What is Conversion Rate Optimization (CRO)?

Website owners who invest substantial resources into search engine optimization – both in terms of time and money – typically don’t have to wait too long to see the fruits of their labor: as their site inches further up the search engine result page (SERP) they also begin to notice an increased number of visitors. But what should be done when, despite all these efforts, turnover simply fails to materialize? Racking up large visitor counts doesn’t necessarily mean that orders, downloads, or requests will rise as well. Only when visitors also become active and register for the newsletter on offer, put items in the shopping cart, or fill out a contact form, does the web project bring in the desired profits or leads. These are known as conversions, whose optimization and analysis ranks among the most important tasks for many online marketers.

The main objective is to measure the relationship between traffic and conversions – expressed as a value in the conversion rate – long term using web analysis tools such as Google Analytics and to continuously improve it by carrying out targeted improvements on usability, content, layout, and so on. What exactly are the different steps and methods of conversion rate optimization?

Definition: Conversion rate optimization (CRO)

Conversion rate optimization (CRO) is one of the most important sub-disciplines of online marketing. It is primarily concerned with observing, analyzing, and improving the conversion rate, which serves as one of many KPIs (Key Performance Indicators) for measuring the success of web projects - especially in e-commerce. The aim of conversion rate optimization is to increase sales by adapting a wide variety of components such as usability, layout, or content.

This is why conversion rate optimization is so important for online success

Advertising on the world wide web is a lucrative and valued source of income, but for many website operators it is only a secondary source of income. Today, a large number of websites are linked to business interests, which put the sale of products and services or subscriptions first. Even getting users to sign up for newsletters is often more important than selling advertising space.

Note

The conversion rate is given as a percentage and is calculated as follows:

Conversion rate (%) = number of conversions x 100 / number of website visitors

Regardless of which conversion target you are pursuing with the respective project, it is of course important to know how many users you reach on average. An online store with 100,000 visitors per month naturally promises greater sales success than a web store that is visited by only 10,000 potential customers in the same period. However, if the latter store manages to motivate users to make a purchase, the supposed advantage of the traffic-intensive online business (which is inevitably linked to a higher resource requirement) doesn’t exist. The same applies to elaborately conceived newsletter campaigns, high-quality whitepapers and the like – the desired success can only be achieved with a healthy conversion rate.

The potential of conversion rate optimization becomes clear when you have a concrete example in front of you. For example, the basic data for an exemplary online store before and after optimizing the rate by 1% looks like this:

In this example, optimizing the conversion rate by just one percent leads to a profit increase of $20,000 per month or $240,000 per year.
  Before conversion rate optimization After conversion rate optimization
Unique visitors per month 100,000 100
Conversion rate 2% 3%
Orders 2,000 3,000
Shopping cart value per order $ 100 $ 100
Sales $ 200,000 $ 300,000
Margin 20% 20%
Profit $ 40,000 $ 60,000

The basic foundations of conversion rate optimization

Since web projects differ greatly in their structure and appearance, it is not possible to formulate a universally valid solution for conversion rate optimization. While one website may require optimization when it comes to the navigation, another may lack concrete instructions (call-to-actions) that convert users into buyers, subscribers, and so on. With a third web presence, the first components are solved, but the buttons for the conversion target are not well placed. It is therefore important to decide individually which parts of the web project need to be optimized in order to actually improve the conversion rate. If this is not the case, the worst-case scenario is that well-functioning elements are reworked and more problems therefore occur.

In order to achieve satisfactory results for your own project, it makes sense to base the conversion rate optimization process on the following five basic components:

1. Analysis of the status quo

  • What is the business objective of conversion rate optimization?
  • Which website elements are relevant for the desired conversion(s)?
  • What are the visitors’ expectations and motives?
  • What is the users’ bounce rate and when do they leave the site?

2. Hypothesis and planning of conversion rate optimization

  • Where are there weaknesses in the conversion process?
  • What effects do the weaknesses have on visitor purchasing motivation?
  • How can user interaction be improved?
  • Design a plan for conversion rate optimization

3. Designing and creating alternatives

  • Implementation of alternative pages, interactive elements, designs, or contents
  • Simple adaptations and complete redesigns are possible
  • Live version remains unchanged in the meantime (optimizations have to be implemented separately).

4. Testing the optimized components

  • In which period of time should the test be carried out? (the longer, the more accurate the data is)
  • Implementation of the desired test components according to different procedures such as A/B testing or multivariate testing
  • Observing the ongoing tests using specific software or analysis tools such as Google Analytics or Matomo
  • Interpreting the test data and selecting the most promising variant(s) for conversion rate optimization 

5. Rolling out

  • Transferring optimized components to the live version.
  • Observing the performance of new variants in order to return to the original version if necessary (in case of technical problems or the conversion rate decreases)
  • Documenting the acquired knowledge  
  • Using the acquired data via the functionality of your own web project for future conversion rate optimization.

Which conversion rate optimization methods are available?

Depending on the type of web project, there are different aspects that help conversion success or hinder it. Functional properties can also have an influence on user actions as well as content: visual or structural. We have compiled the most important methods for optimizing the conversion rate, which can be used either on their own or in a network to achieve the desired progress.

