Conversion rate optimization - the ultimate guide

Marketers focus heavily on driving traffic towards websites with SEO efforts and social media, but what happens once visitors start landing on your website? How does this traffic convert to leads, and what can you do as a marketer to improve conversions?  

Here’s a comprehensive guide to help you understand what conversion rate optimization (CRO) is, and how it can help your company.

What is conversion rate optimization?

Conversion rate optimization (CRO) is the data-driven process of modifying your website and its elements to improve conversion rate. Conversion is an action that you want your visitors to take. Examples include signing up, making a purchase, clicking on a link, or subscribing to a newsletter.  Conversion rate helps you convert more of your website traffic by optimizing the website experience. Let’s assume 10 out of 100 of your website visitors sign up for a free trial. After improving your website, this rate could increase to 20 sign-ups per 100 visitors. 

 

CRO is user-centric

 

Website conversions are directly linked to the experience you offer your visitors. If your website has a clear value proposition, the content is meaningful, and your user is drawn to your calls-to-action, there is a high chance of them taking the action you want them to. If this doesn’t happen as expected, you might be doing something wrong. Conversion rate optimization is all about identifying what is wrong, and running experiments to see what works better. 

What is conversion?

Conversion refers to completing a site goal. Site goals are website actions that align with the overall webpage objective. Different businesses set different kinds of site goals. Website conversions or site goals fall into two categories:

Macro conversions

These are the primary goal of the web page. To optimize for macro conversions, you need to track and refine micro conversions. 

Some examples: 

  • Revenue conversions - checkouts, purchases. 

  • Prospect/Customer acquisition - demo request, sign-ups. 

  • Content subscriptions - signing up for a newsletter, etc.

Micro conversions

These are intermediary small goals that lead to a macro conversion. They show the visitors intent towards a potential macro conversion in the future. 

Some examples: 

  • Interest-based conversions - downloads.

  • Navigational conversions - scroll, clicks. 

  • Interaction-based conversions - watched a video, adding to cart.

What is conversion rate, and how to calculate it?

Website conversion rate is the percentage of visitors who complete a site goal successfully.

 

In this equation, conversions can be anything. You ought to know precisely what you’re working towards, and what constitutes a micro- or macro-conversion. The exact way to calculate your conversion rate may vary from business to business, and page to page.

Let’s take the example of an e-commerce website. Your micro-conversions here might be the visitor staying on the page, clicking on the products, browsing through your catalog, and adding products to their wish list or shopping cart. These tiny conversions guide your visitor towards a macro-conversion—making a purchase (the final transaction). Out of 20,000 visitors, perhaps 2000 purchased something. Following the above formula, your conversion rate would be 20%.

Unfortunately, that’s not enough information. Defining a purchase as a conversion in this example doesn’t account for revenue, since it treats visitors who bought something for $1 or $100 the same way. To fully understand what’s happening on your site, you need to put other metrics in place and gather a lot of data.

Getting started with conversion optimization

The success of your CRO program depends on how detailed you get with your data collection and analysis.

Understanding the existing data is crucial for improving your conversion rate. This will enable you to make an objective decision on what to optimize, and the best ways to do it. If you're not using data to guide you through the process, you’re only validating whims and biases.

Here are some different methods used for conversion optimization:

The quantitative method

This method uses an objective approach to measure actionable user behavior on your website. To get started with quantitative conversion optimization, begin collecting data using web analytics tools. With this method, you can find out information like: 

  • Which are the most and least visited pages on your website?

  • What's the entrance path of visitors to your website? 

  • How much time do visitors spend on specific pages?

  • What's the bounce rate of the site and particular pages?

  • How many visitors convert?

  • What's the visitor profile (demographics and interests)? 

  • What devices and browsers do they use? 

  • Which pages do they exit from? 

  • What channels brought them to the site

This information will let you identify your most valuable users and help prioritize pages that need optimization.

The qualitative method

This method is a subjective approach to understanding user experience, pain points, and hesitations. Start by identifying your ideal customer and keeping their needs in mind, as you frame questions to collect more data. 

You can get started with qualitative CRO using customer surveys, interviews, user testing, net promoter score (NPS), customer support tickets, session replays, chat logs, polls, and feedback. Using this form of analysis, you can find answers to questions such as: 

  • What are the most common reasons customers visit your website? 

  • What are the pain points they're trying to address using your products or services? 

  • What do they think about your products or services compared to competitors? Is there anything specific (features, pricing, support, etc.) that they look for?

  • What was their experience like after they bought your products or services? 

  • Would they recommend you to a friend? If yes, how would they describe your product? 

