What Conversion Rate Optimization Really Means

A Look at the Meaning of Conversion Rate Optimization (CRO): Go Beyond A/B Testing

Introduction

Conversion Rate Optimization (CRO) is a heavily misunderstood area of website growth.

Many people believe that CRO means:

• Conducting A/B tests
• Changing color of buttons
• Installing heat maps
• Hiring an agency for CRO

This statement is untrue; CRO is not simply a manner of executing specific tactics; it’s rather a systematic process through which we lower the levels of friction that are experienced between the intent of the user and the successful outcome (business) that they would like to achieve.

In this article, I’ll walk you through what I mean by Conversion Rate Optimization, how the concept works in eCommerce and SaaS (Software as a Service), what tools really matter and why, and ultimately, why the vast majority of CRO efforts are unsuccessful in ultimately driving substantial business growth.

Conversion Rate Optimization (CRO) Defined

At the most basic level, the definition of Conversion Rate Optimization (CRO) is simply an increase in the percentage of visitors to your website and/or product that perform a significant action (purchase, collecting a demo, submitting a form, signing up for a free trial, moving through the opportunity through the appropriate channel).

The definition of CRO pertains to simply answering this question:

If the user has already expressed their intent to take action, then the second question is, “Why has the user not taken that action?”

Thus, Conversion Rate Optimization (CRO) resides within the overlapping disciplines of Behavioral Psychology, User Experience (UX), Analytics, and Engineering – CTR is not a function of Marketing alone.

What Conversion Rate Optimization (CRO) is Not

Before continuing to discuss how CRO can help improve sales for businesses, we must eliminate any misconceptions about the definition of CRO.

CRO is not just about conducting A/B testing, the process of redesigning your website once, only writing copy for a page, or having a tool installed.

Because of these misconceptions, many teams look for “best conversion rate optimization tools,” “free conversion rate analysis tools” and “conversion rate optimization agency” when they haven’t solved the fundamental issues with their website.

The primary purpose of CRO is to eliminate friction in every part of your customer’s conversion.

Friction can take many forms including: unclear value proposition, cognitive overload, lack of trust, poor performance or speed, confusing navigation, lengthy checkout forms or steps.

CRO is the practice of evaluating friction, then removing the friction from the customer journey based on evidence vs. hypothesis.

Understanding How CRO Works: The Actual Framework

CRO is not random testing, CRO follows a repeatable methodology.

1. Analyzing Behavior

The analysis/behavior stage provides you with answers to the following questions/observations:

Where are customers abandoning their purchase?
What actions are they avoiding?
What paths are high-converting customers taking?

To answer these questions, you will want to use your heatmaps, sessions recording and funnel analysis—not to create guesses, but to identify patterns.

2. Formulating Hypotheses

In place of saying, “Let’s test a red button”, successful CRO teams will develop hypotheses similar to “Users are not converting because there is no pricing clarity; it is located below the fold.”

By crafting a hypothesis when working with conversion rate optimization strategy, you will be working in a much deeper/stronger way compared to only doing surface-level testing.

3. Going Through Experimentation (A/B Testing)

Once you have analyzed customer behavior, you can begin to experiment/test your hypothesis.

At this point, you will use A/B Testing platforms, Multivariate Testing platforms and/or Split Testing—and they will always be associated with your hypothesis.

Validation & Iteration

Tests that have been successful should be:

-Rollout carefully
-Monitor for any regression (to see if something is causing an issue)
-They should be re-tested on all segments after rollout. The convert-rate optimization will be a continual process rather than an “event”.

Conversion Rate Optimization for the E-Commerce website

When doing CRO for e-commerce; we focus mainly on reducing “friction” during the purchasing transaction.

Examples of common (e-commerce type) CRO lever(s) include:

-Ability to clearly see product information (product pages)
-Clear pricing information
-Trust indicator (‘trust seal’) for the website (reputation)
-Clear checkout process (including confirmation messages)
-Page Speed (Site Performance)

The keyword searches listed above (“conversion rate optimization e-commerce” & “conversion rate optimization for e-commerce”) exhibit a significant amount of intent to purchase.

Results That Improve Online Conversion Rates

High-impact areas to focus on to see the increase in conversion rates:

-Reducing Number of “Checkout Steps”
-Improving Mobile User Experience
-Having a Clear Policy for Shipping and Returns
-Faster Page Load Times
-Stronger Product Imagery

The following statement solves for the A.I. PPC (keyword-based) prompt: “How do I increase conversion rates for e-commerce?”.

