Everything You Need to Know about Conversion Rate Optimization
The Complete Guide to Conversion Rate Optimization
As you know, marketing (and shopping) has moved online. Whether you operate an e-commerce store or a business-to-business operation, you are constantly driving your prospects to take specific actions, like buying a product, signing up to a newsletter or downloading a free e-book. Whenever a user completes an action, this is seen as a conversion. Conversion rate optimization is the practice of raising the number of users interacting with your site. While this is usually done through a series of small, gradual improvements, the end goal is to optimize your entire online marketing process.
First, let’s get back to basics about conversion rate: what it is, how to calculate it, how to improve it and how to make sure you don’t get in your own way. Ready? Let’s go!
What is Conversion Rate Optimization?
Before we get into conversion rate optimization, let’s take a deep dive into what conversions and conversion rates are and how to track them.
What is a conversion?
A conversion can refer to virtually any action taken online. It doesn’t refer to a single specific action, like a sale, but to any action that you consider valuable to your business. A conversion (also called an event) can be a click, a purchase, a swipe or a download.
Your conversion rate is the number of conversions that occur in relation to the total possible conversions in a given timeframe. (More on that later!)
Macro vs micro-conversions
You may have heard references being made to macro and micro-conversion.
Macro-conversions (or website goals) usually refer to the conversion of a visitor into a paying client or subscriber of a web service, e.g., an online magazine membership, streaming service, or software-as-a-service (SaaS) monthly subscription. These are sometimes called website goals.
On the other hand, micro-conversions are seen as smaller, secondary actions that a visitor takes on a website that indicates that they will convert, for example, clicking through to the site, watching a promotional video, or adding an item to your cart.
Can a user convert twice?
Should you pay for conversion if a single user performed the same action twice? Deduplication is the method we use to ensure that the right partner is credited and that clients aren’t overcharged for conversions.
Until now, all of the conversions measured by AB Tasty have followed a deduplication method. If a user accessed your conversion URL twice, we would only count one conversion for that web user. This was the case for URL and event type objectives, such as click tracking. The transaction objectives, set explicitly by our e-commerce tag, were the only exceptions. For these objectives, you have the option of displaying the conversions in the report in deduplicated (by default) or duplicated mode.
The deduplication method is best suited if you want to track macro-conversions. You want to know whether or not your modifications impacted your ability to, more or less, convert your users into subscribers.
For micro-conversions (e.g., add to cart, access to content), the duplication method offers a complementary perspective. For example, in the case of user interactions with your interfaces, you may wish to measure whether your tests allow more users to use any element of the interface, but also whether it generates a lot of use. The conclusions of a test consist of emphasizing whether a new functionality would be different if, despite the increase in users accessing it, it does not create any repeated use (the concept of “stickiness”). The deduplication vision responds to the initial question, while the duplication vision responds to the second.
What is a conversion rate?
The easiest example to illustrate conversion rate is in the context of e-commerce. Conversion rate is often used by e-commerce sites to measure the percentage of visitors that end up purchasing products. In other words, how many go through the entire conversion funnel.
If you’re an e-commerce company, your goal will be to optimize your conversion rate, which should lead to increasing your bottom line. Conversion tracking can be done through any web analytics platform, like Google Analytics, Adobe Analytics, or Mixpanel, for any period of time.
How do you calculate conversion rate?
Now that you know what a conversion rate is, you want to calculate your conversion rate and measure the effectiveness of your site. Don’t worry – you don’t need crazy math skills. All you have to do is divide the number of actions completed in a defined period of time by the total number of visitors to your website, then multiply the result by 100.
In other words:
Conversion rate = (Conversions or goals achieved / Total visitors) * 100.
Imagine that your e-commerce website got 25,746 visitors during a chosen time frame; of those 25,746 visitors, 4,832 completed a transaction. Then, your conversion rate is 18.76%. Pretty good!
Depending on what you’re looking to measure, you can also calculate the conversion rate in the following ways:
You can also find an automatic conversion rate calculator to get a precise calculation of your website’s conversion rate for those not doing their own math.
What is a good conversion rate? (with examples)
Benchmarking conversion rates isn’t easy. An FMCG (fast-moving consumer goods) e-commerce site might have a completely different conversion rate to a site that sells insurance. Two to five percent is considered a good conversion rate; remember that even a minor jump in conversions can have a significant impact.
