The Beginner’s Guide to Conversion Rate Optimization (CRO)
When it comes to digital marketing, the goal is to generate traffic and leads that can then be converted into sales. While the focus is usually on developing ways to drive more traffic to your site, you may be wondering if there’s more you can do to encourage conversions.
Enter Conversion Rate Optimization!
Rather than focusing on traffic generation, CRO looks at what can be done on your website after you’ve reeled in those leads. Ultimately, CRO is an ongoing process of observation, analysis, and improvement.
In this how-to guide, we’ll give you a comprehensive overview of CRO and answer some important questions you might have:
- What is CRO?
- How should I calculate my website’s conversion rate?
- Is CRO the right strategy for my website?
- What is a CRO framework? How do I use one?
- Where should I implement CRO best practices?
- Which CRO tools and resources can I use?
Long story short, we’re going to get you set up with everything you need to know about increasing conversions. Let’s get started!
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What Conversion Rate Optimization Is (And How it Differs from Traditional Marketing)
When we talk about conversions, we’re referring to the process of getting a lead to take a desired action. This might be submitting an email address, purchasing a product, or downloading an article.
It’s easy to rely heavily on strategies that might be too simple in scope. For example, you might be solely focused on getting visitors to submit their email addresses on your website and miss out on other potential conversion opportunities.
However, if CRO is implemented correctly, it can help you manage the entire process from start to finish. This includes all of your channels and every part of your conversion funnel, rather than just that one lead generation tactic.
Regardless of where they originate from, conversions of any kind can be calculated with a formula. Since CRO is a continuous process that aims to increase conversions and can employ several different techniques, it’s important to understand how to calculate different kinds of conversion rates. So, put on your glasses, because we’re about to get real nerdy.
How to Calculate Conversion Rates
Calculating your current conversion rates will give you a benchmark prior to implementing CRO and can later help you determine whether or not your efforts are working. There are several different ways to approach this task.
Before you get started with the number-crunching, you’ll need to define a few things that are specific to your business, including:
- Website Visitors. If you haven’t already, you’ll need to track your website’s traffic. This will be the basis for many CRO calculations.
- Leads. Make sure you know exactly what counts as a lead for your situation. For example, this could be anyone who clicks on a specific button or submits their email address.
- Conversion. Making a purchase is the most common kind of conversion we’ll discuss. However, there are several kinds of conversions, so you’ll need to establish how you’re defining the term.
These three elements are critical components of your marketing funnel. The better you understand your funnel, the easier it will be to implement key CRO tactics.
Now, let’s look at the most fundamental way to calculate conversion rates. You’ll take the total number of conversions (such as purchases), and divide it by the number of “interactions” or completed actions (clicks on an ad, for example) during a specific time frame.
For example, if you had 10 sales from 1,000 interactions in one month, your conversion rate for that month would be 1%. However, you’ll have to decide what you are considering a valuable interaction, as calculating all potential actions together can result in skewed rates.
Fortunately, there are tools available to help you sift through some of the different ways to do this. Specifically, Google offers conversion tracking for use with Google Ads. This enables you to create specific conversion actions that are unique to your business.
Now, let’s take a step back and look at conversion rates in the context of implementing CRO. To do this, you’ll want to calculate your conversion rate based on the number of website visitors you have and how many of them become leads.
To get your visitor-to-lead conversion rate, divide the number of leads created by the number of website visitors within a set time frame:
If you have 1,000 site visitors in one month and 10 leads, your visitor-to-lead conversion rate is 1%.
In terms of setting goals, you might be inclined to think you need more website traffic. In reality, this is where CRO can be beneficial. In our example, there are a lot of website visitors who did not become leads. This means there might be areas you can optimize in order to increase your visitor-to-lead conversions. In turn, your lead-to-customer conversions should also increase.
In fact, that lead-to-customer conversion rate is the last calculation we’ll touch on. This is determined by dividing your total conversions (where a lead becomes a paying customer) by the number of total leads in a given time frame:
If we revisit our previous example, we had a total of 10 leads. Let’s assume that three of those leads convert in the same month. Our lead-to-customer conversion would be 3%.
These are all necessary formulas to keep in mind. They can help you set goals and compare monthly totals to see if your CRO strategies are working to boost the specific conversion rates you decide to target.
Should You Be Using CRO? (4 Key Questions to Ask Yourself)
It seems obvious to say, “Yes! I want more leads from my existing traffic.” However, there are some other questions to consider before you dive into a CRO planning session. While CRO concepts and techniques can benefit just about anyone, there are some specific elements of your existing practices to consider beforehand.
1. Do You Understand Your Audience?
To implement a solid CRO plan, you’ll need to have a decent amount of target market data. Marketing personas are a great place to start, and you can enhance their usefulness through CRO.
