CRO Experiments That Actually Move Revenue

Introduction

The majority of conversion rate optimisation (CRO) programmes fail for one specific reason – They optimize for tests that are easy to accomplish, instead of optimising for actual revenue.

Companies boast about their achievements of:

• Winning colours for buttons
• Increased clicks
• Higher engagement
• And very little happens in terms of revenue.

As a result of this, many companies purchase CRO tools, partner with CRO Agencies to implement CRO programmes, and utilise A/B testing software for extended periods before questioning whether CRO actually produces results.

But, in actuality, the truth about Conversion Rate Optimisation is:

CRO works – when experiments are tied to monetary leverage, instead of behavioural and surface reactions.

This Guide will outline the CRO experiments that increase revenue, what most tests fail to accomplish, and how to prioritise experimentation if the objective is to increase revenue, as an eCommerce or SaaS Company.

Think of your experiments organized by tier.

Tier One: [Revenue-Critical] Experiments (Big Impact).
These are the experiments that deal with:

• Willingness to purchase
• Speed to value
• Finalization of the transaction

Tier Two: [Funnel Acceleration] Experiments.
These are the experiments that eliminate/eliminate friction between steps.

• Simplified checkout
• Clear onboarding instructions

Tier Three: [Engagement] Experiments.
While this category of experiment will not necessarily lead to increased revenue, it impacts user behaviour.

• Scroll Depth.
• Feature Clicks.

Tier Four: [Appearance] Experiments (Little Impact).
These are experiments that look good when you are running a report.

• Colour of Button.
• Font Change.

The majority of revenue for e-commerce comes from tier one and tier two experiments.

CRO Experiments That Drive Ecommerce Revenue

Ecommerce CRO is transactional; hence, it has an immediate and measurable impact on revenue.

That is why people are searching for conversion rate optimisation and conversion rate optimisation ecommerce, as they have high commercial intent. Some examples of CRO experiments that drive revenue in ecommerce are:

1. Checkout Friction Reduction

• Why it works: The checkout represents the last gate between user intent and revenue.
• Examples of high impact checkout friction reduction experiments include:
• Shortening the length of the form fields required to checkout.
• The use of a guest checkout button in lieu of a mandatory login.
• Utilizing a single-page checkout vs a multi-page checkout.
• Prioritization of payment types.

The checkout friction reduction experiments will yield significantly greater results than tests conducted on product pages and homepage pages.

• Revenue Driver: The checkout completion rate.

2. Pricing Transparency

• Why it works: A lack of pricing transparency (or surprise) leads to abandonment of the cart.
• Examples of pricing transparency CRO experiments that drive revenue in ecommerce include:
• Displaying shipping costs before payment.
• Displaying the total amount of the order before payment.
• Displaying the taxes/fees associated with an order before payment.

Pricing transparency CRO experiments drive revenue by providing an experience where the user does not abandon their cart due to price shock, but rather finds it easy to find the total cost of their order.

• Revenue Driver: The cart-to-purchase rate.

3. Trust Signal

• Why it works: Most ecommerce abandonment is based on trust vs desire. High impact trust signal experiments may include:
• Product reviews/ratings next to the “Buy Now” button.
• Clear policies on returns/refunds.
• A “security badge” on the checkout page.
• A “Delivery Guarantee.”

In most cases, trust signal CRO experiments will yield far greater results than design changes because trust signals will reduce the perception

#Conversion Rate x Average Order Value = Revenue Lever

3. Experiments to Improve Value Framing on Product Pages

Why They Work:

• Customers Buy Outcomes, Not Features.
• Experiments That Drive Revenue:
• Revising Value Proposition Descriptions for Products
• Rearranging Benefits Listing Based on Priority of Customers
• Using Comparison Framing
• At the Intersection of Ecommerce CRO and Messaging Strategy.

SaaS Revenue-Driving CRO Experiments

SaaS CRO is Often Higher Leverage with Delayed Impact.

• This is Why Companies Look for:
• CRO Agencies That Specialize in SaaS
• CRO Agencies Specializing in SaaS Companies.

4. Activation Path Experiments

Why They Work:

• In SaaS, Users Do Not Convert Until They Experience Value.
• Revenue-driving Activating Path Experiments Target:
• Reduce the Amount of Time it Takes for Users to Experience Their First Value.
• Simplify Onboarding Steps.
• Guide New Users to the Aha Moment.

Although Activation Path Experiments may not Yield any Immediate Revenue Signals, They Improve User Lifetime Value Dramatically.

Revenue Lever: Trial-to-Paid Conversion x Retention

5. Trial Limitation Experiments

Why They Work:

Full-Time, Unlimited Trials Oftentimes Delay Purchase Decisions Rather Than Enabling Them.

• Some of the Highest Impact Trials Limits Tests are to Use:
• Feature Limited Trial Offerings.
• Time-Boxed Access to the Product.
• Usage-Based Gating.

