Conversion rate optimization (CRO) is the process of increasing the percentage of users who take action on your website, whether this includes watching a video, making a purchase, or submitting a form. By understanding how users interact with your website, you can improve and optimize the latter to better reach your goals. There are two types of conversions: macro-conversions, the business’ ultimate goal, such as having a customer make a purchase or subscribing to a service, and micro-conversions, smaller conversions that can lead to the fulfillment of the main goal, for example signing up for a newsletter.
How to Calculate Conversion Rate
The conversion rate is calculated by dividing the number of times a user completes a conversion by your website traffic. For example, if you get 100 conversions from 1000 total interactions, your conversion rate will be 10% (=100/1000). Although the average conversion rate varies across industries, with a total average of 2.35%, you want to aim to optimize your conversion rate to be 3% or higher (source: wordstream).
Why Conversion Rate is Important
Analytics-based CRO allows to make use of insights obtained from metrics such as device type, traffic source, and demographics to decide where to redirect your efforts, better understand your audience, and adapt your website to improve user experience. CRO also enables you to lower acquisition costs whilst maximizing the value obtained from current customers and improving your business’ ROI and scalability.
How to Increase Conversion Rate
Conversion rate optimization is a continuous optimization process obtained through on-going testing and improvements. To improve your conversion rate as much as possible, you can follow our guide and start seeing results within the first 8 weeks (source: HubSpot):
- Conversion Funnel: Collect data to understand it: Before deciding what needs to be improved, you should map your users’ ideal route on your website when making a conversion. Doing so can help you identify the pages which are working well and should be replicated, and the ones that need to be optimized. During this phase, you should also plan the metrics you want to improve based on your business goal and find out your conversion rate at each stage of the conversion funnel.
- Measure with setting up Analytics tools: Select the analytics tools and the metrics you want to use to evaluate your website, based on your goals, and track them.
- Optimization: Research industry benchmarks: Knowing how your CRO compares to the industry average is a great way to understand how and to what extent you can improve your website. Setting a baseline CRO and optimization goals can also be helpful to identify improvements after the 8 weeks.
- User Testing: Understand user behavior: Find tools for qualitative research to understand users’ behavior and their interactions on your website. You can do this by collecting information on user experience through surveys or website forms.
- Design Your Test – Construct hypotheses: Build strong hypotheses about potential improvements and prioritize them based on their potential, importance, and implementation ease.
- A/B Testing Choose the right test: Select the optimal statistical test to test your hypotheses. Examples of the most commonly used tests include A/B, Split or Multivariate testing. Brainstorm: you can start planning your future tests by brainstorming potential improvements and subsequent test ideas
- Analyze test results: Depending on whether statistical significance is obtained, review if the hypotheses were correct. If they weren’t, re-analyze the test data, reconstruct the hypothesis and retest it.
- Implementation – Roll out the improvements and celebrate your big and small wins!
Conversion rate optimization is ultimately about finding what drives people to your website, what they’re looking for, and why. Knowing what prevents customers from making conversions by evaluating user interactions with your website can help generate improvements. Finally, being aware of user concerns and fears, as well as what ultimately persuades them to make a conversion are excellent ways to improve user experience and satisfaction.
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