Conversion Rate Optimization for Software as a Service (SaaS)

CRO design practices for SaaS businesses differ from other business types. Instead of just optimizing for “conversion” on one transaction, conversion rate optimization of a SaaS business will optimize for:

-Sign-up to activation (becoming a customer)
-Activation to engagement (engagement with the service after activation)
-Engagement to Paid Conversion (becoming a paying customer)

For many teams it is essential to search for:

-“CRO agencies” that specialize in SaaS; or
-“Agencies that specialize in CRO for SaaS companies.”

Focus Areas for CRO for SaaS

The most frequent friction points for SaaS include:

-Complexity of onboarding
-Overwhelming a customer with features
-The inability of a customer to see the value from the Service
-Creating a seamless “Trial to Paid” transition for the customer.

Because of the overlap of Marketing and Product, using Product Analytics and User Experience (UX), CRO for SaaS has extensive overlap with both.

The Most Important Aspects of a CRO Tool

While most teams are looking to find CRO tools, that is not the only means. Tools should provide assistance to your CRO strategy as opposed to define what your strategy is.

Since we believe that a combination of qualitative and quantitative data provides the best opportunity for determining conversion rate optimization opportunities. You may want to supplement any analytics you have with qualitative research using methods such as user testing and customer interviews.

If you go down this route, you’ll need to think about hiring a conversion rate optimization (CRO) agency when you reach a point where you need external help researching and testing your conversion rate optimization strategies.

Conversion rate optimization agencies focus on helping you identify conversion rate optimization opportunities and can provide a variety of services including user testing and behavioral analytics. There are several conversion rate optimization agencies that specialize in certain types of products or markets. For example, some agencies work with only ecommerce businesses while others might specialize in digital marketing.

Often, the same keywords arose in multiple variations:

“conversion rate optimization agency”
“conversion rate optimization companies”
“conversion rate optimization consultants”

When is the right time to hire a CRO agency?

• When you have enough traffic
• When you have a defined business model
• When you can implement fixes for technical issues that cause barriers to transactions.

What do good CRO agencies do?

Good CRO agencies correctly identify all places where a user can encounter a problem or obstacle completing desired actions.

Design experiments tied to revenue growth.

Collaborate with other design and engineering team members.

Define success metrics based on actual business/money generated.

What do weak CRO agencies do?

Run the same test over and over again and sell you a dashboard instead of insight.

Focus on what the tools do rather than what your business wants to achieve.

Why do most CRO programs fail?

Too many CRO programs fail to determine:

• Why users behave as they do before designing tests to optimize conversion.
• Optimize on small metrics instead of optimizing conversions to revenue.
• Ignore the limitations imposed by the technology used to create the user experience.
• Run too many experiments at once that do not drive enough revenue.
• Treat CRO as solely a marketing function.

CRO will fail every time when it is divorced from Product, Engineering, and UX.

CRO = Business Discipline, Not Marketing Strategy

CRO is a business discipline that should be integrated into the product roadmap, UX design system, Engineering Workflows, and Revenue Planning.

Successful companies view CRO as a science of decision making rather than a method for promoting growth.

How to Properly Measure Success in Your CRO Program

Good metrics for measuring success in any CRO program include:

• The % lift in conversions by segment.
• Revenue per visitor.
• % of completed steps along the funnel.
• The average time it takes to convert.
• Retention impact.

Bad metrics for measuring success in any CRO program include:

• Click-through rate by itself.
• Isolated test win.
• Vanity matrix (time spent on page, pageviews, etc.)

What Does It Cost to Work with A CRO Agency?

Costs to work with a CRO agency vary wildly based on:

• The scope of work (number of products sold online, number of products sold via subscription, etc.)
• The amount of traffic you have to your site.
• The number of tools that will be needed to run the experiments you want to conduct.
• The rate of experimentation you wish to conduct.

That is why the searches “CRO Services” and “CRO Consultant” are often from teams asking how much am I supposed to expect to make from them? Instead of just simply what is the cost?

Final Thoughts on What Is CRO.

Conversion Rate Optimization (CRO) is about understanding a user’s intent, reducing friction, ensuring the user remains on the website, and aligning the user’s experience with the value the business is providing. This is why CRO should be considered a best-practice method for improving the conversion rates of websites. When done right, CRO makes conversion rates a byproduct of clarity and trust rather than persuasion.

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