Optimize Your Conversion Rate (CRO): The Definitive Guide

Conversion Rate Optimization (CRO) aims to increase the conversion rate using experiments based on quantitative and qualitative data.

Are you getting enough visitors, but you’d like those visitors to convert faster, better, or more frequently? Do you suspect there’s a bottleneck somewhere, but you’re not sure exactly where?

In this post, we’ll show you how to optimize your conversions through CRO to:

– Conduct quantitative and qualitative research.

– Identify bottlenecks on your website.

– Set up data-based experiments.

What is CRO?

If you have a website, you probably want your visitors to take a specific action, such as buying a product or subscribing to a service. The conversion rate is the percentage of visitors who take that desired action. Conversion Rate Optimization (CRO) is a set of techniques aimed at improving the conversion rate of a website, including:

  • Analysis of quantitative data
  • Qualitative customer research
  • Experiments

In general, you try to use knowledge from psychology, user experience, and web usability to discover friction points causing visitors not to take the desired action. To do this, you’ll set up experiments that help you address bottlenecks with data-based methodologies.

How to Calculate Conversion Rate?

Calculating the conversion rate is straightforward:

Conversion Rate = number of conversions / number of visitors

Suppose your website had 10,000 visitors in January and 160 purchases were made, which means you had a conversion rate of 1.6% (160 / 10,000) in January.

Why is CRO Important?

Now, imagine you have 500,000 visitors with a $20,000 advertising budget, resulting in 5,000 transactions and 2 million pesos in sales, which equals a 1% conversion rate and an average order value of $400.

Suppose you want to generate 4 million pesos in revenue next year. To achieve this, you’ll need to either double your advertising budget (i.e., $40,000), increase your conversion rate from 1% to 2%, or raise the average order value from $400 to $800.

In general, doubling the average order value isn’t easy, and doubling your advertising budget isn’t usually desirable due to the low margins it implies.

As you can see, CRO is a crucial activity for any business because it can provide significant benefits very quickly and without requiring a major effort or investment. Instead of just increasing your website traffic, CRO focuses on optimizing the user experience to convert more visitors into customers.

The goal of the CRO process is to:

  • Identify bottlenecks in the current customer journey.
  • Deepen the bottleneck analysis.
  • Prioritize ideas to solve this bottleneck.
  • Set up experiments to validate hypotheses.
  • Share learnings and implement successful experiments.

These steps will ultimately ensure that the conversion rate structurally improves.

Conversion Optimization and Business Goals

Conversion optimization should be the means, not the end. Therefore, it’s important that conversion optimization contributes to a higher goal in your overall strategies.

A company’s strategies can commonly be divided into:

  • Company strategy: core values, mission, vision, market, etc.
  • Product strategy: positioning, differentiation, segmentation, etc.
  • Marketing strategy: messaging, channels, segmentation, etc.

Marketing can further be divided into:

  • Product marketing: thinking about product-driven growth or marketing embedded in the product.
  • Performance marketing: measurable marketing outcomes, often paid.
  • Brand marketing: less measurable marketing outcomes that can be paid or unpaid.

By integrating conversion optimization into these broader strategies, you achieve a synergy that drives growth and business success. Conversion optimization becomes a powerful tool for improving performance and achieving established business goals. This maximizes the value of every user interaction and drives sustainable business growth.

How to Get Started with CRO?

Is your organization data-mature enough to start with CRO?

To begin optimizing your customer journey and conversion goals, you first need to ensure your measurement is in order so you can identify bottlenecks.

Try to add as many measurement points as possible, for example:

  • Website analytics
  • Production process
  • Delivery process
  • Customer satisfaction
  • Marketing performance

To start with CRO, it’s important to follow a structured process. Here are some steps you can follow:

  1. Conduct conversion research: Start by understanding your audience and their needs. Identify weaknesses in your website and bottlenecks preventing visitors from taking the desired action.
  2. Create an action plan: Based on your research results, create an action plan to improve the user experience and increase the conversion rate. This may include changes to design, navigation, content, and call to action.
  3. Conduct A/B testing: Test different versions of your website to see which changes have the greatest impact on the conversion rate. Make sure to test one change at a time to measure its effectiveness.
  4. Analyze the results: Use web analytics tools to measure the impact of your changes on the conversion rate. Adjust your action plan based on the results of your A/B tests.
  5. Decide what to do: Decide whether to stop, continue, or abandon, and determine the actions to take.
  6. Share knowledge: Share knowledge with relevant stakeholders to involve the entire company in experimentation.

