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“I don’t get it. With x million visitors on our site, ‘all we need to do’ is to get one percent of them to buy, and we’ll all be rich.“
As a marketing professional, how many times have you heard this? And where does this “1 percent of them” come from? Why not 10 percent? Why not 0.1 percent?
Measuring conversion rates is difficult, but improving conversion rates is even more difficult. And probably the most difficult aspect is to set expectations and report consistently on progress.
In any case, there is only one way to do conversion rate optimization right: through data-supported trial and error. Conversion rate optimization (CRO) is not guesswork and it is not black magic. It does not tolerate approximation, and more importantly it does not concern itself with vanity metrics (the ones that go in press releases).
To do CRO right, you need three things. You need techniques: an understanding of how the whole concept works. You need tools to measure conversions, run experiments, measure again and again, and analyze. And finally you need a solid understanding of your business model and technical infrastructure to identify where the triggers and bottlenecks are.
VB Insight recently released a well-rounded research report that is a goldmine for any marketing professional willing to learn about CRO, and to explore their options for CRO tooling. Supported by a survey of nearly 3,000 marketers, research about tools used on more than 3 million websites and the review of the offerings from 36 vendors in the space, this study is an excellent starting point on your CRO journey.
CRO has a “cool factor” to it
To put it simply, CRO has a direct and visible impact on business. Even a small improvement in conversion rates can provide a huge bump to the top line. Imagine for example a business with a 4-phase customer acquisition funnel. Improve conversion rates at each phase of the customer acquisition funnel by as little as 5 percent, and the overall improvement is a whopping 22 percent at the bottom of the funnel. 22 percent more business…
But at what cost? The cost of tools is low (in many cases, less than $100 per month), making return on CRO tools easily accessible. The average return on investment for respondents to the VB Insight users survey was 223.7 percent, with 5.9 percent of respondents reporting more than 1000 percent return. Now, while these numbers look great, they don’t take into account the time spent, which as will be discussed later, can be significant.
There are some pretty cool technologies in the conversion optimization space. A favorite is heat mapping. Show a slide like this to the executive team or the board and you’re bound to gain some attention.
Other cool technologies are highlighted in the report. Funnel analytics for example is a very efficient way to visualize improvement triggers, and the automation of multivariate testing makes the whole process much easier than when you had to manually create multiple versions of a page and implement a randomization algorithm.
Because many of the CRO vendors are young, agile companies, they keep innovating, and bring new concepts to the market all the time. If anything, that means that VB Insight analysts will need to keep a close eye on this space as it continuously evolves.
Finally, not only can CRO impact your business, it can impact your career. As CRO continues to gain importance within marketing departments, knowing how to successfully leverage CRO tools is becoming a highly marketable skill. Once you have read this report you can already ask for a raise! Joking aside, many marketing executives are ready to pay top dollar for CRO skills. Make sure to highlight this on your resume.
Some of the limits of CRO
Surprise surprise, not everything is rosy in CRO-land. There are a few caveats and pitfalls you need to be aware of.
The biggest challenge of CRO is the disparity and fragmentation of the tools. As stated in the report:
There are still very few solutions that offer a single tool for every aspect of CRO. Some have tried to incorporate every technique through acquisition. Others seem happy with their corner of the CRO story.
Because of this, you need many tools (often up to seven, according to VB Insight’s research) to assemble the complete solution that is right for you. And you need to get these tools to work together, which often means exporting/importing or copying/pasting information between them, or even consolidating exports into a spreadsheet. It sounds like we are back to the pre-BI days.
And that makes end-to-end reporting hard. Providing consistent, reliable and repeatable reports to executives or the board is a constant struggle. You won’t be able to get away with a cool heat map every time.
One thing yet to be discussed is the total cost of ownership of CRO tools. How much time are people spending on these tools? We have seen that the cost of the tools themselves is low, but if highly paid marketing analysts or digital program managers are spending too much time slicing and dicing numbers or scheming complex multivariate tests, are you still getting the same return on investment? Time and resources are important factors to consider when calculating whether or not your total cost of ownership is lower than the increased revenue your optimizations will bring you. This total cost of ownership will differ from organization to organization based on their needs and usage of tools, but something to keep in mind nevertheless when assessing your CRO options.
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