In today’s age of data analytics, marketers are focused on driving traffic to their sites. But traffic generation is only half the marketing equation.
In addition to bringing visitors to your site, you’ll need to keep them there. Not only that, you’ll also need to convert them into leads and nurture them into becoming loyal customers. 

Getting more out of your existing traffic and leads can compel organizations towards long-term sustainable growth. And this is where conversion optimization comes in.

So, what is conversion optimization, and why should you care?

This post will delve into the crux of conversion rate optimization and explain why your business needs it. Let’s dive in.

What Is Conversion Rate Optimization?

Conversion rate optimization or CRO is a multidisciplinary process of increasing the percentage of website visitors who complete a desired action on your website.  Conversions are the result of users taking specific action on your website.

These actions can include:

• Purchasing a product
• Subscribing to your email newsletter
• Filling out a form
• Signing up for a service
• Downloading a content asset (like an e-book)
• Signing up for a free trial
• Clicking a link

Ultimately, a conversion can be any desired action you want visitors to do on your site that results in you making a sale, collecting contact info, etc.

So how does conversion rate optimization work?

Generally, you analyze your website’s sales funnel to identify ways to improve your site and get more people to complete the desired action.

Next, you devise a hypothesis to test (A/B testing) and then create a new version of your landing page or web page to test against your current version. This helps you determine which variation is more effective at compelling visitors to take action.

Lastly, you implement the variation that convinces the largest percentage of people to take a specific action on your website.

How Do You Calculate Conversion Rate?

A conversion rate is the percentage of visitors who complete a desired action on your website. To calculate conversion rate, divide the number of conversions by your website visitors, then multiply by 100 to get a percentage.

Conversion Rate = No. of Conversions/Total Visitors x 100

For example, let’s say you have an e-commerce store called ShoeParadise that sells shoes. You had 500,000 visitors last month, and 20,000 visitors bought a product from you. In this case, your conversion rate would be:

20,000/500,000 x 100 = 4

Then your conversion rate would be 4%.

A high conversion rate means your website is well-designed, optimized for sales, and appealing to your audience.

A low conversion rate could result from many factors, including poor design, slow loading speed, copy that doesn’t convey any value, poor pricing, etc. If you could achieve a conversion rate of 5% and above, you’ll be miles ahead of the competition.

But higher conversion rates are hard to achieve. For instance, the average conversion rate of e-commerce sites globally was 2.17% in 2020.

Why Do You Need Conversion Optimization?

Investing in conversion rate optimization brings along a slew of benefits. Here are the top 5 reasons to focus more on conversion optimization.

1. You Gain Valuable Customer Insights

One good thing about conversion rate optimization is that you get to test everything before implementing changes on your website.

When testing, organizations can understand their customers’ behavior and collect valuable data that can influence decision-making.

The very first step in A/B testing is data collection. You’ll want to collect qualitative and quantitative data before you begin your tests. Quantitative data provides a good starting point, but numbers don’t tell the whole story.

For that reason, you’ll need qualitative data to better understand the numbers, which means you’ll need to ask customers questions about your product or services.

Qualitative answers will give you more insights into your customers’ perceptions of your brand. For example, qualitative questions may provide answers to why customers are not buying your products, why certain pages have a high bounce rate, etc.

Key Takeaway: The process of CRO requires you to understand your customers better. As a result, you gain valuable customer insights that can help you implement marketing strategies to increase conversions and reduce bounce rates.

2. Increased Transactions & Sales

Let’s see what happens when you have better conversion rates.

For our shoe business, we’ll assume that the company is selling a pair of shoes for $30.

In our earlier calculations, we saw that ShoeParadise has a conversion rate of 4%.

20,000 customers bought the shoes, which produced gross revenue of 600,000 (20,000×30)

That sounds great. But what if the conversion rate optimization efforts paid off, and 30,000 visitors converted. In this case, revenue jumps to $900,000 (30,000 visitors bought shoes@30). Big difference, right?

Conversion rate optimization (CRO) comes down to one key benefit; You get more customers and sales from the same amount of traffic.

Thus, CRO results in increased revenue and profit with no cash commitment, unlike other marketing tactics like PPC that can hit your pocket hard.

3. Make Marketing Budget More Efficient

As CRO strictly focuses on maximizing your website’s performance, there are no additional fixed costs to your business or increase in marketing budget required.

While your variable costs, such as shipping costs, go up in total (due to an increase in sales), your fixed costs like office rent, salaries, and marketing budget stay the same.

Plus, investments can be maximized using conversion rate optimization, thereby decreasing the CPA and increasing your control over the marketing budget.

4. Enhances Customer Trust

Many actions require users to provide you with their contact information (name, phone number, email address) in exchange for content or information about your services.

This means customers need to trust your website before they fork over their personal information. Hence CRO can help you build customer trust and forge relationships that could lead to brand advocacy.

This trust results from consistent marketing and customer engagement, as customers learn more about you and what to expect while you do your best to provide excellent services.

On top of that, CRO helps you optimize your website’s design to make it easy for your customers to find what they need. The positive customer experience also helps to build trust while keeping your site visitors engaged for long.

5. Brings the Right Kind of Traffic

One of the top reasons to adopt CRO is that it attracts the right kind of traffic to your site.

Rather than focusing your marketing on anyone who stumbles upon your website, CRO allows you to channel your marketing efforts to the ‘right kind of people’—consumers who love your products and who are more likely to convert.

Even so, CRO is still an excellent choice for attracting new visitors to your site. As a result, conversion rate optimization multiplies the return on your investment (both current and potential ones) by capitalizing on your website traffic.

And since you already know (through A/B testing) the funnels that drive the best results, you can spend your marketing budgeting carefully by allocating funds to these channels.

6. It’s Great for SEO

While not directly related to improving a site’s rankings on SERPs, conversion rate optimization has distinct benefits for SEO. These include:

Better User Experience

CRO studies what works on your website. Taking what works and expanding on it makes for a better user experience (UX).

Moreover, when users feel happy and content on your website, they tend to stick around. This often leads to increased user engagement and frequent site visits. Increased engagement may signal to Google that your content is relevant and thus rank it higher.

Better Scalability

While your audience size may not increase as your business grows, CRO lets you grow without running out of resources or customers. By tapping into your audience and turning them into buyers, you can grow your business without running out of potential customers.

Better ROI

You can use conversion rate optimization techniques to drive engagement on your website and ultimately make more sales and bring more revenue. The best CRO techniques can boost your ROI, making you get excellent results for the money you’re spending.

Improved Website Efficiency

Rather than focusing on getting new leads to convert, CRO centers around improving your website and landing pages to engage visitors until they convert.

Because CRO is a continuous process, adopting it can help to ensure that your website is running smoothly at all times. And since CRO takes user satisfaction seriously, you need to regularly test and upgrade your site’s efficiency.

Wrapping Up

Conversion rate optimization (CRO) provides an opportunity for businesses to increase conversions without breaking the bank.

Sure, it takes time. But it offers many benefits that are hard to ignore.

It’s cost-effective, customer-focused, drives quality traffic to your website, and can significantly increase your revenue. If you adopt it and follow the best CRO practices, you’ll edge out the competition in no time.