Conversion rate optimization: Difference between revisions

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{{Short description|Concept in digital marketing}}

[[File:Conversion marketing example.svg|thumb|A bar chart showing three stages in a "[[Sales process engineering|sales funnel]]": "saw the advertisement" -> "clicked the advertisement" -> "bought the product". The 3three stages have 2two conversion rates to be optimized.]]

'''Conversion rate optimization''' ('''CRO''') is the process of increasing the percentage of users or website visitors to take a desired action (such as buying a product or leaving contact details).<ref>{{Cite book|last1=Saleh|first1=Khalid|url=https://books.google.com/books?id=USIKL4celYcC|title=Conversion Optimization: The Art and Science of Converting Prospects to Customers|last2=Shukairy|first2=Ayat|date=Nov 1, 2010|publisher=[[O'Reilly Media]]|isbn=9781449397692|___location=[[Sebastopol, California]]|pages=2|oclc=733752533|access-date=May 7, 2021}}</ref><ref>{{Cite book|last1=Ash|first1=Tim|url=https://books.google.com/books?id=d7xvcnxYa1wC|title=Landing Page Optimization: The Definitive Guide to Testing and Tuning for Conversions|last2=Ginty|first2=Maura|last3=Page|first3=Rich|date=April 24, 2012|publisher=[[Wiley (publisher)|Wiley]]|isbn=9780470610121|edition=2nd, illustrated|___location=[[Indianapolis]]|pages=13|oclc=751127244|access-date=May 7, 2021}}</ref>

== History ==

Online conversion rate optimization (or website optimization) was born out of the need of [[e-commerce]] marketers to improve their website's performance in the aftermath of the [[dot-com bubble]], when technology companies started to be more aware about their spending, investing more in website analytics. After the burst, with website creation being more accessible, tons of pages with bad user experience were created. As competition grew on the web during the early 2000s, website analysis tools became available, and awareness of website usability grew, internet marketers were prompted to produce measurables for their tactics and improve their website's [[user experience]].

In 2004, new tools enabled internet marketers to experiment with [[Web design|website design]] and content variations to determine which layouts, copy text, offers, and images perform best. Testing started to be more accessible and known. This form of optimization accelerated in 2007 with the introduction of the free tool [[Google Website Optimizer]].<ref name="auto">{{Cite book|last=Page|first=Rich|url=|title=Website Optimization: An Hour a Day|date=2012|publisher=[[Wiley (publisher)|Wiley]]|isbn=9781118196519|language=English|oclc=940552907}}</ref> Today, optimization and conversion are key aspects of many [[digital marketing]] campaigns. A research study conducted among internet marketers in 2017, for example, showed that 50% of respondents thought that CRO was "crucial to their overall digital marketing strategy"."<ref>{{cite web|last=Davis|first=Ben|date=October 11, 2017|title=Research shows fewer marketers see CRO as 'crucial' in 2017, but is the discipline misunderstood?|url=https://econsultancy.com/research-shows-fewer-marketers-see-cro-as-crucial-in-2017-but-is-the-discipline-misunderstood/|url-status=live|access-date=May 7, 2021|website=[[Econsultancy]]|publisher=[[Centaur Media]]|archive-date=July 28, 2020|archive-url=https://web.archive.org/web/20200728153240/https://econsultancy.com/research-shows-fewer-marketers-see-cro-as-crucial-in-2017-but-is-the-discipline-misunderstood/}}</ref>

Conversion rate optimization shares many principles with [[Direct marketing#Direct response marketing|direct response marketing]] – a marketing approach that emphasizes tracking, testing, and on-going improvement. [[Direct marketing]] was popularized in the early twentieth century and supported by the formation of industry groups such as the Direct Marketing Association, which was formed in 1917 and later named [[Data & Marketing Association]] and acquired by the [[Association of National Advertisers]] following the announcement on May 31, 2018.<ref>{{cite press release|author=<!--Not stated-->|title=ANA to Acquire DMA|url=https://www.ana.net/content/show/id/49074|___location=[[New York City]]|publisher=[[Association of National Advertisers]]|agency=|date=May 31, 2018|access-date=May 7, 2021|archive-date=January 28, 2021|archive-url=https://web.archive.org/web/20210128125937/https://www.ana.net/content/show/id/49074|url-status=live}}</ref>

Like modern day conversion rate optimization, direct response marketers also practice [[A/B split-testing,<ref>{{Cite web|title=Conversion Rate Optimization - Tips & Strategies for 2021|url=https:A//www.mayple.com/ecommerce-marketing-strategy/cro|url-status=live|access-date=May 7, 2021|website=[[MaypleB]]|archive split-date=February 25testing, 2021|archive-url=https://web.archive.org/web/20210225160631/https://www.mayple.com/ecommerce-marketing-strategy/cro}}</ref> response tracking, and [[Test screening|audience testing]] to optimize mail, radio, and print campaigns.<ref>{{Cite book|last1=Caples|first1=John|url=https://books.google.com/books?id=0cBfQgAACAAJ|title=Tested Advertising Methods|last2=Hahn|first2=Fred E.|date=1997|publisher=[[Prentice Hall]]|isbn=9780132446099|editor-last=Hahn|editor-first=Fred E.|edition=5th, revised|___location=[[New Jersey]]|oclc=924986866}}</ref>

