# What is conversion rate optimisation?

## Optimising your conversion rate can make companies a hefty amount of extra revenue for an excellent return, but only if done correctly.

First let’s talk about conversion rate, which is the amount of visitors who become customers on your website. The calculation for conversion rate is conversions / visitors = conversion rate.

Here’s some example monthly figures. You can calculate your own conversion rate here

### What counts as a conversion?

Conversions can be anything a business defines as a goal, such as:

• Transactions / sales
• Signing up to a service
• Requesting a quote or information
• Call back requests
• Starting a free trial

Above are macro conversions, you can also include micro conversions as metrics to optimise such as:

• CTA clicks
• Visits to your conversion funnel

### What is conversion rate optimisation?

Conversion rate optimisation (or CRO) is the process of turning more of those website visitors into customers in order to make more revenue through your website. This is done by making your website easier to use, more persuasive, and clearer. Let’s say that by engaging in CRO, we acheived a 20% uplift to the figures we showed you before:

20% uplift would give us 2,160 conversions at a 3.6% conversion rate. That’s an extra 360 conversions. Let’s say your average order value is £50, then that 20% uplift would give you an extra £18,000 in revenue per month… that’s quite substantial isn’t it?

### The trouble with conversion rate as a metric

You could half your prices and your conversion rate might double, hoorah. But wait… profits are negative and now you’re going out of business. Also changes to your traffic composition can change your conversion rate; if you cut your low converting / high traffic display spend then your conversion rate would increase, but you wouldn’t be making any more on your bottom line. That’s why conversion rate isn’t the most reliable metric. It’s an essential metric to track, but it’s variable, that’s why relying on hard numbers like transactions and revenue is more reliable in the long term. If you’ve engaged in CRO for a year, you’ll want to see that your transactions and revenue are higher than the previous year, what matters most is your bottom line.

Also, most conversion rate figures you’ll see base the number of visitors on sessions and not users. If somebody came on your website 3 times then converted, the conversion rate for that person would be 33%. Ideally you’d want to track on a humal-level so we recommend tracking user conversion rate.

### Where does CRO fit in the marketing mix?

Conversion optimisation fits in to your marketing mix as soon as somebody sees an advert, when they land on your website, when they make their way through to a conversion, and even after that conversion has happened. CRO will help to improve the conversion rate of any other marketing campaign you are running.

Imagine you’re assessing what proportion of your budget to spend on PPC, SEO, and social, but your cost per acquisition (CPA) for all channels is a bit too high that it’s almost eating into your margins. You could keep pumping that budget back into those traffic sources to keep getting the same amount of visitors and maintain that tight margin meaning low profitability, alternatively you could reallocate some of that budget (or find extra budget) towards CRO in order to improve conversion rate, reduce your CPA and improve your margins.

### What does CRO involve?

CRO is a combination of multiple principles used to identify problems on a website and to solve them to improve the amount of people converting. It requires skills in marketing, psychology, usability, analytics, reporting, statistics, copywriting plus more. A good CRO programme consists of research, changes, and learning.

#1: Research

This is absolutely essential. Without any user research, any changes you make may not make any difference to conversions, or worse, could harm your conversion rate. To conduct CRO properly and get any results on purpose, you need to research your audience by finding out what they want, what frustrates them on your website and any points of friction, and what needs clarifying, then make changes to resolve these problems. To simplify CRO to 4 words: It’s all problem solving. To research, here’s what you need to do:

• An analytics setup audit (or healthcheck) – If your analytics setup is inaccurate then the data in the next stages could be wrong, and therefore wrong decisions can be made. We constantly find issues like: double tracking (which screws up bounce rate), pages not being tracked, goals not set up, events not set up, revenue in analytics not matching up to the client’s figures, not excluding your own company’s IP address, and more.
• Quantitative data gathering and analysis – Using analytics data to identify drop-off and user journeys, heatmaps to identify clicks and taps, scrollmaps to identify exposure of elements
• Qualitative data gathering and analysis – Using techniques like user testing to see how real people interact with your website, polls and surveys to see what real people say about your website
• Validating your insights – If multiple sources on insights confirm the same thing, then it’s very likely to be a real problem your users are having and solving it will make a difference. Making a change based on one survey response might not be representative to your wider audience, that’s why it’s best to validate your findings.

#2: Making changes

After researching, you’ll be in a position to make recommendations. This will involve:

• Hypothesising your recommendations and creating a strategy – By creating a hypothesis for each change, you are enabling yourself to focus why you are making the change

Source: Optimizely

• Sketching, wireframing, designing, and prototyping – This is essential to make sure that the changes you are recommending will look and function right for your audience. One thing we see quite often is where changes are pushed straight to developers and they design a basic solution that’s the easiest to implement. A little effort here goes a long way.

An example sketch of a fashion ecommerce product page.

• Validating your changes with further user feedback – Not everybody does this step, but it’s well worth the extra effort. This is where your new designs are put in front of users to validate that they are solving the problem you’ve set out to solve before testing / implementing.
• A/B testing (if you have enough traffic) – This is the best way to measure if your change makes a difference to your conversion rate
• Pushing your changes live – Successful A/B tests and changes that just need doing fit into this category. If you can’t A/B test, then you should validate your changes with user research then carefully measure.

An example of an A/B test we ran for insurer CORGI HomePlan which resulted in a 48% uplift in conversions

#3: Learning

After steps one and two, it’s an optimiser’s job to learn what impact the changes had, and feed this back to stakeholders and into further research and changes. It’s an iterative approach and has unlimited potential if the business supports experimentation.

## What can be optimised?

Bloody everything.

Landing pages, homepages, product pages, service pages, category pages, forms, checkouts, baskets, signup funnels, nurture campaigns, confirmation pages, post-sales emails, basket abandonment emails, personalisation, headers, value proposition, and lots more.

Caveat: As long as you’ve got research behind your choices, otherwise you’re just changing for change’s sake.

### What common mistakes do we see in CRO?

• Bias creeping into research / test ideas
• No research or validation conducted before making changes
• Not using a process for conducting research & testing
• Not having a strategy or strategies for what to change
• You’re not testing correctly by calling A/B tests too early, not getting the right sample sizes, and wrongly interpreting data.

Hopefully, we’ve answered your question of ‘what is conversion rate optimisation’ and you’ve now got a taste for it. If you’d like any CRO training, extra information, or to see how our CRO services can help you then you can email us on [email protected] or call us on 0161 713 2434.

Lee Preston

20th October 2019

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