Conversion Rate Optimization - How to turn prospects into customers
If you already have a website that is pulling reasonable traffic, then it should interest you to turn more of your website visitors into customers and you will want to do as much to optimize the rate at which visitors can become customers.
This guide will walk you through much of what you need to know about conversion rate optimization, why it is important and how you can go about building your own optimization strategy. The goal is to help you improve the performance of your website, as well as the tools you’ll need to be successful.
- A Simple Guide to Website Performance Evaluation
- Benchmarking for Website Performance on Search Engines
- Boost Your Website SEO with Google Analytics
Here are the areas covered in this post:
- Understanding Conversion Rate Optimization
- The Basics of Conversion Optimization
- Conversion Optimization Strategy and Plan
- Conversion Optimization Techniques
- Conversion Optimization Tools
- Understanding Conversion Rate Optimization (CRO)
A conversion is any specific action taken by your prospects, anywhere throughout your sales process, on your website or outside of it. For an e-commerce store, the most important action would be that a product is purchased. But depending on the type of business you run and your business model, there could be many different actions required some would be as simple as reading an article.
So, a conversion could be purchasing a product, signing up for a newsletter, registering for a free trial, downloading an ebook, clicking on an advertisement and so on. You may also go one step further and break each major action into smaller micro-steps. Thus, for example, you may want to break down the main action of purchasing a product into the following steps:
- Clicking on a Facebook or AdWords ad.
- Visiting the product page.
- Adding the product to the cart.
- Filling out the order form.
- Checking out / making the payment.
- Receiving the product.
- Returning the product for a refund.
- Coming back to purchase more/other products.
- Common Reasons Why Your Website Is Not Converting
- 20 Top SEO Techniques that Produce Good Results
- 20 Ways You Can Reduce Your Website Bounce Rate
- A Guide to Conversion Rate Optimization
Understanding what conversion rate means
Conversion rate represents the percentage of people who complete a specific action. By measuring conversion rates, you can find out if your efforts are effective and efficient. You can also compare different efforts to decide which one performs better. Generally, the higher the conversion rate, the better the performance of your online effort would be judged.
What the can we call a good conversion rate?
Conversion rates vary from action to action, business to business and industry to industry. Therefore, a good conversion rate will be relative and not a question that is so easy to answer. However, some available data can allow us to set some benchmarks.
One such source is a study performed by WordStream where they analyzed thousands of AdWords accounts with a combined annual spend of $3 billion. The results were short of amazing.
- The first conclusion is that there is a huge gap between the worst and the best performers.
The median click-through rate (CTR) for all accounts in the study was 2.35%. The worst-performing quarter averaged conversion rates of less than 1%. The best-performing quarter averaged 5.31% or more.
Most surprisingly, however, the best 10% achieved conversion rates of 11.45% and above. And, this data isn’t for individual landing pages. These advertisers are averaging 11.45%+ conversion rates across their entire accounts!
Now, obviously, this data doesn’t take into consideration the types of offers made in the ads (for example, an offer for a free ebook would likely convert much better than an offer for a high-ticket item with limited appeal).
At the same time, the difference between the worst performers and the best performers is enormous.
The lesson here is that, even if you’re already achieving median-level CTRs from your AdWords ads, there is a significant room for further improvement. In fact, the difference between the best and the average performers is over 100%.
- The second conclusion is that conversion rates differ by industry
- The third conclusion is that conversion rates differ by marketing channel. Tthe average CTRs from AdWords ads in Google Search were almost 7 times higher (at 3.17%) than the average CTRs from AdWords ads in Google Display Network (at 0.46%). So, not all marketing channels are created equal. At the same time, this doesn’t automatically mean that a channel with lower CTRs is worse than a channel with higher CTRs. Many other factors come to play, including the total cost per acquisition, the average customer value, revenue and profit per transaction, your business objectives, etc.
Now, Lets Understand What is Conversion Rate Optimization?
