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In all my years of digital marketing going back to as far as 2005, the only thing that has been a constant in my marketing arsenal, at least to produce the most impactful results has been conversion rate optimization.
So much emphasis is put on the latest traffic source or tactic and getting more eyeballs on the offer. But imagine if you got 10% more sales out of your current ad spend and/or your customers spent an average of 10% with you. How much of an impact would that have on your business? Chances are it would be a game changer. Well that is precisely what conversion rate optimization (CRO) can help with.
A recent study found that out of all the effort in marketing that conversion rate optimization produced an average of $45 return for every $1 spent, when search engine optimization only produced an average of $10 return and display advertising produced an average of only $2 for every $1 spent.
Today I wanted to shed some light on why conversion rate optimization is important.
First I must say that effective conversion rate optimization is more than just trying to increase your conversion rates. There is only so much you can improve the conversion rate before you hit a saturation point especially when looking to scale. You need to pay attention to other metrics such as average order value and your cost per acquisition as well looking at overall engagement and repeat customer rate.
A good example of this was a recent client of ours… we took their conversion rate from 2% to 3%, then in a matter of 2 weeks they turned on 70% more traffic. The conversion rate dipped back down to 2.1%. At first you may think that something must be wrong with the conversions but what actually happened was the “new” traffic converted quite well and resulted in the company making a TON more in revenue as a result. What would have happened if we hadn’t been optimizing?
Chances are the conversion rate would have been much worse as a whole. The average order value stayed consistent and they had a ton more customers coming in the door. Conversion rate optimization allowed this company to scale traffic quickly at an effective rate.
As mentioned conversion rate optimization is much more than just raising the conversion rate. When you are deploying effective conversion rate optimization strategies you learn more about your visitors than you could have before. You find out what makes them tick, what they like, what they don’t like, what they pay attention to and what they ignore when it comes to their experience when shopping with you. You find out what holds the most weight on the pages and the journey to purchase to help you deliver the ultimate experience for them.
You take both qualitative and quantitative data, experiment with different colors, layouts, elements and strategies to create happier shoppers and ultimately happier customers who spend more money with you. It is much more than just changing a button color in hopes you get more people to click it and take action. You either improve or you learn something about the visitors or both.
So why is conversion rate optimization important?
Well you will learn more about your target audience, understand their behaviors better, help them find what they are looking for easier and help them make a buying decision quicker. Traffic becomes more effective as you are better connecting with your visitors, often resulting in lower customer acquisition costs and increases in average order value.
Too many people simply look at the actual conversion rate and don’t take into account all the other variables at play. As you scale, with conversion optimization, the rate itself may stay the same or even go down slightly but you will ultimately make more money due to reduction is costs and increases in value of a customer.
Digital marketing landscapes are constantly changing, buying habits are changing as well. To stay relevant and take competition out of the equation, the only way to do that is with conversion rate optimization. As markets evolve you can quickly evolve with it. What worked 6 months ago may not work today and what didn’t work 6 months ago may end up working today.
If you want better overall marketing performance, happier customers who spend more and the ability to scale easier I urge you to deploy effective conversion rate optimization strategies.
Not sure where to start? Simply contact us to request your free in-depth conversion analysis to find out where you may be falling short and uncover hidden improvement areas that can lead to bigger and better results.