Remember as a general rule that the probability of conversion depends on the match between the offer and the visitor’s motivation, as well as the clarity of the value proposition, the incentive to take action (now) minus the friction and anxiety.

Now let’s look at the process in detail.

Here’s the translation of the provided information:

1. Research

Quantitative Research

We start with quantitative research to uncover the “where” of the bottleneck.

Quantitative research involves numbers and statistics, which can include:

  • Digital data analysis: delve into your data to understand the customer funnel/journey. This requires nearly everything to be measurable, especially to delve into a potential bottleneck.
  • Mouse tracking analysis: observe a visitor’s mouse behavior on the website; the eye follows the mouse.
  • Click heat map: where do users click? Are they clicking where you want them to?
  • Scroll heat map: how far do users scroll? Are they scrolling enough, or do you need to place elements above the fold?

Here’s an example of quantitative analysis on an e-commerce site:

You notice a high abandonment rate (e.g., > 30%) in your funnel from the shopping cart to purchase completion.

This is surprising because when someone adds something to their cart and goes to the cart, the motivation is quite high. If that person ultimately doesn’t proceed with the purchase, it means something isn’t working well in the shopping cart.

    Qualitative Research

    On the other hand, qualitative research allows you to discover the “why” of a bottleneck.

    Qualitative research consists of words and meanings, think of:

    • Customer interviews: interact with your (potential) customers and ask about the responses they give.
    • Surveys: send surveys to existing customers or work with exit or post-sale surveys.
    • Expert evaluation: consult with some CRO specialists, evaluate the website in places where you identified bottlenecks in quantitative analysis. Make sure to include the following points in your evaluation:
      • Clarity: is everything as clear and simple as possible?
      • Friction: what causes doubts?
      • Anxiety: what are you afraid of?
      • Distraction: what distracts you?
      • Relevance: does it meet your expectations?
      • Trust: do you trust the source?
      • Guidance: do you know where to click or where you should go?
      • Stimulus: why should you take action?
      • Safety: is it safe here? What if…?
      • Comfort: how uncomfortable will it be?
      • Confirmation: did you do the right thing?
    • User testing: observe user tests with your target audience, give them scenarios, and ask them questions at the same time to gain insights into their thinking.
    • Customer service interview: interview customer service to gather information about common questions and complaints.
    • Sales interview: interview sales teams to find out what convinces customers or what makes them come back.
    • Live chat: export live chat messages to discover questions people have that they can’t find answers to on their own.
    • User recordings: view user recordings of how they use your website and try to gather insights from their behavior.
    • Review mining: gather insights from reviews of your company or competitors.

    Here’s an example of qualitative analysis on an e-commerce site:

    After activating an exit intent survey on the shopping cart page, you see that over 45% of the responses indicate that the reason for cart abandonment is return costs.

    2. Creating an Action Plan

    After knowing where the bottleneck is and why it’s there, it’s time to generate ideas and create an action plan. Ideas can fit into several categories:

    • Actionability: if you want people to do something, make it easy.
    • Attention: your visitor’s attention can only be on one thing at a time, direct their focus where you really want it.
    • Promote motivation: make your product or service compellingly connect with customer needs to increase motivation.
    • Certainty: unsure people don’t buy, they procrastinate. Make sure to remove uncertainty so people act.
    • Choice architecture: buying behavior is influenced by how choices are presented to us.

    The most powerful ideas often rely on a psychological effect or cognitive bias. Make sure to turn your ideas into hypotheses so you can start validating them:

    Based on [data], we see that [idea]. I expect that if we do [action], we will achieve a [increase/decrease] in [quantity] in [KPI] because [reason].

    Example of an action plan:

    Based on the exit intent survey, we see that users don’t make a purchase due to return costs. I expect that if we start offering free returns, we will see a +15% increase in the number of transactions compared to a +5% increase in returns, because we will remove uncertainty.

    3. Implementation

    Start by assessing if you have enough data to begin testing. This depends on:

    • Sample size
    • Effect size
    • Level of statistical significance

    There are several tools you can use to calculate how long your test should run to demonstrate statistical significance, or what we call the Minimum Detectable Effect (MDE).

