Before you can understand the definition of Conversion Rate Optimization, we need to define the word conversion. A conversion is the completion of a goal you’ve chosen for your website visitors. For many eCommerce website owners, a conversion is when a shopper makes a purchase. A conversion could also be subscribing to an email newsletter, downloading a case study, filling out a form, requesting more information, starting an online chat, or making a phone call.
Question: What goals do you want your website visitors to accomplish?
Now that you’ve defined your goals, let’s look at the conversion rate. The conversion rate is the percentage of people that accomplish a goal relative to the number of people viewing your website. If 100 people use your website, and one of them converts, your conversion rate for that goal is 1 percent. If 1,000 people use your website, and one of them converts, your conversion rate for that goal is 0.1 percent or one-tenth of a percent.
Tip: The conversion rate is one of the three most important numbers to monitor on your eCommerce website.
Conversion Rate Optimization, or CRO, is the process of increasing the percentage of visitors that accomplish a goal on your website. Improving conversions requires monitoring visitor activity in search of problems that might reduce conversions. After identifying a problem, the site’s design, content, and or configuration should change to resolve the issue, thus optimizing the conversion rate.
Example: Through the CRO monitoring process, we might determine that Product A is selling at twice the rate of Product B. To the untrained eye, there is no drastic difference between Product A and B that would cause A to be significantly more popular. Similarly, the product page design is the same. This scenario requires analysis and possibly A/B testing to determine how to increase the conversion rate on Product B. We discover that potential purchasers of Product B are abandoning the sales funnel in the checkout process, specifically after the shipping address has been entered. Cart abandonment analysis uncovers a misconfiguration. The shipping cost for Product B is significantly higher than Product A and is reducing the conversion rate. This misconfiguration has been in effect for over three months. Estimates for the increase in revenue based on website traffic, order value, and assumed conversion rate is around $33,000 over the next three months.
Why is your conversion rate important? Simply put, increasing your conversion rate increases your profit without increasing your other expenses, such as marketing and pay per click advertising.
To speak to a CRO pro and learn more about hiring an agency to manage your Conversion Rate Optimization, contact us here.