Simply understand conversion rate optimization (CRO) to be what you do to improve your conversion rates. Most definitions imply or state that the optimization takes place on your own website. However, as we already discussed above, conversions also take place outside of your website, too.
From that perspective, CRO can be defined as a process that leads to more of your target audience members completing a desired action. It follows therefore that Conversion rate optimization is a process of analyzing the behavior of your target audience and making adjustments to various elements of your sales process that leads to a higher percentage of people completing your goal.
All individual conversion rates that you measure along your customers’ journey become your key performance indicators (KPIs), which will guide your optimization work.
Summarized, conversion rate optimization is:
- A structured and systematic approach to improving the performance of your marketing funnels.
- Informed by data, specifically, analytics and user feedback.
- Defined by your unique goals and objectives.
Why is conversion rate optimization important?
Why do have to dwell so much on Conversion Rate Optimization? But suffice it to say that the biggest concern of most website owners is how to get more people to see it. The number of unique visitors then becomes a source of joy. But as traffic flow does not match the sales that comes in, website owners begin to realize that not all traffic is created equal and that certain types of traffic produce better results.
This is when they start to care about conversion rates and optimization.
CRO is important for several reasons:
- Everything can be improved. No matter what you already did and how much time you spent optimizing for higher conversions, your results can likely be further improved.
- Advertising is getting more expensive. At one point, you will hit a ceiling beyond which spending more per customer is no longer profitable for you. Optimizing for higher conversions counterbalances the ever-increasing costs of advertising.
- Helps you get the right kind of customer. It’s not just about immediate conversions. Optimization can help you find people who will love your product and help your marketing efforts by telling everyone they know how great you are.
- Is essentially free. CRO capitalizes on traffic you already have. This means instead of spending more money on getting new visitors, you are doing a better job of converting those you already have. As a result, optimization improves your return on current investments.
- Lowers your customer acquisition costs. For example, if you manage to double your conversion rates, you have essentially reduced your cost-per-acquisition by half.
- Increases your profits. Continuing with the example above, halving your customer acquisition costs basically means you just increased your gross profits by the same amount. And, that profit goes straight to your bottom line.
- Gives you more money for acquisitions. More profit means you can spend more on acquiring new customers. So, another way to look at optimization is that halving your acquisition costs allow you to get twice as much business with the same amount of money spent.
- Makes you more valuable to affiliates and partners. Your conversion optimization success can be extended to your partners and affiliates, allowing them to get more business for less money, thus making you more valuable to them.
- Helps you increase your market share. The better your conversion rates, the more traffic you can afford to buy, the more customers you get, and so on. Having better conversion rates than your competitors means, you will be growing faster because you will be able to spend more money overall and you will be paying less per each new customer.
Conversion rate optimization is all about testing different elements on your landing pages, in your marketing copy, in your ad targeting, etc. However, determining what elements in your conversion process to test and optimize can be quite challenging.
Luckily, the MECLABS Conversion Sequence Heuristic offers a framework of five factors, on which to focus your optimization efforts.
It is a part of a patented, repeatable methodology developed by Flint McGlaughlin, CEO and Managing Director, MECLABS Institute, based on years of testing and research of real product and service offers presented to real customers.
So, how does optimization work?
By making changes to the right areas. While you can never guarantee that conversion will happen, by making changes to the right areas you can increase the probability of conversion happening.
Five factors that lead to higher conversions
Before you start optimizing for the elements, stop and consider the most important question, first: your objective. In other words, do not proceed without truly understanding the following:
- Who are you trying to convert?
- What are you trying to convert them to?
It can be dangerous to immediately begin working on tactics (adding, removing and changing things) before stepping back and asking yourself what the true objective you are trying to accomplish is.
Therefore, before looking into motivation, value, incentive, friction, and anxiety, first define what your ultimate success, or conversion, is.
The motivation of the user is the single most important factor affecting conversions. The motivation of the user is also the only element that you cannot change. It is intrinsic to your potential customers.
