What is Conversion Rate Optimization (CRO)?
CRO can be used to improve any metric on your website that’s important to your business–often called key performance indicators (KPIs)–that you’re trying to improve, but it’s often associated with acquiring new customers, registrations, downloads, etc. Put another way, it increases the percentage of website visitors who experience the “aha moment” (or the must-have user experience) that turns passive browsers into valuable conversions.
At its most fundamental, CRO means figuring out what users are looking for when they arrive at your site and then giving that to them. CRO takes many different forms, based on the KPI you’re trying to improve. Sometimes this involves making your call-to-action more apparent or placing it on a traffic-heavy (but under-optimized) page. At other times this means removing or relocating unnecessarily complicated or time-consuming steps from your conversion funnel, as the added friction can prevent a conversion from ever happening.
Why CRO Matters to Your Bottom Line
You should care about CRO for a few reasons. First, you are most likely paying for traffic to your site in one way or another, and a high conversion rate means a better return on that investment (ROI). It’s also much more cost-effective to convert a higher percentage of the visitors you already have than to attract more visitors. In addition to improving your ROI, optimization helps to defend against the limited attention span of your average visitor by giving them what they want before they tire of looking for it and move on.
- Higher conversion rate = better ROI
- More cost effective than finding more visitors
- Defends against limited patience of visitors
It’s important to understand, however, that optimization is about getting more of the right kind of customers—not just blindly optimizing the conversion rate of a given page or campaign. It won’t do you any good if the people you’re acquiring are the wrong fit for your business. It’s important to keep the focus on optimizing to find more customers who will love your product and help you grow by spreading the word. Everything else is a waste of your time and resources.
Why CRO is So Important
1. There is always room for improvement
No matter how well-designed your site is and no matter how many visitors you’re converting into users, it’s likely you could make the conversion process easier and more painless for them–leading to better results for you.
2. Paid advertising is only getting more costly and competitive.
Spending more on it is not the answer, especially if there are hiccups in your conversion funnel that need to be addressed. CRO works with what you have to help you to identify and deal with those problems first.
3. Optimization is about getting more of the right kind of customers.
It’s not just converting anyone. You are looking for people who will love your product and help your marketing efforts by telling everyone they know how great you are.
4. It’s essentially free.
CRO capitalizes on traffic you already have. This means you aren’t spending more money getting visitors to your site, just doing a better job of converting them once they get there. Optimization increases the return on your current investments, and converting a higher percentage of your current visitors is much more cost-effective than attracting new ones.
5. It lowers your customer acquisition costs (CAC).
In fact, doubling your conversion rate means halving your cost-per-acquisition (CPA), or how much each new customer costs you.
6. CRO helps maximize profits.
Not only that, but your profit is intimately tied to your conversion rate. Because you aren’t paying more to acquire these conversions, that profit goes straight to your bottom line.
7. It gives you more money to spend on additional acquisition.
More profit means extra money to spend on acquiring new users (plus, you already know where to spend it because you know which funnels are bringing in the rockstar users).
8. It makes you more valuable to affiliates and partners.
Not only will you earn more, but so will your affiliates—making you more valuable to them (while your competitors become less so).
9. CRO circumvents the limited attention span of the average visitor
By giving them what they’re looking for sooner (before they have a chance to find it somewhere else).
10. It can mean winner take all.
Based on the concept of the “slight edge” phenomenon (also known as “the winner takes all” or “the winner takes most”), all you need to be successful is to be slightly better than your competitors. So if you optimize your site to deliver what users want in just a slightly better or faster way, even if it’s just a few seconds faster, they are going to go with you.