What is Conversion Rate Optimization (CRO)?
Conversion Rate Optimization (CRO) refers to the process of increasing the percentage of conversions across your digital platforms (e.g. web, app, social) without needing to increase traffic. Conversion Rate Optimization is typically an iterative process that involves testing hypotheses with A/B and multivariate testing.
How to Measure CRO
Conversion Rate is typically measured as the number of conversions divided by the number of visitors on a given month.
Conversions Generated / Website Traffic x 100 = Conversion Rate %
A conversion is determined by the type of business but examples include: orders, form fills, downloads (e.g. apps), demos.
What is an Example of CRO in Practice?
Taking eCommerce as an example, if a retailer receives 10,000 visits a month and 5% convert into orders, they receive 500 orders. By optimizing the conversion rate to 10%, you’d double your orders with the same number of visits.
|Monthly Site Traffic
Why is Conversion Rate Optimization (CRO) important?
Conversion Rate Optimization is important for several reasons:
- Customer Acquisition Costs are lower
- Advertising ROI (return on investment) increases therefore allowing you to lower ad spend or redivert it into your highest ROI channels
- Improved User Experience (UX) directly correlates to improved brand sentiment
- A higher revenue per visitor is often seen in correlation to a higher Conversion Rate
- Businesses see faster growth as it takes less visits to achieve the same revenue following optimizations
What is an Average Conversion Rate?
The general consensus is that the average online conversion rate is between 1% to 4%. However, this range will vary greatly depending on a number of factors including:
- Industry and type of products sold
- Type, maturity and size of company
- Customer base and target audience
- Site experience
- Conversion goals (clickthroughs, purchases, downloads, newsletter signups etc.)
Retailers and brands that dedicate time and resources and invest in technology to deliver the best customer experience possible, will, as a result, experience higher conversion rates over time.
What are the Important CRO Metrics?
CRO metrics will vary depending on the type of business you’re in and what your goals are.
Below are some example conversion points by industry:
|Purchases, add-to-basket, shopping basket completion rate, newsletter sign ups, loyalty programme sign ups, custom order enquiries, net new customers
|Bookings made, add-ons (ancillaries) purchased (e.g. insurance, car-hire etc)
|Leads generated, demos booked, phone calls (excluding noise calls)
|Subscriptions, add-ons (e.g. in-app purchases)
CRO Metrics should not be viewed in isolation. You may increase conversion rates but it is for a very low value item. Therefore, CRO metrics should be looked at in combination with other metrics such as:
- Total Conversions
- Revenue per conversion
Taggstar’s Social Proof Messaging solutions presents real-time shopper behaviour that statistically and scientifically increase online conversion rates and AOVs whilst simultaneously reducing cart abandonment rates.
Conversion Rate (CRO) Strategies
Once you have clearly identified the key conversion(s) for your business, the next step in the conversion rate optimization process is to identify a CRO roadmap.
A useful starting point is to map hypotheses you may have against an Ease Impact Matrix. This will help you identify which hypotheses will be the easiest to undertake and will deliver the largest impact for your business. The ‘ease’ is unique to each organisation as it depends on internal structures, technology being used, and back-end infrastructure – to name a few.
Examples of areas commonly optimized for CRO include:
- Call to Action (CTA) placement, color and copy
- Headline tests
- Form field quantity (e.g. reduce steps), layout
- With and without social proof
- Exit overlays
- Adding interactive elements (e.g. video)
- Social logins
- Proof Points
- Product descriptions
- Payment options
- Upselling versus cross-selling
The list can feel endless which is why mapping out hypotheses using the Ease Impact Matrix can help you identify where to start first before moving on to the next hypothesis. Example strategies to improve your conversion rate can be found on our blog.