What is Conversion Rate Optimization (CRO)?
Conversion Rate Optimization (CRO), as it relates to digital marketing, is the application of a system and processes to convert a higher percentage of visitors into customers.
A basic use of conversion rate optimization starts with a base set of measurements (baseline) and a desire to improve from the baseline.
Conversion Rate Optimization is
- A structured and process-driven approach to improving key metrics associated with your desktop, tablet and mobile experience.
- Defined and measured through key performance indicators (KPIs) such as the number of unique visitors, the number of times those visitors come back, click-through, email opens and form completions – to name a few.
Conversion Rate Optimization is not
- Search Engine Marketing (SEM) designed to increase the volume of traffic sent to your desktop, tablet or mobile experiences. When you have effective Conversion Rate Optimization and good Key Performance Indicators good SEM will increase your traffic volume which should lead to more contacts.
- Search Engine Optimization (SEO) similar to SEM, another activity to increase the volume of traffic sent to your desktop, tablet or mobile experiences. Similar to effective SEM, good SEO coupled with good Conversion Rate Optimization and Key Performance Indicators will increase your traffic volume which should lead to more contacts.
Getting to the Return on Investment
For example, one of our B2B software customers measured the number of web page views of their home page. The number of click-throughs on their main call to action (CTA) was 105:1 – 105 unique visitors for each click on the main call to action.
Through some simple A/B testing, they were able to optimize their home page and decrease the number of unique visitors for each click through from 105 to 87. A 17% performance improvement!
In the example above a 17% improvement increased the number of opportunities to generate new contacts. However, they still needed to convert the contact on their landing page and then win the business. In their case, they forecast 1.39 new customers/mo from these improvements.
The return on investment for this business is calculated as follows:
- The lifetime value of a new customer is ~$30,000.
- The 17% conversion rate improvement created 1.39 new customers/mo or $41,700 of additional lifetime value.
Why Conversion Rate Optimization Matters
Conversion Rate Optimization matters because, as stated in the Acquity Group’s State of B2B Procurement study report: 94% of business buyers do some form of online research and 84.3% start their research on the businesses website.
For B2B business this means you need to be focused on how well your desktop, tablet, and mobile web experiences convert new opportunities for your business.
Read more about conversion rate optimization