What is CRO? How to boost conversions and supercharge revenue with a CRO Program.
The rise of CRO Marketing
As the world adapts to a more digitally enabled lifestyle, online goods and services have seen a substantial increase in demand. This huge surge in online transactions has created unprecedented times for businesses, and for many a financial boon. Prior to the pandemic, retail commerce was increasing approximately 10% year over year. In 2020 and 2021, we saw 2x the growth, and It’s predicted by 2023 that retail commerce will hit 1 trillion dollars. The SAAS industry has also exploded 5x since 2016, and Apple is poised to become the first $3 trillion-dollar company. Oh, what a time to be alive!
From 1 click checkouts to AR demos and curbside pickup, brands have made it a focus to provide faster, smarter, and more efficient online user experiences for their customers. Jeff Bezos, Amazon's mastermind, is famously known for being obsessed with the customer experience. Bezos once said, “if you double the number of experiments you do per year, you’re going to double your inventiveness.” This is the core concept behind Conversion Rate Optimization (CRO). A feedback loop of experiments through the lens of your real site visitors leads to greater conversion of prospects to customers. The conversion rate is the most important KPI to measure, as it’s directly tied to “the bottom line”. Due to the explosive growth, CRO has become one of the most popular skill sets currently in demand.
What is CRO?
A conversion is a transaction between the customer and business, which can come in the form of online purchase of a product or service. There are also micro-conversions that eventually ladder up to a full conversion, such as newsletter subscription, clicking a button, adding an item to a cart, or submitting a form. We as marketers obsess over trying to move the conversion needle by any means possible; as greater conversion means a happier* client.
*Some clients are just never happy, but at least be sure they’ll be richer.
SEO (search engine optimization), email, and paid digital marketing take on the heavy lifting of driving qualified traffic to your website. CRO picks up the “baton” from these traffic drivers and goes to work by converting traffic into revenue. This means having a great understanding of who your customers are, and how they behave and interact with your website.
At a 1000 foot view, a CRO program establishes specific measurable time-based goals to improve website ROI through multivariate testing. If you’ve ever watched Netflix and noticed the movie posters changing regularly, these are tests and improvements to increase clicks and views. Every user interaction on a website must be thoroughly dissected in order to have a deeper understanding of how users are behaving on your website. The 3 key aspects of user behavior to specifically identify are the drivers, hooks, and barriers to conversion.
By analyzing data from web analytics, heatmaps, scroll depths, surveys, and user recordings we can begin to unravel these findings. It’s important to understand real customer feedback, where users are engaging, scrolling, and exiting the site. Video recordings put you in the shoes of the user. Something almost unimaginable just a little over 10 years ago. These insights help develop a website conversion strategy consisting of a series of test sprints. Each sprint works towards a goal of outperforming against the control over the course of days to a month. Oh, it helps if there’s a lot of traffic too. The more data the better.
CRO Programs and Costs
Many digital marketing agencies offer a CRO program, but process and outcome may vary. This really depends on the resources available, agency process, software needs, amount of traffic, and size of the website. Agencies may charge anywhere between $5,000 to $30,000 a month for a CRO program. Some agencies offer performance-based models that are free until there is a guarantee of performance. This is a high-risk, high reward situation for a CRO agency, but lucrative with good performance gains on larger high-transactional websites. Doubling the conversion rate of a website that does $50M-$100M a year can, well… add up rather quickly for an agency bonus. There are also pilot programs tested at a smaller scale in order to gain organizational confidence in a fully operational CRO Program. Software costs can be in the thousands based on the number of tests and traffic. A robust CRO program will have many roles including data analysis, wireframing, copywriting, web development, project management, and testing. Growth doesn’t come cheap, but the value speaks for itself when it can deliver millions of dollars in additional revenue on a monthly basis.
Online tools Like Google Optimize and Optimizely can be used to run experiments on your website, so segmented audiences see different experiences, buttons, images, and text. They’re not cheap to use at the enterprise level, but the ROI still far outweighs the expenses. Winners get implemented against 100% of the audiences, and failures ultimately become learnings. Goals, UTM Codes, and Google Tags can be implemented in Google Analytics to simplify reporting and measurement. We also like Google Data Studio to give a deeper performance report to our clients. The sprints are mapped out over the course of 3-6 months. Using a PIE framework (Potential, Importance, Ease) tests are prioritized on the potential impact on a page, the value of that page, and how difficult it is to implement this change to a page. There are several other methodologies like PXL by ConversionXL, ICE (Impact, Confidence, Ease), and TIR (Time, Impact, Resources), but we’ve found PIE to be the most effective and efficient to implement for our CRO Agency.
Websites muste evolve as trends, technologies, behaviors, and mobile devices change so often. With all things in life, there eventually will be a cycle of growth, peak performance, and ultimately a decline. This is the rate of decay in digital. A website made in 2012 would not even compare to a competing one made in 2022. Mobile experiences were still in their infancy, Adobe hadn’t even killed Flash yet, and Blockbuster was still trying to compete against Netflix. Even 2019 almost feels like an entirely different technological era. Electric Vehicles were just Teslas, and working in offices was still a thing. Great CRO adapts to the ever-changing needs of the customer in an effort to not only mitigate decay but continually operate at peak levels. It’s a constant challenge to the status quo of best practices because what may have worked for one or more companies, may not work for another. In fact, CRO is the death knell to best practices, because it’s constantly looking forward and not backward. Innovation in the form of bite-size improvements month over month. Admittingly, CRO is not for everyone. It is a costly commitment that may not even be registered as an official line item in the budget for many businesses.
In the years to come, CRO will become an increasingly competitive service to offer in the digital marketing world. It is a very niche offering that can yield high returns for brands. At Electric Enjin, we’ve worked on a countless number of ecommerce and b2b websites throughout our near-decade in business. Our single biggest passion has always been around the art of conversion; understanding what makes a user take action to buy and promote a brand’s story.