These tests do not Change User Experience, but Change the Sense of Urgency that is Associated with Purchase Decisions.

6. Pricing Pages Types (SaaS-Specific)

Why They Work:

• Pricing Pages are Decision-Pages. They are not Just Informational.
• Pricing Revenue Drivers are:
• Pricing Plan Anchor
• Feature Package
• Monthly vs Annual Emphasis
• Enterprise CTA Type.

These Tests Affect the Amount of Revenue per Customer, not Just Conversion Rate.

7. Upgrade Trigger/Prompt Experiments

Why They Work:

Users will Upgrade When the Value Received is Balanced by the Friction of Furthering the Purchase.

Some Examples of High Impact Upgrade Trigger Tests are:

• In-Product Upgrade Prompts at Utilization Levels
• Contextual Messaging when Upgrades are Needed
• Using Gated Feature Previews.
• These Tests Outperform General Pricing CTA’s.

Not Enough to Just A/B Test

Most companies that are doing CRO believe that it is a matter of using the right tools to do CRO, whether they be:

The Tool To Use A/B Test For Web Sites

Tools for Conversion Rate Optimisation

Using the right tool is great, but it is only how you do it that matters; the value of your tools is derived from doing things strategically.

Tools like Optimizely and VWO allow you to do the following:

• Run Controlled Experiments
• Reduce Deployment Risk
• Measure Impact Effectively

However, neither tool determines for you what to Test.

Generating New Revenue Comes from Choosing the Right Experiments Rather Than just Running Lots of Experiments.

The Right CRO Experiment Should Answer These Three Questions:

• What Economic Action Are we Changing?
• Why are Users Not Making This Action?
• What Change Directly Addresses The User’s Current Blocker?

If you can’t answer all three questions above in a clear manner in every experiment that you design, your experiment is unlikely to generate new revenues.

A Reason Why Many CRO Agencies Do Not Generate Revenue

Due to this failure, many companies start looking for:

• CRO Agency
• CRO Consultant

Most CRO Agencies Fail Because They Only:

• Optimise the Most Obvious Areas of UX
• Do Not Modify Prices, Or Allow A User To Checkout
• Look for Quick Wins For Their Case Studies
• Use Vanity Metrics As A Measure of Success

Good CRO Partners Know How To Influence Revenue, Not Just Change Design.

The Difference Between Revenue And Vanity Metrics

Vanity Metrics

• Click-thru Rates (CTRs)
• Scroll Depth
• Time on Page

Revenue Metrics

• Conversion Rate to Purchase
• Trial-to-paid Conversion Rate
• Revenue Per Visitor (RPV)
• Expansions Rate

CRO Experiments Should Be Evaluated On Revenue Movement, Even If The Signal Is Delayed.

Strategies for Prioritizing the Revenue Impact of CRO Testing

A Common-Sense/Real-Word Framework to Prioritize:

• Identify the Conversion Event That is of Greatest Value to Your Company
• Identify any Friction Points Preventing Users From Completing That Conversion Event
• Trial Run Changes That Get Closest To Cash/Budget
• Leave Out Ideas With Low or No Revenue Impact (Cosmetic Only)

Where this Framework Applies:

• Ecommerce Checkout Process
• SaaS Activation Process
• Pricing Path and Upgrade Process

How Long It Will Take To See Revenue Impact From CRO Testing:

Many people believe it takes a long time to get revenue from CRO testing, which simply isn’t the case. For example, testing different versions of an ecommerce checkout process can provide results in a matter of days; however, if you’re testing the SaaS activation process, depending on how many steps there are, it can take multiple weeks before you see any results from the testing of the various options. On the other hand, testing for pricing will typically take the longest; however, the rewards are usually much greater.

In the end, it is not a matter of wanting the results quicker, but managing your expectations.

You May Experiments That Might Have Appeared to Have Value and Delivered Little to No Value:

There are many different types of experiments that can be performed. However, the following are the most common, and you should avoid testing them, as they are unlikely to provide any meaningful revenue impact:

Making major changes to the Hero Headlines in your site or store without performing proper analysis/investigating what users want.

Testing the effectiveness of the colour of button(s) in your store

Generic personalisation; multiple generic personalisation options are ineffective.

Over-testing low-traffic web pages, due to the lack of meaningful volume; hence generating little to no meaningful conclusions.

Wrapping It Up: CRO = Revenue Engineering

CRO does not involve:

• Making Web Pages More Attractive
• Increased User Engagement
• Increase the Quantity of Tests Being Conducted

CRO involves engineering/creating experiences that make it as easy as possible for users to purchase and/or upgrade.

Revenue-Contributing Experiments:

• Reduce Friction on Decision Points
• Increase User Clarity Where There is Uncertainty or Confusion
• Create Alignment Between The User Experience and Their Intent

Everything Else is Noise!

Extended FAQs