Try to compare a site that is most similar to yours. The ADI Consumer Report for 2020 shares the following stats:
|Industry||Conversion Rate in %|
Health and Pharmacy
Apparel and Footwear
Jewelry and Cosmetics
Furniture and Decor
DIY & Tools
What is CRO?
It doesn’t matter what business you’re in; you will always try to increase your conversions. While you might be tempted to spend more money on advertising, greater awareness doesn’t always lead to more sales.
Conversion rate optimization is a much more affordable and effective way of acquiring more traffic because you can make educated, data-driven adjustments that focus on the traffic you already have. You can concentrate on micro-conversions (for example, getting your customers to fill out forms so your sales team can give them a call and push them through the funnel) or macro-conversions, like confirmed purchases.
We’ll show you how to create a winning CRO strategy later in this article.
A conversion is any desired action or interaction with your online ad or website that has been defined as being valuable to your business.
A conversion rate is the number of conversions (or desired actions) taken by visitors divided by the total number of visitors to your site.
Conversion Rate Optimization
Conversion rate optimization is the strategic process of increasing the percentage of visitors that perform a desirable action on your site.
A conversion funnel refers to the different steps prospects take before becoming full-fledged customers of your business.
Benefits of Conversion Rate Optimization
There are many reasons why CRO is such an important part of your online marketing strategy. While strategies like SEO and advertising can generate additional traffic, your conversion rate optimization strategy can help turn your traffic into quality leads and sales. You’ll also gain valuable insights into customer preferences and behaviors. Let’s look at how CRO can benefit your business.
CRO creates a seamless shopping experience
Conversion rate optimization drives sales, but it can also remove any obstacles on your site that might prevent customers from completing a purchase. Small improvements in UX can have a big impact and improve the overall shopping experience of your customers.
Creating a seamless shopping experience without these niggling roadblocks will increase the customer lifetime value, i.e., keep customers coming back for more. This is done by analyzing feedback and testing solutions to ensure that the decisions you make are rooted in real data.
CRO helps you understand your customers
The days of “educated guesses” are over. A CRO specialist will provide you with real insights based on data collected, getting to the root of any problems you may be experiencing. Let’s look at the issue of shopping cart abandonment.
You might find that your users are landing on your site, browsing around, and adding items to their cart but simply not taking the final step of checking out. This could be due to cognitive dissonance, a simple psychological barrier to purchase. You might add a pop-up message that states that the item will only be on sale for 24 hours — or that there are only three left in stock — to create urgency or add a badge that indicates that checkout is secure to see if that makes a difference.
Maybe you want to know more about your customers so that you can tailor your messaging according to their needs. CRO can provide real insight into buyer personas and user psychographics.
CRO improves marketing ROI and lowers acquisition costs
You might be aware of the adage that it costs more to acquire a new customer than to retain or convert an existing one. It’s true! Luckily, the higher the conversion rate is on your site, the lower your customer acquisition costs.
We know that you have to spend on advertising, and we know that paid advertising is expensive. Popular keywords aren’t cheap, so identifying the problems on your site and the phrases that lead to the most conversions will save you a lot of money on ineffective paid advertisements and improve your marketing ROI.
How to create a CRO strategy
According to Forrester Research, 90% of firms rated their CRO program as valuable or extremely valuable on a Likert Scale when it comes to achieving their strategic goals. Let’s examine how you can create your winning CRO strategy.
Why your CRO strategy matters
CRO can transform your business for good. A recent survey by marketing firm Outgrow found that among 3,000 companies, 5% of companies investing in CRO tools reported an ROI larger than 1000%. While your business might not enjoy that level of growth, the average ROI for the companies surveyed stands at 223%; and more than 70% of marketers use CRO campaign results to inform their campaigns.
If executed correctly, CRO strategies can improve landing page conversions, identify buyer personas, reduce cart abandonment and increase sales.
Setting clear CRO goals
Before setting your CRO campaign, define your Key Performance Indicators (KPIs). Try to be as detailed as possible. Good examples include:
- Decreasing your bounce rate by 10%
- Increasing the average browsing time by 1 minute
- Reducing cart abandonment rates by 25%
- Increase site speed by 1.5 seconds
- Increase subscriptions by 5%
- Increase page views
- Increase newsletter subscribers
A good KPI is specific, measurable, and limited to a specific timeframe. Once you know what you are aiming for, you can start executing.