While quantitative data provides you information about what's working and what's not on your website, the picture is still incomplete. This is where qualitative analysis fits in. It helps you understand why users are not converting to your website, and how they perceive your brand.

The wrong method (do not follow) 

CRO is all about following a process. Certain practices can take you off track in the conversion process, such as:

  • Ignoring data and executing based on your assumptions, guesses, and gut feelings 

  • Doing something because your competition has done it

  • Taking others' opinions and biases into account

CRO is data-driven and research-oriented. You shouldn't leave room for guesswork and uninformed decisions.

Benefits of conversion rate optimization

Marketers report an average return on investment of 223% on CRO tools. This shows that an effective conversion rate strategy can set you up for big wins, not only for your website but also for the entire marketing funnel. Here are some of the benefits:

Better experience for your visitors

Improving your website’s conversion rate starts with researching current visitor behavior, identifying what visitors are looking for, and evaluating how well your website matches up. When you fix the issues they face, your visitors will find your site easier to navigate. Their engagement will improve, and so will their chances of converting. So, ideally what you are improving with CRO is the visitor's experience, as well as the conversion rate. 

Better customer insights

The CRO process is like ongoing customer research. You will learn about your customers’ behavior and the messaging that appeals to them. This information can help you understand the ideal customer persona for your business, and ensure you acquire the right kind of customers.

Better ROI from existing traffic

CRO enables you to make the most of your website traffic. Higher conversion rates mean that you will gain more leads, subscribers, or customers from the same number of visitors.

Primary elements of conversion rate optimization

Conversion rate optimization is about evaluating every part of your site. To improve your conversion rates, you’ll need to look at the way visitors interact with various elements of your web pages. You may want to gather data on these elements using A/B testing (more on that below). Here are some key factors to consider:

Website copy

A good place to start with CRO is by looking at your copy. If your copy is confusing, lackluster, or not persuasive enough, this may negatively impact your conversion rates.  Ask yourself these questions when evaluating your website copy:

Landing page design

The design of your landing page can have a big impact on conversion rate. This includes everything from button placement and calls-to-action to font size—using readable fonts can make your copy more impactful.

Even something as simple as your page colors can influence how people interact with your site. Did you know that according to color psychology, blue is considered more reliable and dependable, while red drives action and urgency?

CRO Element 2: Landing Page Design

                                                                                                                                               Screenshot from Apple.com

Form design

Getting a user to fill out a form can be its own micro-conversion, whether they’re using the form to request a quote, download a lead magnet, or subscribe to a newsletter. Making it easy to submit the form can help you improve your conversion rate.

Here’s what you should consider:

CRO Element 3: Form Design

                                                                                                                                                Screenshot from NYTimes.com

Call-to-action

"Call-to-action” are phrases that encourage your customers to take any action, such as “submit” or “contact us”. You’ll often see call-to-action on buttons, which may be found in different areas of your site. When optimizing your call-to-action, you can experiment with copy, button color, or placement on the webpage, among other variables.

Site navigation and page speed

Finally, don’t forget to consider the way customers navigate your website. This can be a more important factor in conversions than you may think.

Make sure your site is easy to navigate and that customers can find what they’re looking for. You can do user testing to gain insights on this—have customers try to perform certain actions on your website, and then report back to you how their experience was and if they ran into any issues. This is a great way to find broken links, unclear instructions, or other “blockers” in your funnel.

Think about your site’s technical capabilities, too. If your site is slow to load, this can impact user experience and may even affect your SEO. To improve your site’s speed, try compressing large images and videos, using a page-speed plugin, and removing unnecessary redirects. 

CRO Element 5: Sitemap

                                                                                                                                                     Screenshot from Designerhire.com

Conversion rate optimization business use cases

You might wonder if other companies like yours use conversion rate optimization. The answer is a definitive “yes”. There are plenty of business success stories out there that show what companies have done to improve their conversion rates.

When it comes to the world’s largest and most successful companies, many have teams working on CRO, as well as related fields like user experience and SEO. That’s why these companies tend to have highly usable and effective websites. Below, we’ll give three examples of large companies in different industries, and explain what makes their websites work well. 

Uber (transportation industry)

Uber’s users visit their website for a number of different reasons. Maybe they want to get a ride, order from UberEats, or sign up to drive with Uber. Uber makes sure to send their users to the right place right away by using simple, short copy and easy-to-understand icons.

CRO Use Case: Uber

Amazon (eCommerce industry)

One technique that Amazon uses to make more sales through their website is “upselling”. When you’re shopping for products, they make sure you get to see other similar products that you might like, too. Their algorithm recommends products that are related or frequently bought together. 