If you’re lacking this kind of information but still want to use CRO, there are tools available to get you started. For example, the ThinkWithGoogle suite includes an application called Market Finder.
This is an application that can help you determine what the actual market is for your business. Additionally, you can identify new potential markets, or fine-tune your approach according to geographic locations. All of this data is vital to utilizing CRO. If you’re missing this component, you might want to invest some time into filling the gaps first.
2. Are You Tracking Key Metrics?
We mentioned previously how important it is to track different business metrics. CRO can only deliver the desired results if you’re already tracking metrics like bounce rate, page loading times, user experience, page views, and traffic. Just as we saw in the conversion rate calculations, data is the key to understanding whether optimizations are working.
3. Do You Already Have Good Traffic Numbers?
While mathematical logic tells us that the more traffic you have, the better your conversion numbers should be, that’s not necessarily the approach CRO emphasizes. The optimizations suggested — along with using CRO best practices — are designed to take your existing traffic even further.
So if you’re already happy with your current traffic, that’s a good starting point. If not, you might first want to look at what could be preventing you from reaching your audience.
4. Do You Need to Stretch Your Marketing Budget?
Just like we discussed regarding traffic numbers, CRO aims to get you more with what you have already. If you have the other elements in place, such as data tracking, decent website traffic, and lead funnels, CRO is a logical next step.
However, obtaining those other items can be costly, so it makes sense to look at where you can optimize what you have in place to bring about better results. Fortunately, most CRO practices are not going to break the bank.
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Understanding the CRO Process and How to Make It Work For You
We mentioned earlier that some approaches to calculating conversion rates can be too isolated. However, when implemented correctly, CRO can take those individual elements and create a comprehensive process that offers greater depth and value.
In that regard, CRO is also a multifaceted approach that does not focus on just one element of a website or marketing campaign. There are several different CRO frameworks out there that you can adopt for your process. Each framework puts its own spin on five basic categories, including:
On their own, these can be used as a basic CRO framework, but there are more in-depth and specific frameworks out there that you can try as well. We’ll go over three of the most popular, to give you an idea for how they differ.
Moz’ 5-Step Framework
Moz offers SEO tools for website developers and businesses, and they’re considered one of the top experts on SEO. Therefore, it’s no surprise that they’ve developed a CRO framework as well. Their approach has five steps that fall into three broad phases: Discovery, Experiments, and Review.
To get started, let’s look at the Discovery phase. This is where steps one and two of the Moz framework live. There, you’ll look first at gathering data and formulating your hypotheses.
The Discovery phase is essential to creating a strong foundation for all the work you’ll do next in the Experiment phase. This is where you’ll encounter steps three and four. They cover wireframing your new design, so you’re addressing the hypotheses formed in the previous step. This should match your brand and be realistic in terms of your technical resources.
The fourth step in this framework focuses specifically on implementing Optimizely. This is a platform we’ll discuss in greater detail later. However, broadly speaking, it’s built to help you test and build digital experiences in a variety of different categories, such as marketing, engineering, and product development.
In the Review phase, you’ll be looking to see if your hypothesis was correct. If not, you’ll be able to determine what you can learn from that failure.
The LIFT Model
Developed by Chris Goward, Founder and CEO of WiderFunnel, the LIFT Model is another CRO framework to consider. While this approach retains some of the same fundamentals of scientific testing that the Moz framework introduced, it has a much different structure.
The Lift Model enables you to evaluate experiences from the perspective of your page visitors, using these six factors:
- Value Proposition
Goward offers a visualization of this model using an airplane as the value proposition. What makes the airplane lift is when the value proposition is relevant, clear, and presented with urgency. As a website user, distractions and anxiety are what can bring the plane down.
With the LIFT Model, your value proposition is what determines your potential conversion rate, making it the most vital part of the framework. All the other factors in the model either drive or inhibit your value proposition and are used to develop your hypothesis and testing strategy.
The LIFT Model has quite a few success stories. For example, a case study on Magento demonstrates how they were able to create an 88% “lift” in qualified leads using this framework.
The Data36 Model
Created by data analyst Tomi Mester, the Data36 model is an excellent option for anyone more comfortable with traditional scientific research terminology. This framework uses six steps to work through both qualitative and quantitative research methods that inform the CRO process.
Steps one and two of the Data36 approach are similar to the Moz framework — you’ll be focused on gathering valuable data. However, in this case, it might be anecdotal or historical data.
The key is to focus on qualitative information at the start. According to Mester, this concept is the first step, so you can form “hunches” before diving into the numerical data. To gather this information, you can conduct user interviews or Five Second Tests, which we’ll talk more about later.
Your qualitative data can help dictate the direction of your search for quantitative data. This is where you’ll start to confirm your hunches. For the most part, this is similar to the steps in other frameworks where you form a hypothesis and then test it.