Phases of your CRO strategy
You’ll soon discover that the entire process of optimizing conversion rates will provide a wealth of information that you can explore and utilize in your future campaigns. While A/B testing is the most common experiment that CRO experts run, true optimization is more robust.
Step One: Research and discovery
Your first step will be trying to identify opportunities for improvement. This could be anything that prevents a visitor from converting, such as bad copy to UX bottlenecks. You’ll start by analyzing your existing site in Google Analytics and choosing a limited number of opportunity pages to optimize.
From there, you can choose the metric that you want to compare and improve upon, e.g., high bounce rates or low average session duration. The pages you want to test should have sufficient traffic and be important enough to your business that making improvements will deliver a real impact. Once you’ve identified the pages, you can hone in on why users aren’t converting as well as they should.
Try to answer the question, “How are people finding this page?” and “What is their pre-click experience like?”, Knowing this will help you hone in on the user intent (i.e., what value they hope to get out of their visit). You can see this by visiting Google Analytics and examining the Default Channel Group of the URL you want to analyze. This will reveal the sources that are leading people to your page.
You can use various on and off-site testing methods to reveal possible bottlenecks or barriers to conversion, including user testing, session replays, heat maps, click maps and heuristic analysis. The insights you gather should give you enough information to create a detailed hypothesis to test.
Step Two: Hypotheses and prioritization
While (theoretically) there’s no limit to the number of hypotheses you can test for, companies have finite resources and a limited amount of time to devote to testing, which is where prioritization comes in. You don’t want to focus on hypotheses that won’t move the needle.
To combat this, we can follow two guidelines:
- Come up with testable hypotheses (follow this guide on how to do this).
- Ruthlessly prioritize ideas based on effort and ease.
There are plenty of prioritization models out there you can follow, the most popular being ICE, PIE, and PXL. You want to determine which actions will generate the greatest impact on the effort and resources you’re putting in. Deciding on an objective way to choose between hypotheses will go a long way towards creating predictable, repeatable CRO processes. All prioritization frameworks have pros and cons, so don’t waste too much time picking the right one. Choose one, stick to it, and get started.
Step Three: Experimentation
Finally, we have experimentation. This is the stage that everyone associates with CRO: A/B testing. A/B testing is a common CRO technique that involves changing one aspect of your website — the color of a CTA, the length of a form, etc. — and observing whether this change positively or negatively impacts your chosen KPI. If your variation provides better results, you can hard code it into your site.
Testing is a process that requires statistical knowledge to get it right. You don’t necessarily need to have a data scientist looking over your shoulder, but it wouldn’t hurt to have some guidance on your first few experiments. (We’ll get into best practices a little later on).
There are several tools you can use to run A/B tests. AB Tasty is a solid solution for running a website, blog, or product experiments and any web personalization.
If you’re experimenting on your pop-ups or your email list, it’s almost certain that your tool of choice will have some sort of A/B testing feature native to the product. That’s certainly true of something like HubSpot or Mailchimp.
In any case, just make sure you can:
- Set up experiments correctly (i.e., the page has enough traffic to draw meaningful insights)
- Randomize and deploy experiences (with the help of a testing tool)
- Analyze the experiments correctly
If you don’t have enough traffic to the page you want to test, you can:
- Validate using qualitative research
- Roll it out and watch the time-series data
You can validate copy changes through Five Second Testing. Show users a design or copy for five seconds, and then ask follow-up questions about what they saw and remember. You can validate usability changes through user testing, session replays, or polls.
Additionally, keep an eye on the data before and after you roll out the changes. If the change is big enough, you can see the bump in the data over time. The numbers certainly shouldn’t go down. You can also try a Bayesian time series model to see if your changes produced significant results, given other implicit trends like seasonality.
It’s not necessarily the best approach, but it is a quick and more scientific way of measuring changes and improvements.
Step Four: Analysis and repeat
The analysis is tricky, and your best bet would be to engage with a specialist to help you make sense of the data. If you don’t have an analyst, you should take some time to go over the basics. There are many books you can read on the subject of great online resources:
- Statistical Analysis and A/B Testing
- Data science you need to know! A/B testing
- Guidelines for A/B Testing
- How to Calculate, Track, and Analyze Conversion Rates
Important note: before you run the test, you should decide upfront what action you will take if the test wins, loses, or is inconclusive. That way, you mitigate the effects of confirmation bias and cherry-picking.
Components of CRO
While there isn’t a set CRO process that all companies use, most contain the same or similar components. We’ve compiled a list of commonly used CRO elements, as well as a glossary of terms you can consult if you come across a phrase you don’t know.
