CRO

What is CRO?

CRO stands for "Conversion Rate Optimisation".

Conversion Rate Optimisation (CRO) is the process of increasing the percentage of website visitors who complete a desired action. This action can vary based on the site's specific goals and can include making a purchase, filling out a form, subscribing to a newsletter, downloading a document or any other action that's valuable to the business. In essence, CRO aims to maximise the value of the site's current visitors without needing to drive more traffic.

Why CRO matters

Conversion Rate Optimisation (CRO) is crucial to the success of any digital marketing strategy. Here are some key reasons why CRO matters:

1. Maximises Return on Investment (ROI):

   • CRO lets businesses extract more value from their current visitors. Increasing the conversion rate lifts the number of desired actions (like sales or sign-ups) without needing to increase traffic, which improves the ROI of marketing campaigns.

2. Improves site efficiency:

   • A website optimised for conversions guides visitors more effectively towards the desired action, improving the user experience and making it easier to meet business goals.

3. Reduced acquisition costs:

   • By converting more visitors into customers, CRO reduces the cost per customer acquisition. This means businesses can spend less on attracting new visitors and focus on converting the ones they already have.

4. Increases revenue and profit:

   • Lifting the conversion rate has a direct impact on revenue. A 1% improvement in conversion rate, for example, can translate into a significant increase in sales and, in turn, profit.

5. Better User Experience (UX):

   • CRO practices often involve improving website usability, which leads to a better experience for users. A site that's easier to use not only converts better but can also increase customer satisfaction and loyalty.

6. Data-driven, evidence-based decisions:

   • The CRO process is built on data analysis and continuous testing. This lets businesses make informed decisions based on real evidence about what works best for their audience.

CRO, then, doesn't just help lift conversions and revenue — it also improves site efficiency and the user experience, creating a positive overall impact on the business.

The CRO process

Conversion Rate Optimisation (CRO) follows a structured process made up of several key steps. Here's the process in detail:

1. Research and analysis

   • Data collection: use web analytics tools like Google Analytics, Hotjar or Crazy Egg to gather data on user behaviour across the site.
   • Problem identification: analyse the data to identify friction points or barriers stopping users from taking the desired action.
   • Qualitative analysis: run surveys, interviews and user feedback analysis to better understand their needs and frustrations.

2. Hypothesis formulation

   • Developing hypotheses: based on the data collected, formulate hypotheses about why users aren't converting. For example: "If we simplify the sign-up form, conversion rate will increase because users find the current form too long."
   • Prioritising hypotheses: rank hypotheses by potential impact and ease of implementation.

3. Experiment design

   • Variant creation: develop different versions of the page or element to be tested, based on the hypotheses you've formulated.
   • Metric selection: define the key metrics you'll use to measure the success of each experiment, like conversion rate, bounce rate, time on site and so on.

4. A/B testing

   • Running tests: use A/B testing tools like Optimizely, VWO or Google Optimize to show different versions of the page to different user segments.
   • Data collection: monitor and collect data on each variant's performance during the test period.

5. Results analysis

   • Performance comparison: analyse the test results to compare variant performance against the original version.
   • Hypothesis validation: determine whether the hypotheses you formulated were correct and whether the variants improved key metrics.

6. Implementation

   • Rolling out changes: permanently implement on the site the changes that proved effective in the A/B tests.
   • Ongoing monitoring: keep monitoring site performance and make adjustments as needed to maintain and improve conversion rates.

7. Iteration and continuous improvement

   • Continuous optimisation cycle: repeat the research, hypothesis, testing and analysis process continuously to keep improving conversion rate over time.

This methodical, data-driven approach lets businesses systematically improve the effectiveness of their site and increase conversion rates, leading to better commercial results.

CRO tools

Here are four of the most popular Conversion Rate Optimisation (CRO) tools:

Google Analytics

• Features: traffic analysis, user behaviour, navigation flows, conversion rates and audience segments.
• Benefits: provides a full view of site performance and helps identify areas for improvement based on detailed data.

Hotjar

• Features: heatmaps, user session recordings, on-site surveys, funnel and form analytics.
• Benefits: lets you see how users interact with the site and get direct feedback, making it easier to spot usability issues and friction points.

Optimizely

• Features: A/B testing, multivariate testing, user segmentation, experience personalisation and on-site experiments.
• Benefits: offers a robust platform for running CRO experiments and optimising the user experience based on hard data.

Crazy Egg

• Features: heatmaps, scroll maps, A/B testing, user session recordings and click analysis.
• Benefits: helps you understand user behaviour better and make informed adjustments to improve conversion.

The CRO calculation formula

Conversion Rate Optimisation (CRO) is based on accurate measurement of the conversion rate. The formula for calculating the conversion rate is simple, and is expressed as follows:

Formula breakdown:

1. Number of conversions:

   This is the total number of visitors who took the desired action on the site. Desired actions can include making a purchase, subscribing to a newsletter, downloading a document and so on.