You can, however, gain an understanding of your potential customers’ motivations to better tap into those natural motivations and better serve your ideal customers while improving conversion.
This means getting an answer to questions, such as:
- Where is the customer in the thought sequence?
- Where are they coming from?
- What conclusions do they need to make before converting?
- What are their pain points?
- What do they value?
Once you’ve understood the motivations of your potential customers, you can use them to maximize the effectiveness of your marketing message through segmentation and through creating different versions of your marketing materials..
Value proposition (v)
The value proposition is all about differentiating yourself from your competition. At the core is the question, “If I am your ideal prospect, why should I buy from you rather than any of your competitors?” Answering this question forms the foundations of your value proposition.
But thinking about value propositions and what differentiates you from your competition goes deeper than that.
- Primary Value Proposition. This is the core level, represented by the core question: “Why should my ideal prospects buy from me rather than any of my competitors?”
- Prospect-Level Value Proposition. This level breaks out the primary value proposition for each key prospect, or segment, that you are targeting. The question then becomes: “Why should [PROSPECT A] buy from me rather than any of my competitors?”
- Product-Level Value Proposition. Now that you’ve identified your prospects, you want to define the value from the point of view of the product: “Why should [PROSPECT A] buy my product rather than any other product?”
- Process-Level Value Proposition. Finally, you have to define a value proposition for each conversion step associated with a specific product. For example, if you are running PPC ads, the question you need to answer is: “Why should [PROSPECT A] click my PPC ad rather than any other PPC ad?”
Additionally, there are also four elements that increase or decrease the power of your value proposition at any level mentioned above:
- Appeal. “How much do I desire this offer?”
- Exclusivity. “Where else can I get this offer?”
- Credibility. “Can I trust your claims?”
- Clarity. “What are you actually offering?”
Your “sweet spot” (or, your “only-factor”) is at the intersection of appeal and exclusivity.
You can further improve your messaging efforts by better communicating the “only-factor” — i.e. the value your company and product or service provides that customers can’t get elsewhere.
You do this by highlighting the appealing and exclusive aspects of your offer.
Incentive and Friction (i-f)
Incentive and friction are two sides of the same coin. Together, they define the prospect’s psychological resistance to a given element during the sales process.
Friction is the “aggravation factor” or the hoops the customer has to go through to complete the action. It consists of two components: length and difficulty.
Length-related friction relates to fatigue, irritation or aggravation caused by forms or processes that ask for more time or information than feels reasonable to the prospect.
Examples of design elements that can cause length-oriented friction are:
- Length of pages
- Number of fields in a form
- The layout of a form
- Number of steps in a process
Difficulty-related friction causes confusion or requires an undue amount of effort to complete. Examples of design elements that can cause difficulty-oriented friction are:
- Non-optimal eye-path
- Non-intuitive button design
- Organization of elements on a page
- Poor use/choice of technology
An incentive is a positive element which can offset friction that you cannot eliminate. The key to incentive is choosing one with a high perceived value — it doesn’t have to be expensive, but it has to be of high value to the customer.
Anxiety represents any kind of concern that ideal prospects have at a given moment. Anxiety can stop prospects in their tracks and result in them never returning (the back button makes it ultra-easy).
There are three ways to relieve or correct anxiety:
- Specificity – In order to counteract customer anxiety, you must first identify the source of the anxiety and then effectively address each concern. The source of anxiety may be issues such as quality, reliability, price, security, etc.
- Proximity – Once you’ve found a way to specifically address every source of anxiety, next you have to figure out the optimal place for these anxiety reducers in your marketing copy. The trick is to place the corrective measures where a visitor will experience them simultaneously with the source of anxiety.
- Intensity – The intensity level of corrective measure must address two things: the substance and perception of the concern. The substance requires you to address the rational foundation of an anxiety source based on a realistic view of risk. However, a customer’s perception of a particular anxiety can extend beyond what you would consider as realistic. It is an extra challenge to identify these perception-based sources of anxiety and to over-correct for each of them.
