Conversion Rate Optimization: Quick Start Guide 2024
Learn how to optimize your business website for more conversions and higher revenue
What Is Conversion Rate Optimization?
A “Conversion” occurs when a website’s visitor does what a marketer wants them to do. What counts as a “Conversion” depends on your website and your goals. For eCommerce sites, a Conversion is usually when one of your visitors makes a purchase.
For other businesses, Conversions are more difficult to define. For example, a SaaS company that sells a subscription service might record a conversion for each visitor who starts a free trial.
At every stage of the customer journey, you lose some of your potential customers. This is often described as a Conversion Funnel, where the final stage of the funnel is a completed goal. Conversion Rate Optimization aims to reduce the number of customers you lose at each stage, maximising the Conversions you get from your traffic.
Definition: Micro-Conversions
These usually involve a small interaction between a customer and your business. For example, when someone watches a video, follows you on social media, or provides some contact information.
Definition: True Conversions (or “Meta Conversions”)
These are the ones that matter, because they affect your revenue. Completing a purchase, buying a subscription or committing to an appointment, all count as true Conversions.
Conversion Rate Optimization allows digital marketers to capitalise on the traffic and leads they manage to acquire. Using a combination of analytics, behaviour research and testing, CROs make their Conversion Funnels more efficient – increase their revenues.
Conversion Rate Optimization:
Why Does Your Conversion Rate Matter?
Most marketing teams focus exclusively on driving traffic to their websites. This “Spray and Pray” approach pushes as many visitors into the funnel as possible – assuming that a set number of them will make a purchase in the end.
However, that strategy only works for businesses that serve a very broad customer base and sell a product that is usually purchased on impulse. It also relies on the assumption that there is an unlimited pool of potential customers to draw from.
Spray-and-Pray vs The Real World
Think about a country like Sweden. It has a population just shy of 10 million people. To succeed in this market, a business needs to make the most of all the traffic they receive. Instead of simply becoming more visible, they need to provide more value and better customer experiences.
As such, it’s not surprising that the majority of world renowned experts in conversion optimization and neuromarketing are from countries like Latvia (Peep Laja), the Netherlands (Bart Schutz, Ton Wesseling) or Sweden (John Ekman).
Of course, population size is not the only reason that businesses focus on conversions…
Acquisition Strategy
{ie. Advertising, PR, CPC}
- Immediate impact on total sales
- Pay for what you get (clicks, leads, etc.)
- Suits any size of business – at any stage
- Can still deliver 0 sales
- High level of waste
- Does not suit every type of business
CRO Strategy
[A/B testing, CRO agency]
- Pay once, see continuous returns
- Improves customer experiences
- Lowers the cost of acquisition (CPA)
- Limited by your traffic
- Can be tricky, may require specialist skills
- Takes time to deliver return
Conversion Rate Optimization as a Competitive Advantage
When Amazon launched in 1995, online competition was non-existent. Even so, it was one of the first online businesses to develop and promote CRO internally. Over the years, Amazon has become the benchmark when it comes to Conversion Rate Optimization. A recent study found that Prime customers converted on between 10 and 15% of sessions.
In a global environment where cost-per-click is always increasing, and where the competition for attention has reached a fierce pitch, it is important for online businesses to get as many sales as possible from their traffic.
Learn how to enhance your store’s Conversion rate: eCommerce Conversion Rates
Conversion Rate Optimization Case Study:
High Rise
High Rise is a SaaS company that builds programmes for managing leads. In 2016, the company began experimenting with the landing page they had used for over a year.
Long-Form Version
The first iteration was a long-form page with fewer images and more text. A successful A/B test demonstrated that the page converted 37.5% more frequently than the original.
Optimized Version
A further iteration, featuring a photograph of a smiling person, was compared to both the original and the alternative version. When these tests were complete, it was found that the page with the photograph converted over 100% more frequently than the original.
The results from this experimentation project remind us that SaaS conversion rate optimization is a continuous process, and that it doesn’t stop once you’ve found an improvement.
How To Calculate Your Conversion Rate
To calculate your conversion rate, you need to know the number of unique visitors and the number of conversions you have received over a particular time.
To find your conversion rate, you divide your conversions by your visitors – which will show you how many conversions you can expect to receive from each visitor. To turn that number into a percentage – showing you how many conversion you can expect from 100 visitors, you simply multiply by 100.
This only works for situations when a customer is only likely to convert once. For other situations, you may prefer to calculate your conversion rate by sessions
When comparing the conversion rate of two different pages, the difference between the two figures is given as another percentage. We call this “Uplift”.
For example, if we assumed that each of the pages tested by High Rise (in the example above) received 250,000 visitors, and that the original page had a SaaS conversion rate of 3%, we could work out how many conversions each of the other pages received.
| PAGE | UPLIFT | VISITORS | CR | CONVERSIONS |
|---|---|---|---|---|
| Original | - | 250,000 | 3% | 7,500 |
| Long Form | 37.5% | 250,000 | 4.125% | 10,312 |
| Optimized | 102.5% | 250,000 | 6.075% | 15,187 |
Conversion Rate Optimization:
Problem-Shooting Low
Conversion Rates
Any page can be improved, but a page that is performing especially poorly may have a simple solution. Problem pages usually have one of these three serious flaws…
Lack of Trust
Consumer research has identified a “Trust Ceiling” beneath which online shoppers are not prepared to engage with a website. That means trust is an essential component in any online purchase.