A/B testing is the process of verifying your conversion hypothesis. It involves comparing two or more versions of your site and conversion rates to determine which is the most effective. To do this, one version is given to one group and another to the other group. From this, you can identify how each version performs.
Call to action (CTA)
Your call to action tells visitors exactly which action you would like them to take (e.g., “Click here for more information” or “Download your free e-book here”)!
Analytics is the various tools to measure and explore visitor information to improve conversion rates.
User or session recordings
User or session recordings are software programs that can track the movement of users and visitors as they navigate through your site. You can use the information to find out which areas they are most likely to click on, which barriers exist that prevent them from taking action, and where they would like to go on the site.
User experience (UX) is defined as the overall experience your users have throughout the use of an interface, digital appliance, or, more generally, interaction with any device or service. We say that a user experience is poor if a user experiences an obstacle that prevents them from doing what they’d like to do (for example, if they find it difficult to find or use the search bar, or if the search function delivers irrelevant results). UX and CRO go hand-in-hand because CRO involves identifying obstacles, testing them, and optimizing them so that you perform better.
Heatmapping is a data visualization technique that shows where visitors click on your page using colors. Hot colors (usual hues of red) show you where visitors are clicking or interacting on your page most frequently, whereas cold colors (blue or green) show you the areas they least click on. You may want to move your most important call to action buttons to the “hot zones” as part of your CRO process.
Multivariate testing is similar to A/B testing but compares more variables and reveals more information about how these variables interact. In an A/B test, the traffic is split between different versions of the design of a page. Multivariate testing compares the data from each variation to determine which method is the most successful and which elements will significantly impact a visitor’s interaction with the site. A good example would be creating two different sign-up forms, two different calls to action, and two different headers. You would then send visitors to all possible combinations of these elements to see which combination would be most effective. Whether you use multivariate testing or A/B testing depends on your site traffic. You need a significant amount of traffic to your site to obtain meaningful data from multivariate testing.
Surveys and NPS
You don’t always have to use on-site behavior to guide CRO. Many companies use surveys and NPS (Net Promoter Score) surveys to gather the opinions of their users. Net Promoter asks customers variations of the same simple question: Based on your recent interaction, how likely are you to recommend our brand to others? This is an excellent way to determine the sentiment about your site and identify areas for improvement.
Best CRO practices
It’s hard to compile a list of best (and worst!) CRO practices because every company is different. In fact, that’s why we have to test every assumption we make — there simply isn’t a one-size-fits-all methodology that works for every site, every time. You have to spend time understanding how your customers think and behave and what their preferences are.
Here are a few strategies you can try as you embark on your optimization journey (and a few things you should avoid):
Five things to try during conversion rate optimization
When it comes to CRO, your best practices are actually just suggestions! There are no quick wins in conversion rate optimization, but you can follow our guidelines as a starting point.
Run A/B Tests on your landing pages
Landing pages are designed specifically to convert your users to a specific action, like capturing a lead or buying a product. An optimized landing page might be the only thing you need for business to boom, so make sure you thoroughly test and improve the landing pages that have the most impact on your bottom line.
To run an A/B test, you should put at least two different landing pages against each other, differentiated by a single element. This could include different calls to action, different designs, copy lengths, and images. Make sure that your landing page is visually appealing, and be prepared to redesign the entire page if it’s not converting. Remember, it’s not about your preferences: it’s about your customers.
CTA copy and color combinations and placement
Experimenting with a CTA button (including changing the wording, font, and copy length as well as color combinations and where the buttons are placed) is a great way to test your site and improve conversion.
For example, let’s say you’re an AB Tasty client and you’d like to increase clicks to the “Confirm purchase” CTA on your basket page. Using our visual editor, you can test if changing the color of the CTA from blue to green will help. Since you’ve already got AB Tasty’s tag on your website, you can get this test up and running in minutes.
Unbeknownst to them, a shopper on your site will either be presented with the original version or the variation. This process is randomized so that the pool seeing version A is more or less identical to those visiting version B. Since you’ll have set your test’s KPI to be “Clicks on CTA,” you can easily see in the report which variation performed best once enough visitors have been exposed to the test to make it statistically significant.