Conversion Optimization Strategy and Plan
There are two kinds of people doing conversion optimization. These are tacticians and strategists.
Tacticians focus on following “best practices.” Strategists focus on building a repeatable process that generates valuable insights into the conversion process.
Tacticians are usually very good at testing, but they rapidly hit a limit on the benefit they can achieve from tweaking individual elements, such as form fields, pop-up windows, or button color.
It’s because there are usually no hypotheses attached to these tests and, therefore, the tests don’t generate any marketing insights that lead to big marketing breakthroughs.
A strategic approach, on the other hand, focuses on more fundamental and ongoing improvements. It aims for gaining marketing insights, which can then result in big marketing wins.
Good strategists document why they are running tests and what needs they are trying to address. These hypothesis-based tests are far more important than making a button the right color because they provide a structured process of continuous learning and improvement over time.
Instead of simply taking test results at face value, strategists always look for meaning behind the numbers and are always aware that conversion rates are just a means to an end, which might be total revenue, profit or something totally different (depending on the organization’s strategic objectives).
This is why every conversion optimization strategy has to start with setting the goals and objectives. Is your goal to maximize revenue or profit? Or, it is to gain maximum market share? Perhaps, it is something entirely different (e.g. push Competitor X out of the market)?
Whatever your strategic goal is, it informs your conversion optimization strategy. It is what ultimately gets measured and to what all optimization tests get compared against.
Establish a baseline
Once you are clear on your goals and objectives, you will want to establish your starting line or baseline.
Only by establishing your current performance can you measure the changes and determine if you’re making a progress or not.
To establish your baseline, you will want to refer back to the goals you identified in the previous step and:
- Identify all the metrics you will want to measure.
- Identify your best sources of this information.
- Determine how you will collect this information, now and in the future.
- Go ahead and collect that data.
Your basic toolbox will include a combination of the following:
Analytics – software to track and report on what’s happening on your site day in and day out. You will likely need an analytics package such as Google Analytics or similar that has advanced analysis tools like audience segmentation and conversion tracking.
User Surveys – these will allow you to collect qualitative insights from your users directly in the moment, to hear their concerns in their own words.
User Testing – these tools will allow you to observe how users interact with your site, directly without interrupting them, test changes and document how they play out in real life.
Once done, you will have the baseline against which you will measure all future changes. Whenever you alter something, you will compare performance before and after. This is how you figure out if you make things better or worse.
Now it’s time to look at the conversion heuristic discussed earlier, your baseline data and hypothesis your biggest barriers to conversion, the reasons for why they are occurring and the possible solutions.
A well-structured hypothesis provides insights into whether it is proved, disproved, or results are inconclusive. It should be written as a statement that can be rejected or confirmed.
Furthermore, it should be a statement geared toward revealing insights.
A real-life example of a testable hypothesis could look like this:
“Changing the wording of the CTA to set expectations for users (from “submit” to “send demo request”) will reduce confusion for visitors coming from my email campaign about the next steps in the funnel and improve order completions.”
This hypothesis is well-formed because it answers:
- What: changing the wording on the CTA from “submit” to “send demo request.”
- Why: reducing confusion about the next steps in the funnel.
- Where: on this page, before the user enters this funnel.
- Who: visitors coming from the email campaign.
You will want to create similar hypotheses for all your tests.
Design and run tests
Armed with your hypotheses, it’s time to design and run your tests.
Start by making a list of your priorities. Look at your analytics data, your user surveys, and any user testing results.
What seem to be your biggest issues, and which ones do you need to address first? Double
and triple check your numbers and keep a written record of everything.
Here are a few points to consider when designing your tets:
- Start small. Look for something that won’t be too complicated to change and measure, but with real potential for improvement.
- Begin with simple A/B tests. Make only one change at a time, or you won’t know what caused the change.
- Get a second opinion.
