Companies that put a large amount of focus on CRO will always outperform those who don’t. Why? Because it’s the most efficient way of improving your return on investment by increasing sales volume, cutting costs, and improving profitability. Businesses who only focus on driving traffic to their website miss out on a massive opportunity to grow their business more sustainability while increasing their profitability.
What is CRO?
CRO means conversion rate optimization. The name, however, is a little misguiding. What I mean, is that CRO isn’t about increasing conversions. It’s about creating sustainable business growth and increased profitability through a methodical approach based on data.
If you purely want to increase conversions you give away everything for free. If Amazon started to give away all their products for free, then their conversion rates would sky-rocket.
If this happened, then Amazon would no longer be able to stay in business because they won’t be making any money.
This is why it’s important to focus on the bigger picture rather than obsess with small details.
Why is conversion rate optimization Important?
If you spend $100 and get 10 sales, then that means your cost per sale is $10. If this is profitable, then you would logically want to spend more money in order to increase the number of sales.
This is why, according to Econsultancy, for every $92 spent acquiring traffic, only $1 is spent converting them.
A much more efficient way of doing things is to create a process that allows you to focus solely on increasing the amount of paying customers with that traffic you’re already paying for.
If you optimize for conversions can get 20 sales for the same $100, then your cost per sale drops down to $5. You dramatically increase both your revenue and profitability at the same time.
4 Tips and Reminders for CRO
CRO uses the scientific method in order to create a methodical, data-driven, approach to creating sustainable growth and increased profitability. This process goes as follows: observe, hypothesize, test, analyze, and repeat.
Opinions and guesses can cost you a lot of money. You must always start your CRO process with thorough research that consists of the following methods of analysis: technical, heuristic, web analytics, mouse tracking, qualitative, and user testing.
Keep your data clean and organized. If you are testing too many variables at one time or don’t isolate the testing variable as much as possible, then it can ruin your testing results. What may, in the short run, seem like an increase in sales will eventually decrease your revenue.
Allow for enough time for your testing. Often times, people will jump the gun and cut their testing phase short. This will prevent you from receiving a big enough sample size in order to know that your results are true. Many times a test that runs short will end up having a negative effect on your overall growth.
Conversion rate optimization is about positive growth and increased profitability–not just increasing conversions. The end goal should always be in mind while you’re optimizing for better results. Being short-sighted will oftentimes lead to negative results. Performing CRO will give you significantly better results than optimizing your other marketing channels alone. Make sure to follow the process in the right order, don’t skip any steps, isolate your testing variable, and run your tests long enough for ample data to be collected.