The Data36 framework also has a brainstorming step that is much like wireframing in other CRO frameworks. Once you’ve created optimized content, you’ll engage in another round of qualitative testing.
To round out the framework, you’ll work through A/B testing of the versions that performed well in the second round of qualitative research. The winner of this step can be moved to the sixth and final step. If used correctly, this framework can help you avoid unnecessary coding projects and potentially speed up the optimization process by weeding out options that might not work.
6 Areas Where You Can Implement CRO Best Practices
Now that we’ve covered some of the frameworks you can use to implement a CRO strategy, let’s take a look at the specific areas of your website where these techniques can have a noticeable impact.
1. Call-To-Actions (CTAs)
Your CTAs are of prime importance. If your website visitors don’t know what it is you want them to do, it’s unlikely that they’ll do it. Remember that in the LIFT Model, clarity is one of the elements that can help your value proposition take off.
You might be familiar with some of the more traditional best practices, such as CTA button design, placement, and copy. However, when it comes to CRO, the approach is slightly different. In fact, this is where you’re more likely to find recommendations for using text-based CTAs.
A text-based or anchor text CTA is designed in a larger format, such as an H3 or H4 heading, and is often styled in a different color. It is meant to stand out, but still be part of your web page’s copy. Hubspot conducted a study that compared end-of-page CTA banners to CTA anchor text and found that 43 to 97% of their leads came from the anchor text.
Since only 6% of leads came from the end-of-page banner, anchor text CTAs were the clear winner.
One of the main reasons this approach works is that it can help avoid banner-blindness. This happens when website users simply ignore certain design elements. Additionally, since a high percentage of readers won’t ever make it to the end of a post, implementing anchor text CTAs might be a useful technique to explore on your website.
2. Website Copy
Many experts view writing strong website copy as a mashup of art and science. However, CRO has a more formulaic approach for improving conversion rates through optimizing specific areas of your website’s copy.
For example, applying optimization formulas to your headline is a great place to start. This is likely the first, and potentially only, thing your visitors will see. If the headline is not optimized, they may not even click on it in the first place!
If your headline passes the test, you’ll want to make sure your page copy follows a few more rules. This is where the relevance of your copy really matters. It’s crucial to CRO that your copy matches or is relevant to your CTA.
For instance, you wouldn’t want to focus all your copy on website hosting and then have your CTA mention signing up for an email marketing service.
That might be an extreme example, but it drives home a vital point: copy matters!
You’ll also want to assess whether your copy uses too much passive voice, stays on topic, and makes claims you can actually deliver on.
3. Navigation and Site Structure
Your website’s structure can be a critical factor in a successful approach to traditional SEO. Plus, there are lots of ways to optimize it. A well-executed site structure also plays a pivotal role in CRO.
In fact, SEO expert Neil Patel calls good site architecture the “older brother” of CRO.
Basically, navigation and site structure impact conversions because they are how users find and purchase things on your website. If the path to your CTA does not make sense or is hard to follow, your conversion numbers will probably reflect that.
This is where some standard practices for building better User Experiences (UX) can be helpful. Peter Morville’s Honeycomb Model is a widely-accepted lens through which to view your website’s structure and begin making improvements.
The seven segments of the honeycomb represent all the elements that should be present to provide users with a meaningful and valuable experience. Ultimately, if your website structure and navigation are meeting all the standards in the honeycomb, you’ll have naturally optimized your website for better conversion rates.
4. Page Speed
It’s a well-cited fact that if a user has to wait just a few seconds for your page to load, they are more likely to leave and not come back. This, of course, can have a negative impact on your bottom line.
Fortunately, there are ways to improve your website’s speed.
One significant factor when it comes to page speed is your web host. A quality web host with the right features can be a big help when it comes to CRO.
For example, built-in caching is one feature to look for when evaluating potential web hosts. This enables you to create static versions of individual web pages, so the server has less to load when a user requests the page through their web browser.
Getting your visitors to fill out lead generation forms can be a challenge. Style and length are both factors that can impact the success of your forms. Additionally, where to place them on your site is a hotly-debated topic.
Whether you place your opt-in forms above or below “the fold,” there are some practices backed by data that seem to yield higher conversion rates. For example, the BrokerNotes lead generation form has a tool-like experience that took their conversion rate from 11% to 46%.
This is a good example of how revamping your lead generation form to look and feel less like a form can assist with CRO.
However, there are many other form elements to consider when optimizing for conversions. This includes how much and how personal the information is that you ask for. For example, asking for a phone number has been shown to cause a 5% drop in conversions.
6. Landing Page Design
While many of the items on our list often live together on a landing page, there are steps you can take using CRO to improve the overall experience.
Not only is the page simple and visually appealing, but it also gets right to the point with a clear headline and useful information. There is no question about what this page is saying, and it speaks right to a potential host’s wallet.