Page layout testing
Website navigation has a significant impact on user experience. If you have high bounce rates or low session duration, make sure to test different variations of your page layout. Is it easy for users to find what they are looking for? Are they able to find and use the search bar? Most websites have their search bar located on the top right corner of the site, above the fold. Design-wise, it might look better to place it somewhere else, but non-conventional placement can make it difficult for users to find. Drop-menus are popular, but a lot of website visitors find them annoying because their eyes move faster than their mouse, which makes them hard to use. A different menu format can make a big difference.
Pop-ups and urgency
Pop-ups have a bad reputation, but they can be extremely useful tools if used correctly. A pop-up letting users know that they can receive an additional 10% off if they sign up for the newsletter before checking out is a great motivator. They can also be used to create a sense of urgency. This is usually found on accommodation sites letting you know that four other people are looking at the same room as you or on e-commerce sites that tell you that there are only two units of the item you are looking at in stock. Personalized offers, time-limited offers, and free delivery offers are valuable conversion tools for customers because the benefits outweigh the intrusiveness of the pop-up.
Clean, actionable web copywriting
Copywriting isn’t easy. Often it’s not what you say, but how you say it (and present it). A few simple phrases that clearly state what you want your visitor to do and know about your brand are often more effective than long-winded essays about your years of experience in the business.
Good copywriting for a website is concise and easy to understand, even at a glance. If you are writing a more complex article, such as a troubleshooting guide, try to solve their problem right away by making it easy to find their question and then guiding them through the steps. Remember that most people don’t like to read, so include lots of imagery and video where possible to break up the text.
SEO forms part of your copywriting and CRO considerations as well. Try writing SEO-optimized copy for every step of the buyer journey, whether they are simply looking for information to solve a problem, doing comparison shopping or ready to make a purchase.
Five things to avoid during CRO
While there is no magic wand to wave during CRO that will guarantee a better result, there are a few things that are surefire conversion killers. You have to be willing to kill your darlings or, more specifically, kill off pages and posts that are hurting your conversion rates instead of helping.
Too many distractions
Too many bells and whistles will only get in the way. Multiple calls to action, gimmicky animation, and pages overstuffed with copy and images will cause more frustration than conversion. Visitors should be able to find what they need easily. Avoid clutter and decision fatigue by presenting options in a neat, intuitive, and organized way.
Slow site speed
Consumers are used to websites loading at lightning speed — even a two-second delay can increase bounce rates by 100%! A slow loading time can negatively impact your SEO as well as your UX, so make sure that you keep your site running optimally to prevent your site speed from negatively affecting your conversion rate.
Have you ever entered a building and found yourself hopelessly lost and frustrated because of the layout? Website visitors have even less tolerance for sites that aren’t easy to navigate because they can simply click away and visit a competitor’s site. If your site isn’t intuitive to use, your bounce rates will go through the roof.
Data is powerful and important, but you have to keep your customers’ preferences in mind. If your data collection form is too long and too detailed, you risk your customers abandoning the form altogether. Shorter is always better when it comes to web forms.
Forced account creation
Data privacy is a hot topic, and very few people are willing to hand over their email addresses and details to a website. Give customers the option to checkout as a guest and convince them to sign up with compelling offers and freebies (like e-books) instead of forcing them to create an account before they are ready.
What is the purpose of CRO?
Conversion Rate Optimization (CRO) aims to persuade more website users or visitors to complete the desired action on your website. This ultimately allows you to lower your customer acquisition costs by gaining more value from existing users, acquiring additional new visitors and growing your sales and business.
What is a CRO strategy?
A conversion rate optimization (CRO) strategy is the technique used to improve conversions (such as purchasing an item, signing up to a service for a trial period, or downloading a free e-book) by visitors on a website or app.
What are the best CRO tools?
You will need to use a combination of tools to get the best CRO results. For analytics, we recommend using Google Analytics or Adobe Analytics. Behavioral analysis tools like Microsoft Clarity’s heatmapping tool and feedback tools like Hubspot’s NPS surveys can help gather additional insight that drives improvement. At the same time, AB Tasty makes split and multivariate testing and experimentation seamless and straightforward.
What is a CRO test?
A conversion rate optimization (CRO) test is used to determine which changes to your site will have the best possible outcome. This is usually an A/B or multivariate test, but there are numerous other methods of testing that can be deployed.
How do I improve my conversion rate?
Conversion rates can be improved through many tactics, including shortening your contact forms, adding testimonials and reviews, removing distractions, strengthening your copy and adding pop-ups that create a sense of scarcity or urgency.