- Look for benchmarks from other companies in your industry.
- Double and triple check everything before you begin testing.
- Don’t end your tests prematurely. Set a sample size and stick to it.
You will measure success and evaluate results against the baseline you established previously. The data resulting from your tests will determine what you do next:
If the test was a success, you can either cross this concern off your list and move on to the next one or continue refining and re-testing the same thing, until you’re happy with the result.
If this test was a failure, you should reexamine the data, and design a new test. You learn as much from a negative outcome as you do from a positive outcome.
Regardless of the outcome of your initial round of testing, you should think of optimization not as an end goal but as an ongoing process.
If you’re able to glean new insights from each test, you are able to create new and new hypotheses and design new and new test that result in continuous improvement.
Additionally, because the business landscape is always evolving and customers’ needs change over time, there will always be reasons to repeat tests and run new ones.
So, whenever you’ve improved a specific sticking point in your user experience, quickly pat yourself on the back for a job well done, and then go back and ask yourself what else can be improved upon.
Conversion Optimization Techniques
The number of optimization techniques or tactics that you can implement is practically infinite.
Your actions should always be informed by your conversion optimization strategy.
The following list, compiled by Backlinko, should ONLY serve as a source of ideas (not a checklist) and its only purpose should be to give you some ideas and get your creative juices going:
- Add the number of likes, users, followers or customers as social proof
- Add numbers in your headline
- Add reassurance copy
- Add urgency to your CTA
- Ask for micro-commitments
- Clearly mark your top sellers
- Directly counter objections
- Don’t show the number of people already on your email list (yes, really)
- Evoke emotion
- Feature high-revenue products above the fold
- Get new users engaged immediately, even if they don’t buy right away
- Give people more information
- Hide negative social proof
- Increase the number of your landing pages
- Leverage loss aversion
- Make your About Us page more human
About us page
Make your headlines super-specific
Persuade with image captions
Remove your coupon field
Replace blocks of text with bullet points
Replace jargon with plain English
Replace the word “Buy” with benefit-rich CTAs
Show the work that went into creating your product
Show where your product was made
Show why you’re better than the competition
Sweeten the deal with bonuses
Test different prices to maximize total revenue
Test first and second person copy in CTAs
Test free trials vs. freemium
Test free trials vs. freemium
Unbounce uses free trials and clearly communicates that in their CTA.
- Test negative words in your headline
- Test upsells, down-sells and cross-sells
- Turn a boring form into a fill in the blank
- Use a long-form sales page for pricey products
- Use action-oriented copy
- Use guarantees
- Use information gaps to create curiosity
- Use inline validation
- Use no-nonsense headlines
- Use price anchoring
- Price anchoring
- Use qualitative surveys to get breakthrough insights
- Use scarcity
- Use specific statistics and numbers
- Use the same language customers use
- Use weird call to action copy
Design optimization tactics
- Add (awesome) site search
- Add auto-complete suggestions in product search
- Add product filters
- Add trust symbols
- Allow customers to zoom in on your products
- Avoid false bottoms to keep users scrolling
- Do usability testing (with real users) to get live feedback
- Encourage customers to share their purchase on social media
- Follow traditional design conventions
- Guide users with directional cues
- Incorporate video into your sales funnel
- Keep the number of items in the cart visible
- Make calls to action look like buttons (instead of text or pictures)
- Make your load time lightning-fast
- Optimize your site for mobile
- Pimp expert social proof
- Prominently display social sharing buttons in blog posts
- Prominently display your phone number
- Put key information on the left side of the page
- Reduce distractions
- Reduce the number of fields and options a user has to sift through
- Remove graphics or images near or touching your CTA
- Remove trust symbols
- Remove visual deadweight
- Replace drop-down menus with other options
- Run surveys to figure out what your customers really want
- Ruthlessly remove useless links
- Show multiple high-quality product images
- Show off user reviews
- Show your product in context
- Test button size