To make sure that potential customers trust your store, you need to provide a number of authenticating signals:
- Customer reviews
- A valid SSL certificate
- Trust signs
- Design and formatting
A Lack of Clarity
Business websites that expect a customer to make a purchase should provide a clear value proposition and make their product as tangible and concrete as possible.
A customer needs to know exactly what they will get, why they should want it and how they can buy it.
Unnecessary Hurdles
Hidden costs, having to make an account, and a complicated checkout, all reduce the likelihood that a customer will make a purchase.
A recent survey found that half of its subjects had abandoned a purchase in the last 3 months due to hidden charges (such as delivery costs), and over 1 in 5 had given up on a purchase because the checkout process was too complicated.
To build landing pages that convert, see: How to create a high-converting landing page
Conversion Rate Optimization:
What is an average conversion rate?
A number of high-profile studies have been conducted in the past three years, producing wide-ranging figures for the average online conversion rate. In 2018, a report by IRP Commerce report placed the average conversion rate at just 1.55%. By contrast, a study by Invesp from the second quarter of 2019 put the number at 2.58%.
It is generally accepted that the average falls between 1.8 and 2.5%, but this can vary a lot between sites and different industries.
Fashion websites have some of the lowest conversion rates (between 1 and 2% according to most online indexes.) By contrast, specialist online stores tend to have higher conversion rates. Pet supplies and arts-and-craft stores convert with between 3-4% of their sessions.
What these figures show is that it is not just web design that matters – the way people search for products is just as important.
For more detail, read the full guide: Improving Average eCommerce Conversion Rates
The Amazon homepage from 2012
Conversion Rate Optimization Case Study:
Amazon
According to a now-famous investigation by the consultancy Millward-Brown Digital, Amazon converts on 13% of online sessions. Compared to the average figure (between 1.8 and 2.5%) that is a staggering number.
Rather than a single conversion rate optimization project, Amazon’s statistics are the result of continuous A/B testing. Founder Jeff Bezos once noted:
Our success at Amazon is a function of how many experiments we do per year, per moth, per week, per day.
Amazon developed its own testing system Weblab between 2010 and 2011, and has scaled up continuous, automated testing almost every year since then. It ran 546 tests in 2011, 1092 tests in 2012 and, by 2013, it was running 1976 tests a year.
Conversion Rate Optimization:
CRO Strategy
Depending on their resources and expertise, as well as their aims and targets, companies adopt different Conversion Rate Optimization strategies.
Customer-centricity
Businesses like Amazon focus on making their service as helpful as possible for customers. Recently, this has often involved using AI to support personalised customer experiences.
This is more difficult than it sounds, and it involves a considerable amount of lifecycle analysis.
User-Experience
Making a website more user-friendly is a reliable way to increase conversion rates.
However, it is very difficult to predict where a website’s design will frustrate customers, so techniques like user-testing are important.
Personalization
In recent years, a number of eCommerce platforms have implemented personalisation features to make their websites specific to the individual using them.
Whilst this has been shown to increase conversions for the largest web platforms, there is little evidence that it has the same effect elsewhere.
Adapt or Die: The Agile CRO Strategy
Over the years there have been hundreds of “best-practice” principles and design fads. For example, online businesses used to be obsessed with keeping the conversion funnel as short as possible (a trend that has been reversed in recent years).
As a result, there is only one conversion rate optimization strategy that can claim 100% success. Continuous data-driven optimization, underpinned by an agile development structure, is the secret to long-term success. To put it another way, adaptation is the only way to survive online.
To read about the agile conversion rate optimization strategy, see: CRO Strategy
Conversion Rate Optimization:
CRO Tools
CRO Tools
Most businesses do not have in-house developers to edit their website and feed data back to the marketing team. That means that most conversion rate optimization projects require a range of different tools. These are the four kinds of tools available to digital marketers.
All the prices given here are the cheapest options (per month, based on an annual plan) for a website with 20,000 unique visitors per month.
Analytics Tools
Analytics platforms give you all of your KPIs (traffic, bounce rate, assisted conversions, conversion rate) in one place. Google Analytics is the standard, but other options are more powerful and user-friendly.
Tests and Assays
Heatmaps, surveys and session recording tools allow you to study user behaviour on your website. That means you can isolate problem areas and fix them, fast.
UX Testing Tools
User testing tools subject your website to a rigorous examination, revealing otherwise-invisible strengths and weaknesses.
A/B Testing Tools
A/B testing tools allow you to compare two versions of your website and identify valuable improvements scientifically.
For a full survey of the best tools for conversion rate optimization projects, see: CRO tools
Conversion Rate Optimization:
How Do You Optimize Conversion Rates?
How Do You Optimize Conversion Rates?
