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The Beginner's Guide: Conversion Rate Optimization (CRO)

By: Deborah O’Malley| Updated January, 2021

If you’re like many digital marketers new to optimization, you’ve probably heard about Conversion Rate Optimization – or CRO – and know it’s important, but don’t really understand what it is, how it works, or why it’s important to you.

This article will set everything straight for you.

What is Conversion Rate Optimization (CRO)?

Simply stated, Conversion Rate Optimization, or CRO, is a system that applies data analysis and modelling to maximize the rate, or percentage of visitors, who “convert” on your website.

Sound complex? Let’s break that idea down a little.

Ok. First, let’s start with the idea that CRO is a system, or process, that uses data and modelling, or information.

Now stop there.

You may be wondering, where do we get this data?

Well, data can come from all sorts of different places, but it’s most often is gathered through an analytics platforms, like Google Analytics.

Or, a heatmapping tool, like Crazy Egg.

Analytics data tells you where you users are coming from, what they’re doing on your site, and how they’re interacting with your website.

You can gather and apply this data to learn about your users and their behaviors to figure out the best way to get them to “convert”.

What is a Conversion?

So, what does it mean to get a user to “convert”?

Well, let’s think about the word convert.

It’s often used in a religious context, when you get a person to convert, or change from one religion to another.

In the religion of web optimization, conversions are similar.

A conversion means you find a persuasive way to convince, or get your user to perform a desired action on your website.

What Comprises a Conversion?

Depending on your website, and what it’s set-up to achieve, a conversion can take many different forms.

If you’re trying to generate leads, or obtain prospective customer’s contact information, a conversion may be getting someone to input their email address in your newsletter sign-up form.

If you’re an eCommerce store, a conversion might be getting the shopper to make a purchase.

If you’re an inbound marketer, it could be getting the reader to click an article link that brings the user to your website.

Or, a conversion can be as simple as getting a user to click a button your website.

Micro vs. Macro Conversions

Typically, we think of conversions as major actions, like when a buyer makes a purchases.

But, that’s not always the case.

Often, the process of making the purchases happens only after the user has taken many smaller steps, or “micro conversions.”

For example, the user might land on your homepage or a click button that says “shop now.” That first click is indeed a conversion. The user is taking the action you want them to on your website.

But, if they just stopped there and left your website, you’d be pretty disappointed – and probably consider them an abandoning user. What you really want them to do is buy your product.

But, to buy your product, they first need to click on the “shop now” button, then click on the product they want to buy, then click on the “add to cart” button, then enter their payment info, then finally click to confirm their purchase.

Each of these steps were micro conversions that led to the bigger, ultimate, macro conversion of making the purchase.

micro conversion might not always be so clear-cut, however.

A user might come to your website, watch a video about your product or service offering, leave your site, come back another time, watch another video, and then finally move on to make a purchase, or sign-up for your newsletter.

What’s important to realize, is that each one of these steps help prepare the user, bringing them closer to the ultimate desired outcome, or macro conversion.

So, to reiterate, “micro conversions” can be considered small steps your users take to achieve a desired goal on your website.

Where as a “macro conversion” is the ultimate desired action you want the user to perform on your website.

Key Performance Indicators (KPIs)

So far, you’ve learned that conversions occur when a user performs a desired action on your website.

You now understand that these actions often occur through smaller steps, or micro conversions, that lead up the bigger, ultimate macro conversion.

One way to measure whether users are achieving your macro conversion — or reaching your ultimate goal — is through a Key Performance Indicator, (KPI).

A KPI can be thought of as metric you can use to evaluate the success of your website goal.

You might have one specific KPI, or many.

Either way, KPIs enable you to assess and measure the performance of your website goals.

For most websites, their primary KPI is tied to revenue in some way.

For an eCommerce retailer, increased revenue equals more sales. So, the KPI is revenue.

For a lead gen marketer, the KPI – or metric you’re using to evaluate success – may be increased email sign-ups. The more sign-ups you get, the more warm leads there are that are likely to turn into customers, bringing you more revenue.

