CTAs), forms, navigation, page load speed, and responsive design. By optimizing these components you can certainly improve the conversion rate of your website. To give you a head start, here are seven CRO best practices you should implement on your website.
Learn More: Improving E-commerce Conversion Rates: Understanding Customer IntentOpens a new window
1. Use a qualitative analytics tool
Google Analytics is an excellent analytics tool, but it has certain shortcomings. Although it arms you with sufficient data, the closest it can get to visualizing the user behavior is through the funnel reports. Qualitative analytics tools, on the other hand, visualize how users navigate through your website so that you can identify the obstacles that reduce the conversion rate.
By implementing heatmaps (click, move, and scroll), conversion funnel visualizations, visitor recordings, form analytics, and media analytics, you can practically see how your visitors access your website.
Implementing these tools on the website homepage, product, cart, pricing, and high and low performing landing pages can help you decipher why some pages perform better than others. By adopting the same changes on other pages, you can easily optimize the conversion rate of your website.
2. Build trust and credibility among your target audience
People buy from the brands they trust. While typical brand awareness strategies are useful to build trust in the long run, to nudge the visitor to take action at the right moment, marketers utilize something known as social proof. Social proof demonstrates the credibility of the brand and product/service and compels the user to convert. Some common examples of social proof include testimonials, PR coverage, clientele, number of existing users, etc.
Also, be sure to prominently highlight your contact details, shipping policy, and terms of service. All these things combined prove your competence as an organization.
In the example above, you might notice NASA’s logo as it’s placed right at the center. This way, you can quickly build trust in the minds of your visitors by showcasing social proof strategically on your webpages.
3. Test and reiterate
As said earlier, A/B testing is an integral part of CRO. You need to have a hypothesis that you can test, and this process begins with research. You’ll get plenty of ideas to test by analyzing the qualitative reports. Based on your hypothesis, you can choose to run the experiment on two similar types of pages or on the same page but segregate it for different segments. You can select the pages that get a decent amount of traffic but are performing poorly and run the experiment.
The research phase is crucial because it helps you avoid throwing darts in the dark and prioritize issues that need immediate attention. Depending on the results, you can reiterate the existing hypothesis to see if you can further optimize the outcome.
4. Talk to your customers
An even better way to boost the conversion rate is to talk to your customers. While it may not be possible or feasible in many cases, if you can, always speak to your customers to identify their requirements.
You can arrange one-to-one sessions to understand the problems your customers face when navigating through your website or making a purchase. Getting this information directly from the user will save you a lot of time and experimentation and bring you the right results.
If it’s not possible to conduct one-to-one interviews, you can collect this information through surveys, feedback, and polls as well. Here is how VWO has integrated a survey on its blog posts to gather customer feedback.
5. Simplify as much as possible
To hold the visitor’s attention, simplify the website UX as much as you can. This means every web element should have a purpose that aids the conversion process. Guide people through visual cues. Since people scan most web pages, ensure that the conversion drivers stand out on the page.
In the following example, notice how the above-the-fold region of Trello’s homepage contains minimal information aimed towards a singular goal, i.e., to boost sign-ups. The page has placed the headline, subheadline, and the sign-up form in the right hierarchy to guide visitors.
6. Reduce any friction
When providing personal information, users have a lot of reluctance for obvious reasons. This reluctance will likely go up if you use a language that sounds very sales-y. Although you intend to persuade the visitor to become a customer, ultimately, the way you use the language throughout the page influences the conversion rate.
Although scarcity and inducing a sense of urgency are commonly used tactics, don’t make them anxiety-inducing. Trust and credibility should be the first and foremost priority.
Convey to people what you would like them to do without using any industry jargon that they have to Google to understand. Slack’s contact sales page does this brilliantly. It clearly states what you can expect during the call/demo, which sets expectations for the prospect. Also, the astute use of social proof potentially improves the app’s credibility.
7. Don’t blindly copy your competitors
It’s a common tactic to replicate what top brands or industry leaders are doing because, “If it’s working for them, it should work for us as well, right?†For instance, when Slack redesigned its website in 2017Opens a new window and introduced polychromatic characters with minimal design, many companies in the tech industry followed the suit. The same happened when many organizations introduced growth marketing widgets such as intrusive pop-ups and sliders.
While the idea is not completely invalid, be mindful of the fact that only data should guide your decisions when it comes to CRO.
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Closing Words
You would have realized by now that CRO is a heavily data-driven practice and shouldn’t be left to hunches and gut-feeling. Before starting CRO activities for your website, make sure that you have enough traffic so that you get proper results. In case you don’t have enough traffic, speak to your customers directly and ask what they want.
Keep in mind that CRO is neither a short-term nor a one-time activity. It’s an iterative approach to improving UX continually so that your performance doesn’t stall and keeps on growing.
Have you implemented CRO practices in the past, or are you planning to begin? Tell us in the comments below. For the latest news and trends update in the world of marketing, follow us on TwitterOpens a new window , FacebookOpens a new window , and LinkedInOpens a new window .