    There are different types of tests through which you can implement your hypothesis:

    • Classic A/B tests: test two different versions against each other.
    • A/B tests with multiple variants: compare more than two versions.
    • Multivariate tests: test multiple parts of the page or funnel at once.
    • Sequential A/B tests: test one version after another and combine the results at the end.
    • A/B tests with interaction: change the design of a page or element based on user behavior.
    • Split testing or redirection testing: test different URLs instead of versions of a page.

    4. Results Analysis

    After running your test, you should analyze the results. For A/B tests, there are several tools that can help improve your measurement process:

    Depending on the tool, you can perform basic analyses like t-tests or proportion analyses, or more advanced analyses like Bayesian analyses.

    Conversion rate optimization is based on data and evidence. Use the data collected throughout the process to make informed decisions and drive continuous improvements. Identify patterns and trends in the data to better understand your users’ behavior and make decisions based on these insights.

    5. Decide What to Do

    Based on the analysis of the results, you need to decide what to do next. This may involve:

    • Abandoning the test: if one variant is significantly worse, you can stop it.
    • Implementing the test: if one variant is significantly better, you can implement it and start testing new variants.
    • Iterating the test: if the results are not significant or there are aspects that can be improved, you can iterate and adjust your hypotheses.

    6. Share Knowledge

    It’s essential to share the knowledge gained through experimentation with relevant stakeholders in your company. This can include:

    • Regular reports: share the results of your experiments and lessons learned in regular reports.
    • Meetings: hold meetings with relevant teams to discuss the results and implications.
    • Documentation: create internal documentation so others can access the results and previous knowledge.
    • Training: provide internal training on CRO and experimentation to increase understanding and interest in the process.
    • By sharing knowledge, you involve everyone in the company and create a culture of experimentation and continuous improvement.

    7. Implementation

    Once you have made decisions based on the results of your tests, it’s time to implement the changes on your website or in your marketing strategies. Here are some CRO techniques you will likely be using to improve your website’s conversion rate:

    • Improve design and user experience: Ensure your website is easy to navigate and information is easy to find. Use an attractive design and clear structure to guide visitors to the desired action. Focus on load speed, usability, and other aspects to provide a more satisfying experience for your website visitors.
    • Use clear and compelling calls to action: Ensure your calls to action are clear, specific, and compelling. Use active verbs and powerful words to motivate visitors to take the desired action.
    • Optimize your forms: Simplify your forms and reduce the number of required fields. Use clear labels and helpful error messages to assist visitors in completing the form correctly.
    • Use social proof: Display testimonials, reviews, and ratings from other customers to increase visitors’ trust in your website and your product or service.
    • Offer incentives: Provide incentives, such as discounts or gifts, to motivate visitors to take the desired action.
    • Use scarcity: Create a sense of urgency or scarcity to motivate visitors to take the desired action. For example, you can display a countdown timer for a limited-time offer or a limited quantity of products.
    • Personalize the on-site experience: Use user information, such as their location or purchase history, to personalize the user experience and increase the relevance of your website.
    • Adjust your marketing strategies: Based on the results of your tests, make changes to your marketing campaigns, such as ad design, audience targeting, or promotional messages.
    • Implement new features: If you have identified improvement opportunities through your tests, add new features or functionalities to your website to meet your users’ needs.

    It’s important to continue monitoring the results after implementing the changes to ensure they are having the desired impact.

    Continuous Analysis and Tracking

    Conversion rate optimization is an ongoing and evolving process. After implementing the changes, you should continue to track and analyze their effectiveness and make additional adjustments if necessary. This may include:

    • Data analysis: Continue monitoring key metrics such as conversion rates, time on site, bounce rates, etc., to identify areas for improvement.
    • Further testing: Keep conducting A/B tests and experiments to uncover new optimization opportunities.
    • Funnel optimization: Identify weaknesses in your conversion funnels and make specific improvements to increase the conversion rate at each stage.
    • User feedback collection: Maintain open communication with your users and gather feedback and suggestions to continuously improve their experience.
    • Take advantage of available tools and technologies, such as web analytics, user research, and automated testing, to facilitate this analysis and tracking process.

    Keep testing new ideas and changes based on data and evidence, and adjust your optimization strategy accordingly.

    In summary, conversion rate optimization is a structured, data-driven process aimed at continuously improving the effectiveness of your website or marketing strategies to increase conversions. Through research, idea generation, testing, and continuous analysis, you can identify and address weaknesses in your conversion funnel and maximize your online business performance.

    Get started with optimization and make the most of your conversions!

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