In terms of a CTA, it also cleverly offers the user valuable information before asking for anything in return.
6 Conversion Rate Optimization Tools & Resources
Once you have a basic grasp on what CRO involves, it’s time to dive in and put it to the test. Fortunately, there are many resources available to help you get started. For example, we’ve created a guide to using typography to increase conversions on your website.
Let’s take a look at six other resources you can leverage to launch your CRO initiative!
1. Google Marketing Platform
When it comes to optimizing for search engines, Google is usually a top priority. Fortunately, the search engine also offers an entire suite of tools that can be used with your CRO framework. This is particularly beneficial for small businesses, as they can access these tools for free.
Another benefit of using Google’s resources is that they are designed to work together, making your data accessible across all the available applications. The Google Marketing Platform provides an integrated approach to using the best tools for optimizing your website.
For instance, you can gather all the tracking data you need for the beginning steps of most CRO frameworks using Google Analytics. Once you’re ready to run some tests, Google Optimize offers applications that can set up experiments based on your data.
2. Visual Web Optimizer
Visual Web Optimizer (VWO) is an application with a diverse feature set, geared towards making website optimization easy. The Research, Hypothesize, Experiment, and Measure approach to many of the CRO frameworks we’ve discussed is operationalized with VWO’s digital toolset.
Essentially, you can use VWO’s services to provide extra support and expertise to the CRO framework you decide to employ. This includes tools for every step of the process. VWO also offers many plans to choose from, including pricing options for individual applications starting at $99 per month.
Optimizely is the platform used explicitly in the Moz 5-Step CRO Framework. It is one of the top CRO platforms out there, with clientele that includes 24 of the top Fortune 100 global businesses.
This is one of the premium CRO services on the market. You’ll have to contact the sales team directly to get pricing on Optimizely plans.
Whatever you choose, you’ll get some options in terms of how you can approach the platform. For example, you can choose services based on team (marketing, product, engineering, or data) or industry.
You can also choose between a Web platform for creating experiments and personalizations with a visual editor and a Full Stack platform geared more towards application and back-end development. This is where you’ll find high-powered A/B testing options and feature flags for product development.
4. Five Second Tests
Five Second Tests is an easy-to-use web-based service that enables you to gather data on what a website user’s first impression of your design is. This process gives testers only five seconds to view a page. Then, they are asked a series of questions to determine if the design is achieving what you intended.
You can use this application for free in a limited capacity. You’ll be constrained to a total of two minutes of testing per month and you won’t be able to brand your tests with your own logo. For $79 per month, you can increase your testing time, remove the branding, and implement split testing. There are also Pro and Team plans with many more features for $99 and $396 per month, respectively.
5. Case Studies
Research and data are both essential components when it comes to CRO. So we wanted to include some excellent resources for your own information gathering. Learning from others can save you time, frustration, and in some cases, money.
With that in mind, Neil Patel has 100 conversion rate optimization case studies available for free on his website. You can use this as a directory to find situations that are similar to your own to learn from.
You’ll be able to review what was optimized, in addition to what the results and key findings were. If you’re trying to kickstart a CRO effort with your team, sharing case studies can often serve as a tangible motivator.
6. CRO Blogs
To learn more about CRO and keep your skills sharp with the latest optimization tools, following the blogs of CRO experts can be a worthwhile (and often entertaining) strategy. However, if you look for CRO blogs in a Google search, you’re likely to get millions of results. So we’ve picked a few of the best to give you a more manageable reading list.
To keep up on the latest CRO trends, you might want to follow some of these blogs:
- The WiderFunnel Blog: CEO Chris Goward created the LIFT Model for CRO.
- Unbounce: This is a blog brought to you by one of the leaders in A/B testing and landing page optimization tools.
- Conversion Optimization Blog: A well-researched blog that comes from the Conversion Sciences team.
- Neil Patel’s Blog: Neil Patel, the creator of KISSMetrics, brings his readers some of the most data-packed posts out there about marketing and optimization.
As our technology landscape shifts and changes, following expert blogs can help you stay informed and up-to-speed on the most effective CRO practices.
Let’s Increase Your Conversion Rate
With some basic elements in place, a well-structured CRO strategy will almost always yield positive results. If you’ve already calculated your conversion rates and are tracking key metrics, then you’re off to a good start.
Choosing and implementing a CRO framework is another major component of developing a successful strategy. While no one framework is the “right” one, they all require gathering quality data, developing hypotheses, and testing to determine the best optimization tactics for your website.
Of course, you won’t want to get distracted by an unreliable web host when you could be focusing on a higher conversion rate. Here at DreamHost, we can keep your website’s server in prime condition with our managed hosting plans, so you can get back to building a conversion machine!