What On Earth Is Conversion Rate Optimisation?
What on Earth is Conversion Rate Optimisation?
And more importantly, why should you care?
Conversion rate optimisation, also known as split testing (or multivariate testing if you’re feeling ambitious) is a complex-sounding practice that has gained popularity in the digital marketing industry only recently, yet is something that all of us do nearly every day of our lives.
What is Conversion Rate Optimisation?
The Tea Example
Imagine your perfect cup of tea. Or coffee if you don’t drink tea. Or squash if you don’t drink either.
Think about the way it tastes, that perfect aroma you smell as you move it towards your lips and the incessant pleasure you get from gulping it down.
Now stop imagining.
When you compare this to the very first cup you ever made, was it just as satisfying as your most recent rendition? Of course, it wasn’t!
You didn’t just wake up one morning, decide “I’ll start drinking tea today” and make the perfect cup. You woke up one morning, decided “I’d like to try a tea today” and just made one. And when you took that first sip, you sat back in your chair and thought “this is awful”. Why? Because you put too little sugar in, didn’t let the tea bag soak and added way too much milk.
Luckily, and unfazed by your past failure, you woke up the next day, decided “I want another!” and proceeded to the kitchen. But this time, instead of repeating your routine, you modified it. You honed it. You did this day in and day out until you reached that one goal that so many of us are still struggling to achieve; you made the perfect cup of tea.
So what, you ask, does that have to do with optimisation?
Let me explain:
- You converted from state A – in need of a good cuppa – to state B – enjoying a good cuppa.
- When you started making tea, almost every cup was not tasty (10% success rate).
- Now, almost every cup is tasty (90% success rate)!
- You made a cup, didn’t like it, learned from it and made another.
- You repeated that process until you were happy!
You optimised the rate at which you converted from “in need of a good cuppa”, to “enjoying a good cuppa”.
That is conversion rate optimisation in a nutshell. Or a mug, I guess.
But why should I care?
The PPC Example
The only difference online is that you’re converting traffic, trying to get them to buy your product. You optimise by changing advert designs, landing pages, website text and anything else that your potential customers see on their journey with you.
If you are continually looking for new and innovative ways to make more money, then CRO is a no brainer. Because when it comes down to it, that’s precisely what CRO gives you.
Imagine you spend £100 a week on PPC, and you get 200 visitors at 50p a click. Your website converts at 5%, so you get ten customers a week on average. Your software sells for £200, so you earn £2000 a week from those ten customers.
If you split tested your landing page – i.e. the first page users see after they click your PPC advert – and increase its conversion rate to 7%, you’re now going to get 14 paying customers a week on average. That’s an extra £800 in revenue!
But our business can only cope with the current volume of customers we have!
So what? You’ve still got a new and improved conversion rate of 7%, so now to get ten customers a week you only need, as near as damn it, 143 visits from PPC.
At 50p a click, you can now drop your PPC spend from £100 to £71.50, saving almost 30% of your PPC budget!
So now you know!
Optimising the conversion rate of your digital marketing, whatever your end goal, will help you make the most of your investment.
It’s not easy, sure, and when it comes to things like multivariate testing you’re going to struggle to do it on your own or without spending a bit of cash (we're yet to find free software that will do the job for you) and if you want the best results, it’s better left up to the experts.