== Methodology ==

Conversion rate optimization seeks to increase the percentage of website visitors that take a specific action (often submitting a web form, making a purchase, signing up for a trial, etc.) by methodically testing alternate versions of a page or process, and through removing impediments to user experience and improving page loading speeds. In doing so, businesses are able to generate more leads or sales without investing more money on website traffic, hence increasing their marketing return on investment and overall profitability.<ref>{{cite book|last1=Goward|first1=Chris|url=https://books.google.com/books?id=2N1DwBhcMTkC|title=You Should Test That: Conversion Optimization for More Leads, Sales and Profit or The Art and Science of Optimized Marketing|date=2013|publisher=[[Wiley (publisher)|Wiley]]|isbn=9781118301302|___location=[[Hoboken, New Jersey]]|lccn=2012951871|oclc=1159801038}}</ref>

[[Statistical significance]] helps us understand that the result of a test is not achieved merely based on chance.

There are four main elements of conversion rate optimization <ref>{{Cite web |last=Rich |first=Page |date=2023 |title=The Ultimate Guide to Conversion Rate Optimization (2023) |url=https://www.rich-page.com/cro/conversion-rate-optimization-ultimate-guide/2}}</ref>:

There are several approaches to conversion optimization with two main schools of thought prevailing in the last few years. One school is more focused on testing to discover the best way to increase website, campaign, or [[landing page]] conversion rates. The other school is focused on the pretesting stage of the optimization process.<ref>{{Cite book|last=McFarland|first=Colin|url=https://books.google.com/books?id=Z9B-7cHB5UwC|title=Experiment!: Website conversion rate optimization with A/B and multivariate testing|date=August 17, 2012|publisher=[[New Riders (publisher)|New Riders]]|isbn=9780133040081|___location=[[Berkeley, California]]|oclc=817741617|access-date=September 13, 2020|archive-date=May 7, 2021|archive-url=https://web.archive.org/web/20210507114802/https://books.google.com/books?id=Z9B-7cHB5UwC|url-status=live}}</ref> In this second approach, the optimization company will invest a considerable amount of time in understanding the audience and then creating a targeted message that appeals to that particular audience. Only then would it be willing to deploy testing mechanisms to increase conversion rates.

* '''[[A/B testing]] and personalization.''' This is the process of using A/B testing tools to discover the best converting versions of websites elements or pages, and involves testing different elements on a page, for example the wording, imagery or call-to-action buttons. [[Statistical significance]] in A/B testing helps understand that the result of a test is not achieved merely on the basis of chance.

* '''[[User experience]].''' It is essential to ensure that website visitors can browse and convert more easily without any issues. Improving user experience including using best practices for improving your website navigation, search, forms and user flow. This needs to be done on desktop and mobile versions of websites, as user's needs are often quite different on both.

* '''Conversion research.''' Doing research to discover the issues, doubts, hesitations and needs of users is now a key part of CRO. Once this feedback is discovered from running customer and visitor surveys, user testing and visitor session recordings, you can discover insights for creating website improvements and A/B test ideas that have a higher chance of increase conversion rate.

* '''Website persuasion.''' This helps to persuade your users to convert much more often by using several techniques including writing highly engaging copy, particularly in your headlines and call-to-action buttons, using social proof, scarcity and urgency. A popular source of these techniques are from the book 'Influence: The Psychology of Persuasion' by [[Robert Cialdini]].

In making effective use of these CRO elements, businesses are able to generate more leads or sales without investing more money on website traffic, hence increasing their marketing return on investment and overall profitability.<ref>{{cite book|last1=Goward|first1=Chris|url=https://books.google.com/books?id=2N1DwBhcMTkC|title=You Should Test That: Conversion Optimization for More Leads, Sales and Profit or The Art and Science of Optimized Marketing|date=2013|publisher=[[Wiley (publisher)|Wiley]]|isbn=9781118301302|___location=[[Hoboken, New Jersey]]|lccn=2012951871|oclc=1159801038}}</ref>

== Calculation of conversion rate ==

A conversion rate is defined as the percentage of visitors who complete a goal, as set by the site owner. It is calculated as the total number of conversions, divided by the total number of people who visited your website.

:<math>\mathrm{Conversion\ rate} = \frac{\mathrm{Conversions}}{\mathrm{Number\ of\ visitors}}</math>

'''For example:''', Youra website that receives 100200 visitors in a day, and 1530 of those visitors sign up for yourits email newsletter (yourits owner's chosen conversion to measure). YourThe site's conversion rate would be 15% for that day.

==See also==