It’s a simple fact. You can have the most beautiful website on the internet, but if you can’t convert visitors into paying customers, you might as well close up shop.
What is your conversion rate and why is it so important?
Your website’s conversion rate is the percentage of its visitors that take action. When you improve your website’s conversion rate, you get more customers without spending a penny more on advertising.
In addition, you get to spend more on additional visitors—so a small increase in conversion rate can have a surprisingly large effect on your profits. Sophisticated marketers—such as Amazon and Expedia—invest a lot of resources in improving their website’s conversion rate.
What is conversion rate optimization?
We coined the term “CRO” (Conversion Rate Optimization) in 2007 to describe the process of optimizing online businesses. It’s really commercial optimization.
A proper job of conversion rate optimization includes a review of your entire online marketing process, from your initial lead-generation ad, all the way through to the post-sale follow-up. The real goal is to identify which parts of your sales funnel will yield the greatest improvements with the least work.
That means it’s necessary to bring a lot of disciplines to the party, including understanding traffic sources, visitor psychology, and your company’s position in the marketplace, including its core strengths and weaknesses. On top of that there’s usability testing, copywriting, and web design factors to look at.
All these elements go into creating hypotheses for testing. Here at Conversion Rate Experts we’re maniacal about testing, because we’ve seen too many businesses merely throw a series of “best practices” against the wall to see if anything sticks. Best practices should not be the answer to optimizing a website, but merely one starting point for formulating a test strategy.
Once you determine what truly works for your website, then examine how your findings might be used in other media channels. For instance a better series of benefit statements might be transferrable to direct mail or email autoresponder campaigns—subject to testing in those media, of course.
Why conversion rate optimization is fundamental to your business’ success:
Reason 1: The obvious one—you get more customers, free
The obvious reason to improve your conversion rate is because you want more customers without having to spend a penny more on advertising. But there are
other, even better, reasons…
Reason 2: The “slight edge” phenomenon
In many competitions, “the winner takes all” (or at least “the winner takes most”). This is particularly true of internet marketing.
This has an important implication: if you want to be twice as profitable as your competitors, you don’t have to be twice as good as them. You just have to be slightly better than them. This phenomenon is sometimes called the slight edge.
In particular, you need to have a higher profit-per-visitor than they do. Small increases to your profit-per-visitor can have enormous knock-on effects to your business’s profitability and success.
A word of warning: this is no reason for complacency. Once you have the slight edge over your competitors, you need to make sure you stay ahead.
Reason 3: Conversion rate optimization makes financial sense— because your profit is surprisingly sensitive to your conversion rate
An increase in conversion rate of just 50% can result in a 500% increase in your profits. That’s because the profit from the additional conversions goes straight onto your bottom line. In fact, a 10% change in conversion rate can mean the difference between making a profit and making a loss.
Reason 4: Conversion rate optimization makes your business more robust
The ultimate goal of conversion rate optimization is to allow you to spend more per ad-impression than your competitors can. This enables you to advertise in other media (online and offline), which in turn makes your company much more robust. This can create a “virtuous circle” of benefits for your company, (and a vicious circle for your competitors).
1. When you increase your conversion rate, your revenue increases.
2. That additional revenue-per-visitor enables you to do more. For example, you can reinvest those earnings into other marketing efforts, like:
• better SEO for more valuable keyword rankings
• expanding your SEM campaign to drive more traffic
• using other marketing channels like print and radio
This increases the number of visitors and generates even more revenue that you wouldn’t otherwise have been able to generate. Each increase in conversion opens up new opportunities for customer acquisition, thus creating a highly profitable loop of increased revenue.
In extremely competitive markets, conversion rate optimization is increasingly becoming a prerequisite for survival.
One last reason to invest in conversion rate optimization
Here’s a final reason why you should be taking action now to improve your conversion rate: because if your competitors aren’t doing it already, they will be soon. And there’s an enormous advantage to being in the lead rather than lagging behind. Once you’re ahead, you gain money; and if you’re always playing catch-up, you’re losing money.
With iterative testing your profits can only go up—because you only keep the winners. Want to learn more about how you can improve your website?
• Read our case studies at http://www.conversion-rate-experts.com/buzz/
• Check out our free articles at http://www.conversion-rate-experts.com/articles/
• Download our free how-to guides at http://www.conversion-rate-experts.com/free/