If you’re a SaaS (Software as a Sales) platform, your KPI may be decreasing customer churn.

KPI Metrics

From a data standpoint, KPIs are typically measured as an increase or decrease in certain metrics. Typically, these metrics can be assessed through an analytics platform, like Google Analytics.

For example, you might want to measure increased revenue, an uplift in Average Order Value (AOV), or increased Customer Lifetime Value (CLV).

Alternatively, you may want your KPIs to decrease. For example, you might want to see a drop in cancellation rates, lower abandonment rates, or a drop in bounce rates.

Monitoring the performance of your overarching conversion goals, or KPIs, will allow you to accurately assess and measure how changes to your website are affecting performance.

Additionally, communicating these KPIs to others in your organization, will help everyone stage on the same page about the importance of the CRO work that’s being done.

The CRO System: How It Works

You’ve now learned the definition of CRO, understand what a “conversion” is, and know difference between micro and macro conversions, plus how to measure their success, using KPIs.

But, how does all this fit together to help your website perform better?

To answer that question, let’s go back to the beginning when we defined CRO as a system that applies data analysis and modelling to maximize the conversion rate.

In this system, your job is to take the data, or information gathered about your users, and shape it into a meaningful picture so you can gain insight into how your visitors are behaving, where they’re coming from, why they’re leaving your site, and what you need to do to keep them engaged — so they convert.

Typically, you can obtain much of this data from quantitative means, like Google Analytics, or other analytics platforms that show specific metrics about your users and their actions.

However, you might also wish to use qualitative information, like user surveys, or user experience studies, to form a bigger picture so you can truly understand the “what” and “why” of what’s going on your site.

With all this data at your fingertips, your job is to be a detective, putting together the puzzle pieces, making inferences about what you think might be going on – based on the story the data is telling.

A good CRO specialist then states their assumptions, through well-defined hypotheses, and teases out their ideas through A/B testing.

Once tested – and verified – any ideas that work to improve conversions should be implemented on your site, so that the website performs better, or is optimized.

When your website is optimized, it means your users are converting more and your KPIs are being achieved more consistently.

This process is never complete, however.

Optimization is ongoing and continually evolving.

Technological advances, coupled with changes in your users’ behaviors, attitudes, expectations, and preferences mean you must continually work to optimize your site to best cater to your users and their needs to maximize conversions.

Also, it’s important to clarify that CRO is not SEO.

In SEO, the ultimate goal is to drive traffic to your site. In CRO, the ultimate goal is to make the leads coming to your site convert.

Think of it this way, it doesn’t matter how many leads you’re driving to your site if none of them are signing up or buying anything.

Converting existing leads may mean you need to improve several aspects of your website, like the design, content, or user experience.

If you think this all sounds like a lot of work, you’re right. But, the good news is, it can be very fun and extremely rewarding!

Why is CRO Important?

So, based on everything you now know about CRO, why is it so important?

The answer is because it works! Optimizing your site brings more revenue, more email addresses, more transaction — or whatever your specific KPI is.

And, even better news: just small changes really can make a big difference!

Numerous GuessTheTest case studies show, simply changing the color of a button, or the text on a link can have a huge conversion lift, helping you turn prospective customers into profitable ones.

These examples all show examples that small website changes can make a big difference, helping to optimize the site and lift revenue.

How Can CRO Benefit You?

Quite simply, Conversion Rate Optimization, CRO benefits you because it can bring your website more money.

Whether you own the website, or work for a company promoting a product or service on the site, that’s good news!

Currently, the average website conversion rate hovers between 3-5%, meaning there’s a lot of room to lift conversions and resulting revenue, or whatever your KPI is.

Think about it: if your website is currently bringing in $1,000 in revenue per week and you make just one small change to your site that lifts conversions 3%, you’ve just increased your revenue $300 weekly. Over a month, that amount adds up to an extra $1,200!

In other words, that one small change could outstrip more than a whole week’s worth of sales!

Looking at it that way, isn’t it worth investing your time and energy into CRO!?

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