There are three components to a conversion rate optimization project: analytics, investigations and testing. Each of them can be used as part of a contained exercise, or they can be combined as part of a continuous process of trial and improvement.
1) Use Analytics
Google Analytics and other analytics platforms allow you to monitor KPIs like your conversion rate. Within Google Analytics, the best way to optimise your website with iterative adjustments is to set up a custom funnel for your principal goal.
Setting Up a Custom Funnel in Google Analytics
Once you have specified your goal, setting up a custom funnel is simple. Simply navigate to the Admin screen and open the “Goal Settings” for your primary goal. From there you can assign a monetary value to your goal or create a custom funnel. Once this custom funnel has been created, you can access dedicated Conversion Rate and Cart Abandonment reports in the “Goals” section of your view.
2) Use Investigations and Assays
Understanding how people are really using your website helps to guide each aspect of conversion rate optimization, To explore your customer behaviour, you need to use an assay method to gather data. Some of the most common techniques are:
Heatmaps
Heatmaps display mouse and scroll tracking data in a simple visual display, showing you whether your page is structured
correctly.
Surveys
Customer survey tools present simple, but specific, questions to your customers when a condition is triggered. Asking the right questions is key.
Session Recording
Session recording tools capture live footage of a user interacting with your site. They can set up with triggers so that you only capture certain sessions.
Tracking patterns in user behaviour takes time and can be a frustrating process. However, even seemingly minor insights can save you months of fruitless testing.
3) Use A/B Split Testing
A/B testing, split testing and multivariate testing allow you to test ideas for improving your website. By comparing the way live traffic responds to different versions of the same page, you can optimize your website without the risk of losing conversions.
A/B Testing Resources
For best-practice and technical guide to A/B testing, written by CRO experts, see:
Conversion Rate Optimization Case Study:
Marks & Spencer
Between 2013 and 2014, the British retailer Marks and Spencer redesigned their website, adding videos, high-definition images and a new registration system.
By March 2014, the digital sales figures for the weeks after the website’s launch were available and online sales had fallen by 8.1%. By prioritising aesthetics and branding over functionality, M&S had made it harder to buy from them.
In subsequent years, Marks and Spencer adopted a more data-led approach to optimization, involving both A/B testing and CRO agencies. The store achieved a number of significant conversion rate gains.
In 2016, by personalising their homepage with a user’s previous purchases, Marks and Spencer achieved a 6% increase in conversions.
Conversion Rate Optimization:
What You Need To Know Before
Working With a CRO Agency
What You Need To Know Before
Working With a CRO Agency
There are hundreds of CRO agencies in the UK alone. Choosing the right one for your business can take time, but it will save you money in the short term and make you more in the future. If you are interviewing a CRO agency, these are some questions you should always ask.
1. What do you need to know about my company?
It seems basic, but this is probably the most important question you can ask. Conversion rate optimization is different for every business and every website, so you need an CRO agency that is focused on your circumstances. An “expert” with a simple formula is unlikely to do you conversion rate any good.
2. What is the least successful project you have worked on?
This is an important “red flag” indicator. Every CRO agency has the occasional tough assignment, and the important thing is to learn from them. A CRO agency that claims never to have had a setback should raise your suspicions immediately.
3. Can you guarantee an increase in my conversion rate?
This question has a single correct answer: no. If your potential CRO agency tries to guarantee you more sales, the chances are they don’t really know what they’re doing. So, make sure your CRO agency is frank, open and honest with you from the start.
There are a number of other essential questions that you should ask any CRO agency you are considering hiring. For the full list, see the 21 Questions to Ask Before Hiring a CRO Agency
Conversion Rate Optimization:
Common Errors in Conversion Rate Optimization
Conversion Rates are a relative term. That means they can be affected by changes in the size and type of traffic your website receives. They will also change according to the way you package your products.
Because of this, there are two misleading Conversion Rate effects you should watch out for.
1. The Evangelism Paradox:
Marketing campaigns that increase your traffic but change who is visiting your site might reduce your conversion rate. You will still be making more conversions, but the proportion of visitors who convert will be lower.
2. The Bundling Problem:
Similarly, changing the way you sell your products (for example, by turning a monthly purchase into an annual purchase) may reduce your Conversion Rate whilst still increasing your revenue.
Also read the 13 Most Common A/B Testing Mistakes (And How to Avoid Them)
Conversion Rate Optimization:
Working With Convertize
At Convertize, we apply the best practices we have seen from over 20 years working in the industry. That means combining data with real human behaviour.
We work with our clients to understand their customers and we also use the full suite of analytics and assays to investigate the technical aspects of their website.
We also have a strong emphasis on developing our clients’ optimization skills, so that they can develop, over time, into the world’s best-in-class businesses.
Analytics
We use analytics to study acquisition and site performance. Every CRO project includes loading speed tests, mobile audits, SEO and Funnel analysis.
User Behaviour Analysis
To understand users, we conduct heat-mapping, session recording, journey analysis and customer segmentation. In addition, we perform email and exit surveys.
A/B Testing
Our engineers provide technical support throughout. We use our purpose-built A/B testing tool, so there is no lag between analysis and implementation.