Shopping cart optimization

Shopping cart optimization is used exclusively in e-commerce. The aim is for a purchase to be completed, but the decisive factor is when a user moves an item to the shopping cart. If only a few users make use of the shopping cart option, this is just as much a reason for optimization as a high bounce rate among users who had already selected goods to buy, but then clicked off the site. This may be due to the ordering process being too complicated, missing payment options, or a lack of trust. Possible measures include the following, for example:

  • Installing trust elements (e.g. Trusted Shops)
  • Offer additional payment options (PayPal, credit card, direct debit etc.)
  • Simplifying the ordering process e.g. by allowing visitors to order without needing to register
  • Pop-up reminders if items have been in the shopping cart for a long time and haven’t been purchased  

Usability optimization

User-friendliness, also known as usability, is not only one of the most important criteria for the search engine ranking, but is also invaluable for the conversion rate. It doesn’t matter if the web project is an online store, a news portal, or a company website. In short, usability is about how intuitively a visitor can navigate through the website and collect information. The page structure, the website hierarchy, and the interactive elements used should therefore be checked for weak areas in the conversion rate optimization.

The more harmonious the individual components of a website are coordinated with each other, the more likely it is for the desired conversions to be achieved. Core components that should be checked during the usability analysis, for example, are:

  • The navigation menu, which presents the different subject areas of the website to visitors and links them together.
  • Interactive elements such as buttons, forms etc., which the visitor must click on or fill out in the conversion process
  • The legibility of the embedded texts and text elements (emphasis, contrast, style, etc.)
  • The internal search function

Content optimization

A page’s content also has optimization potential. This starts with the content design of the snippets (meta tags): of course, it is easy to lure the user to your website with keywords such as 'free' or 'bargain' via Google results. However, this creates expectations that must be fulfilled. Otherwise, the user is quickly gone again and a conversion is further out of reach.

The quality of a website’s content is very important. High-quality content that meets the visitors’ expectations promises the greatest prospects for conversions. It makes sense to use different types of content (text, images, videos, etc.) in order to offer visitors the optimum degree of variety. A special role is also played by the previously mentioned call-to-actions, whose formulation and skillful placement are also among the most important tasks in conversion rate optimization. Examples of promising content optimization measures are:

  • Implementing personalized content linked to user behavior e.g. product or article suggestions
  • Focus on well-balanced keyword density, especially in paragraphs that are of high relevance for the desired conversion
  • Including tutorial videos to help visitors explore the website and explain, for example, the ordering process or the internal search function
  • Using design elements such as headings, bold font, or lists to loosen up the text

Layout and design optimization

A website‘s appearance is just as important as its content and user-friendliness. Layout and design have a proven influence on the behavior of users and should not be overlooked when it comes to conversion rate optimization. In this context, so-called neuromarketing, which deals with the decision-making process and purchasing decisions in the human brain, has become increasingly important in recent years. Whether it’s about distribution and placement or coloring certain elements, optical adjustments can help optimize the amount of conversions.

Overview of the possible optimization steps for layout and design:

  • Test different color samples
  • Provide several selectable designs for the web project
  • Change design depending on season i.e. Christmas time

Mobile optimization

Since a large part of today’s internet traffic originates from mobile devices, conversion rate optimization is the same as for search engine optimization: how the website is displayed on the mobile device should receive as much attention as the desktop counterpart. Mobile optimization combines all methods presented so far, from shopping cart optimization to usability, content, and layout/design optimization.

Basically, there is no need to distinguish between desktop and mobile versions, but this is often recommended. Particularly when it comes to using interactive and multimedia elements, you shouldn’t forget that mobile device users often access websites when they’re on the go and therefore have a limited bandwidth. A short, quickly-loadable website code is therefore much more important for mobile versions than desktop versions. The following measures for optimization are therefore possible:

  • Compromising imagesincluding adapting to smaller displays
  • Limiting the amount of multimedia elements
  • Outsourcing CSS and JavaScript code (compressed) into separate files
  • Developing mobile apps that display the web service precisely to the respective mobile devices
  • Using Accelarated Mobile Pages (AMP), provided that they are suitable for the web project.

Conversion rate optimization in the SEA sector

Conversion rate optimization also plays an important role in search engine advertising (SEA) because if you place an ad on Google or other search engines, you obviously want people to click on it. Optimizing these advertising banners definitely pays off since you can win visitors over to your own web project, who will then hopefully provide desired conversions later on. On the one hand, the aim is to make the ad as interesting and emotional as possible without false expectations. On the other hand, it is important to find suitable placements in the display network and choose them as desired advertising locations for your own campaign. Here are some possible steps for optimization:

  • Redesign of the used advertising texts
  • Modification of the active bidding strategy (redistribution of the available campaign budget)
  • Individual selection of advertising placements instead of the automatic distribution by the respective search engine
  • Optimize SEA ads especially for the main conversion(s), such as high-selling products
Note

The conversion rate optimization should be seen as a continuous improvement process that ends only when the project is no longer online. On the one hand, individual optimizations lose their effect over time, on the other hand there are elements that can have a positive effect on the conversion rate if they are reworked. These do not necessarily have to be website components: factors such as print and TV advertising, the quality of products and services offered, image, and other marketing measures such as social media work also contribute to conversions and conversion rate optimization.


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