- Test different colors for call-to-action buttons
- Update your outdated design
- Use a large font for your headline
- Use a notification bar at the top of your pages
- Use a popup to capture more emails
- Use a single column layout
- Use a slider at the bottom of your pages
- Use a smaller button
- Use BIG product images
- Use competitive intelligence
- Use hand-drawn visual cues
- Use heat map tools
- Use image sliders instead of video
- Use image testimonials
- Use images that represent your USP
- Use photos of real people
- Use real faces instead of icons or stock photos
- Use short landing pages for small commitments
Call-to-action optimization tactics
- Add a benefit to CTA
- Add countdown timers to time-sensitive offers
- Explicitly tell users to scroll
- Generate email subscribers from your About Us page
- Place your CTA above and below the fold
- Put a CTA in the top right corner of your page
- Put your button in a more prominent place
- Repeat key benefits during checkout
- Show a bigger phone number on mobile sites
- Use a 1-step opt-in
- Use a 2-step opt-in
- Use a contrasting color for your CTA
- Use anchor text navigation links
- Use multiple CTAs on a single page
- End your prices in “7” and “9”
- Remove hidden fees
- Show your price on landing pages
- Add live chat support
- Autofill fields at checkout
- Collect emails and nurture (instead of trying to sell immediately)
- Give people a product tour
- Keep your message and design consistent through your entire funnel
- Let buyers checkout as a guest
- Offer free shipping
- Segment by different user types
- Show progress
- Test different payment options
- Test the number of pages in your checkout process
- Test the weakest links of your funnel first
- Use a Social Squeeze Page to capture emails
- Use A/B testing
- Use The Content Upgrade to capture more emails from blog posts
Conversion Optimization Tools
There is a huge number of tools for every conversion optimization task. Many are very similar. Others specialize in very narrow types of tasks. As impressive as it would look, listing all the tools here wouldn’t make sense. You still wouldn’t know which ones to choose.
Instead, we'll give you a couple of recommendations for each tool category. They are the tools we consider sufficient for most conversion optimization tasks. (Of course, if you have special needs or run a large conversion rate optimization team, you will likely have an entire suite of other tools at your disposal.)
Because it’s free and because it is so powerful, Google Analytics should be one of the default tools in your arsenal. It allows you to measure almost everything. Therefore, it makes sense to invest in learning it. The best approach to using Google Analytics (or any kind of analytics software, for that matter) is by first defining what you want to measure and the type of information you need to collect in order to be able to make sound decisions.
For example, you will want to create a list of all desired actions a user could take on your site, such as:
click on ‘add to cart’ button,
change the sort order from ‘featured’ to ‘best-selling’,
interact with widget X,
narrow down product selection via price filters,
use site search,
use comparison tool,
join an email list,
But, you will also want to create a list of all the negative actions that a user could take:
enter incorrect login,
see error messages when filling out billing info,
error 404 – page not found,
remove the product from the cart,
Google Analytics allows you to measure all of these by setting up Goals or using event tracking.
The main premise behind Kissmetrics is to understand what people are doing on your website and deliver behavior-based engagement every step of the way. While Google Analytics tracks pageviews, Kissmetrics tracks individual users and focuses on measuring their behavior. Therefore, it’s a good tool to use next to Google Analytics (although, the latter offers some basic user-tracking features, too).
Furthermore, if you’re using a larger number of tools, Kissmetrics allows you to easily build reports by importing data from those third-party tools. The reports also display A/B test data and offer a cool comparison of the variations and clearly shows the winners.
Probably the most well-known tool in this category, SurveyMonkey is an online survey tool, which helps create surveys, collect customer feedback and perform market research.
The free version gives you:
15 question types
Light theme customization and templates
The system is well designed and easy to use. You can also embed surveys on your pages.
However, you will need the paid version in order to export your data, run more questions or query more people or use their other features.
Qualaroo offers unobtrusive inline surveys that allow you to ask questions on specific pages or at specific points in your funnel.