How Conversion Rate Optimization Can Lower Customer Acquisition Costs

abandoned shopping cart in an empty parking garage

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The road to improved sales lies in increased conversions — on-page activity such as clicking a button to purchase a service or downloading a white paper. 

But conversion optimization rarely sparks marketers’ interest. Although discussions of online customer behavior have increased over the years, conversion rate optimization wasn’t always a priority, especially in B2B firms. The justification being that the customer journey didn’t only occur online. 

Enter the global COVID-19 pandemic and the push to move everything possible online.

An Ideal Time to Explore Conversion Rate Optimization

A tremendous amount of customer activity shifted online during the pandemic. Because of this, marketers now have an unprecedented opportunity to explore conversion rate optimization.

Conversion rate optimization is a set of website or app element changes designed to improve conversion rate. A conversion rate is calculated as the number of visitors who undertake a conversion activity divided by the total number of visitors to a website or app users — it’s a percentage of people who take an intended action on a website or app.     

Intended is the operative word here. People are capricious online. They’ll click a different button than the one you intended. The only way to gain insights is to identify the activity that aligns with the intended actions for any given page. This means sifting through the website traffic or app user metrics that reflect aggregate activity and then optimizing small page element changes for the intended customer audience.

Related Article: Improve Conversion Rate Optimization With a CRO Checklist

Getting Started With Conversion Rate Optimization

A good exploratory first step in an optimization process is to understand the traffic sources to the page you are seeking to optimize. The question you are asking here is if the traffic sources lead to the intended customer audience. The answer to this question becomes a crucial link to customer segmentation techniques, such as cohort analysis. A cohort is essentially an identified group of people (or a set of event activity that shares a likelihood of occurrence). Highlighting the audience cohort and connecting that audience to conversions creates a path to organize page development. A cohort removes the aggregate view of site traffic or app usage, allowing you to decide which elements to explore based on which ones the cohort consistently choose.

Let’s say you know your cohort audience is interested in reviewing services or selecting curbside pickup or scheduling a delivery through an app. You can then plan a conversion rate optimization process to focus on the elements that support these known activities.

The next step is to define which website or app element will be considered a conversion. Reviewing referral traffic and page activity is a great way to discover customers actions, but you want to identify a single on-page action which leads to a single outcome that influences a business objective to measure. Examples can include a form submission tied to customer leads or a click to call in a mobile app which connects to leads from your app. The point is to select an activity that highlights “why” a customer journey occurred.

The actual optimization tasks are the element changes you make to the page. These tasks vary. Some are straightforward, such as adding a strong call to action above the fold. Optimization often takes the form of A/B testing. Optimization requires a focus on what page elements to improve, but with many elements on a page, it can be confusing to know which change will make a difference. A/B and A/B/n tests often are the best way to establish the most effective method of optimizing conversion activity.   

No matter the optimization, know that the changes to conversion metrics will be small. Conversion rates make up a low percentage of overall site traffic, even for sites with high traffic volume. Thus a small delta in a conversion rate can be a large value to creating more leads, increasing sales or a lift in other important metrics.

Related Article: You’re Drowning in Data — Now What?

An Easier Path to Sales

Conversion rate optimization ultimately leads to efficiencies in marketing budgets. Conversion rate optimization lowers acquisition costs by revealing what elements, when improved, will create the easiest path to gain visitors. This increases the efficiency of customer acquisition and lowers customer acquisition costs.

The road to improving sales will always involve website or app UX elements. Apply robust conversion rate optimization will make the road to sales much smoother.

Pierre DeBois is the founder of Zimana, a small business digital analytics consultancy. He reviews data from web analytics and social media dashboard solutions, then provides recommendations and web development action that improves marketing strategy and business profitability.

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