What is Conversion Rate Optimization (CRO)?


Conversion Rate Optimization is an important component of inbound marketing
Wondering about all the hype around Conversion Rate Optimization? In this post, we cover what CRO is, where to start and how it’s used!

What is CRO?

Ever hear of Conversion Rate Optimization (CRO)? In a nutshell, CRO is an approach used to increase website activity through actions (downloading an app, newsletter sign-ups, etc.)

Example

If you’ve been pondering over optimizing your site to boost traffic, you probably have a laundry list of to-dos. Or maybe you are only focused on improving SEO to make your site more visible on search engines. No matter what, utilizing Conversion Rate Optimization strategy is an excellent place to start and even more so if you already use a tool like Google Analytics!

If you have GA set up, then you’re one step ahead already! You have access to LOTS of info that’s measurable (more on that later)!

Now to help paint a picture of how you can narrow down your focal point and ultimately find something worthwhile to improve upon (that’s measurable), we’ve come up with a scenario.


Conversion Rate Optimization scenario:

Let’s say that your “Avg. Session duration over time” has dropped and you need to figure out why.

Side notes:

  • At first, keep in mind that you’d be unsure of which action to take because research hasn’t been completed. You’d only be aware of the issue.
  • Also, right off the bat is where a lot of people run into trouble because they end up assuming they know how to solve the problem even before they know what’s causing it!

Now let’s assume the person responsible for figuring out why the session duration dropped already “knows” why it happened (and skips research entirely).

The employee assumes that the decrease stems from the company recently reducing how often their company posts on social media.

So in response, the employee decides to increase social media posts in hopes of improving the chance of driving more traffic to the site. (They base their decision on previous experience during a similar situation; whereas doing this before had unexpectedly boosted Avg. Session duration.)

Now, let’s say that this person’s supervisor also looked into the issue, BUT did the research.

While investigating, the supervisor found out that the overall average sank because referral traffic from organic followers fell significantly during the previous 3-month period. However, traffic from social media had increased since they started posting less.

Then the supervisor did some more research and found that three months earlier, four pages were taken down for editing and never republished. Out of those pages, three of the four pages had high amounts of organic follower referral traffic before they were taken down. So she published them again and started tracking the data for three more months.

At the same time, the employee decided to stick with their original plan of increasing social media posts but didn’t track the results because they were 110% sure it would work.

Fast forward three months:

  • Avg. Session duration had increased, but not to previous levels
  • The organic follower segment had risen dramatically (problem solved on the web pages!)
  • Referral traffic from social media had plummeted to an all-time low

Why? They had lost a majority of their audience due to their fans unfollowing them because of the unprecedented increase in social media posts!


See where I’m going with this?

If you were in that situation, what would’ve you done before implementing any changes? Where would you have started?

(This is where CRO comes into play.)

How CRO Can Help and Where to Begin

Before starting you need a measurable goal. After you decide on the target, take down some notes based on of your analytics, let’s say, from the last 3-6 months. The analytics will show which pages or posts have been doing well, where some improvement needs to happen and which ones need a lot of attention.

Next, jot down any trends that you notice while reviewing the data and pay particular attention to significant dips or increases in page views, bounce rates, social traffic to your site, referral traffic sources, etc. Once you have the timeframes noted as to when the changes occurred, figure out what got changed during that period. Did you implement a new marketing campaign, run an advertisement, etc.?


Tip: Avoid basing CRO goals around what you want to happen, what you think others may “like” or what you think will happen based off of previous experience.


Conversion Rate Optimization is here to help us figure out what customers want. So when you notice spikes in activity, bring back whatever brought it on and then test more from there.

If you aren’t sure what contributed to a change, then it’s time to switch things up and try something new. However, do not implement a new CRO plan that changes more than one or two things at a time.

Your new goal(s) need to make complete sense, measurable and test-worthy. Keep things simple and straightforward. A good rule of thumb (if you’re confused by your plan) is to rethink your strategy until it makes absolute sense.

A/B Testing

Ultimately, Conversion Rate Optimization comes down to researching and testing what works best for your business, customers and what doesn’t. To figure that out, pay close attention to what your audience is doing, how they’re responding to certain things and take note! The ultimate goal is to understand what makes your audience tick.

Ideas, Ideas, Ideas

Starting from scratch? Out of ideas? Not sure what your audience wants?

Send out a poll on Twitter or Facebook! OR begin by jotting down something that you’re curious about (that is measurable – can’t stress that enough!) and start keeping track of conversions with a tool like Google Analytics. Then take those numbers and review them a few months later. Side note: Don’t drive yourself crazy analyzing data every day! It’s a colossal waste of time. Plus, it’s super discouraging because things fluctuate. Daily.


Quick tip: If you don’t already have analytics connected to your site, make sure to sign up for Google Analytics.


>> Fast Forward >>

How to calculate conversions

Next, once you have some numbers to pull, calculate your conversion rate! Conversion Rates can be calculated by taking the number of sales and dividing it by amount of leads. Then you multiply by 100.

For example: say you have 30 sales over the last three months (that came in solely from 75 phone calls).

To figure out your conversion rate, you would need to divide the total amount of sales with how many phone calls you received.

30/75 * 100 = 40%. (you had a 40% conversion from phone calls!)

So how does that help? On its own…not too much. However, if you know the real value of each lead…things start to change.

Finding the value of a lead

Let’s say you sell handmade wallets for $35 each and out of those 75 phone calls; you sold 30 of them.

The leads would get valued at $1,050 for 75 (or $14 for ONE).

How did we figure that out?

Here’s the formula: $1,050/75 = $14.

Why are lead values significant?

When you know the amount, you can figure out how many leads are needed every month to help you hit a financial goal!

Now, let’s say you set a financial goal of $8,000, and that you make a profit of $17.50 on each wallet. To hit your $8K goal, you would need to gain 1,143 leads.

To figure this out:

  • Calculate this first: $17.50 profit per wallet * 40% conversion rate = $7 is your average lead value
  • Then, use this formula once you have the average lead value: $8,000 to break even / $7 = 1,143 leads needed

BAM!

Final words

If you want a better understanding of your audience, Conversion Rate Optimization is the way to go! It can take some time to figure out what works best, what (measurable) goal is most realistic for your business, and how to track (and calculate) your progress over time. Ultimately, the more you work on setting goals and conversion rate optimization techniques, the clearer it becomes!

In the meantime

So there you have it, a few ways to implement your conversion rate optimization plan to start tracking/meeting your goals!

If you’re looking for more tips to improve social media marketing or other online marketing campaigns, check out these posts!:

In the meantime, stay tuned for additional UGH! Media blog posts!

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Please note, this post does not establish a UGH! Media LLC-client relationship. It is for informational purposes only. For additional info, please refer to our disclaimer.

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