2. Total number of visitors:

   This is the total number of people who visited the site during a specific period.

Calculation example:

If in one month the site had 50 conversions and 2,000 visitors, the conversion rate would be calculated as follows:

This means 2.5% of site visitors took the desired action during that period.

The CRO formula is fundamental for measuring the effectiveness of optimisation strategies and identifying areas where improvements can be made to lift the conversion rate.

Key metrics

CRO success indicators:
To evaluate the effectiveness of Conversion Rate Optimisation (CRO) strategies, it's crucial to track and analyse several key metrics. Here are the most important ones:

1. Conversion Rate:

   • Description: the percentage of visitors who complete a desired action.
   • Why it matters: it's the main metric indicating the success of CRO initiatives.

2. Bounce Rate:

   • Description: the percentage of visitors who leave the site after viewing only one page.
   • Why it matters: a high bounce rate can signal relevance or user experience issues.

3. Average Time on Site:

   • Description: the average time visitors spend on the site.
   • Why it matters: more time on site can suggest higher interest and engagement with the content.

4. Cart Abandonment Rate:

   • Description: the percentage of users who add products to the cart but don't complete the purchase.
   • Why it matters: identifying and reducing this rate can significantly increase sales.

5. Pages per Visit:

   • Description: the average number of pages visitors view in a single session.
   • Why it matters: it indicates how engaged users are and how much they're exploring the site.

6. Customer Retention Rate:

   • Description: the percentage of customers who return to the site after their initial visit.
   • Why it matters: an indicator of customer loyalty and satisfaction.

These key metrics provide a comprehensive view of site performance and help identify areas to improve the user experience and conversion rates. Monitoring and analysing these metrics continuously is essential to the success of any CRO strategy.

Success stories

Examples of companies that have improved their CRO:

Case 1: Ecommerce company — Improving the checkout process

Company: a well-known online clothing and accessories retailer.

Challenge: the company saw a high cart abandonment rate in the checkout process.

CRO strategy: they ran a detailed analysis of user behaviour during the checkout process using tools like Hotjar and Google Analytics. They identified that the checkout process was too long and complicated.

Implementation: they simplified the checkout form, reducing the number of required fields and letting users complete the process without needing to create an account.

Results: the cart abandonment rate dropped by 25%, and the site's conversion rate rose by 15%, resulting in a significant increase in monthly sales.

Case 2: Financial services company — Landing page optimisation

Company: an online investment platform.

Challenge: the company wanted to increase sign-ups for its webinars and financial advisory services.

CRO strategy: they used A/B testing with Optimizely to experiment with different versions of their landing pages. The variants included changes to the design, call-to-action (CTA) copy and content layout.

Implementation: they found that a landing page with a cleaner design and a clear, prominent CTA increased conversions. They also added customer testimonials and success statistics to build trust.

Results: the landing pages' conversion rate improved by 20%, which led to a 30% increase in sign-ups for webinars and advisory services.

References

To dig deeper into Conversion Rate Optimisation, here are two recommended books:

1. "Landing Page Optimization: The Definitive Guide to Testing and Tuning for Conversions" by Tim Ash:
   This book is a complete guide to building effective, optimised landing pages. Tim Ash shares his knowledge and experience through real-world examples, case studies and actionable strategies for improving conversion rates. More information​ (Convertica)​.
2. "You Should Test That!" by Chris Goward:
   Chris Goward, an A/B testing expert, reveals practical techniques for increasing conversions on websites and marketing campaigns. The book provides a step-by-step process for understanding what works and what doesn't on your site or campaigns, based on real-world examples. More information​ (Convertica)​.

Frequently asked questions about CRO

1. What is Conversion Rate Optimisation (CRO)?

Conversion Rate Optimisation (CRO) is the process of improving the percentage of website visitors who complete a desired action, like a purchase or subscription. It involves analysing user behaviour and implementing strategic changes to the site to increase conversions. The goal is to maximise the value of existing traffic without needing to attract more visitors.

2. What are the benefits of implementing CRO?

Implementing CRO improves return on investment (ROI) by converting more visitors into customers without increasing traffic. It also improves the user experience, which can lift customer satisfaction and loyalty. On top of that, it reduces customer acquisition costs by optimising site performance.

3. How is the conversion rate measured?

The conversion rate is measured by dividing the number of conversions (desired actions completed) by the total number of visitors and multiplying the result by 100 to get a percentage. For example, if 50 out of 2,000 visitors complete a purchase, the conversion rate would be 2.5%. This metric is essential for evaluating the effectiveness of CRO strategies.

4. What are some popular CRO tools?

Popular CRO tools include Google Analytics for traffic and user behaviour analysis, Hotjar for heatmaps and feedback surveys, Optimizely for A/B and multivariate testing, and Crazy Egg for click analysis and session recordings. These tools help identify areas for improvement and run tests to optimise the site's conversion rate.