CRO Business Use Case: Amazon
CRO Business Use Case: Amazon

Booking.com (travel industry)

Booking.com uses a few different principles to optimize their conversions: fear of missing out (FOMO), the scarcity principle, and color theory. If you look at Booking.com’s website, they use red text to convey a sense of urgency, showing users that certain properties are popular and likely to sell out soon. They’ll describe how many times the property has been booked in the past few hours:

CRO Use Case: Travel1

Show that other properties in the same location are selling quickly:

CRO Business Use Case: Travel

And show that certain types of rooms are being booked out:

CRO Business Use Case: Travel

The right time to do conversion rate optimization for your business

So maybe you’re convinced that conversion rate optimization is a great way to get the most from your website, and you’re ready to get started with it. The question is, when’s the right time to begin thinking about CRO?

The best and easiest answer is ASAP! Ideally, you’ll want to incorporate data, testing, and CRO best practices when you create your website, and whenever you send out marketing materials (like email newsletters or Facebook ads).

When it comes to your website, though, deciding when exactly to make changes can be difficult. Changes require site maintenance, which means your website might have to be down for a while. This can be disruptive to your business.

That’s why some experts recommend doing conversion rate optimization during a site migration. Since you’ll be making changes to your website anyway, this is a great opportunity to examine what’s working and what’s not. You can create multiple wireframes and prototypes, employing user research and testing to see which ones are the most easy-to-use and effective.

Building an effective conversion rate optimization strategy

To build a CRO strategy, you’ll need to first brush up on your CRO knowledge and then create and execute a plan. Here are the steps you should follow:

Understand the sales funnel

The first place to start with conversion rate optimization is to understand what the sales funnel is, and what it looks like. 

Here are the steps in the sales funnel:

  • Awareness 

  • Discovery

  • Evaluation 

  • Intent

  • Conversion

Why do you need to understand these steps to create a CRO program? Because every time a customer converts, they go through a process. Before they take that final step of buying your product, they first have to know what it is, understand what it can do for them, compare it with competitors, and decide to make a purchase. 

CRO Sales Funnel

Read up on different CRO techniques 

Once you’ve understood the sales funnel, the next step is to read up on specific CRO techniques you can use. We’ll talk more about these techniques in the next section. Some of them, like A/B testing and color psychology, have already been mentioned.

Remember to consider both quantitative and qualitative methods of conversion rate optimization. Applying best practices selectively or testing only some elements might improve your conversions temporarily, but it won’t be as effective as coming up with a comprehensive CRO plan.

Ideally, CRO should be integrated into your overall marketing plan. It should be something you revisit quarterly, bi-annually, or annually on your website, and even more frequently in your ads and newsletters.

CRO Techniques

Create a plan 

After you’ve decided which techniques to use, create a plan for your CRO program. 

Your plan should include: 

 

  • Which CRO techniques you’re going to use: Will you focus on quantitative or qualitative methods? Which techniques do you want to prioritize, and what is your rationale for that? Which elements will you test, and in what order? 
  • How CRO fits into your broader marketing plan: What are the main goals you are hoping to achieve with CRO? Are there specific KPIs you are hoping to reach, and what are your timelines for those?
  • When you plan to make changes to your website, app, advertising materials, etc.:  As mentioned in the previous section, website migrations can present a good opportunity to make CRO changes. With advertising, conversion rate optimization may be a more continuous process. Many email marketing software providers offer functionality for A/B testing.

 

CRO: Create a plan

Execute your plan

Finally, the last step is to put your plan into action. This means:

Running tests and doing user research: This first step is all about gathering data. Plan an appropriate time to do your tests. If you are doing user research, think about how you’ll get in contact with users—will you simply reach out by phone or email, or use a third-party testing service? How big do you want your sample size to be?

Analyzing your data and drawing conclusions: Once you’ve gathered your data, you’ll need to take a look at it and decide how you want to act on it. With quantitative testing (like A/B tests), this process is fairly simple—obviously, you’ll want to use the higher-performing version of the marketing materials you tested. With qualitative testing, things can get a little bit more complicated. If some users dislike your website’s color scheme while others do like it, whose opinion should you follow? In this case, you’ll have to use your judgment to decide what to do with the results you have.

Putting your conclusions into practice by making changes: While making changes is the final step of the process, your journey with CRO is not over just yet. You’ll want to verify that your changes really are producing the desired results. If so, you still need to make sure the positive trend is sustained over time.

CRO: Execute your plan

Common CRO techniques to try

With CRO increasingly becoming a focus area, new research and findings continue to surface. You shouldn’t necessarily jump into applying these on your website. Any corrective action should be based on data and visitor feedback. However, here are some basic techniques that you can try to optimize your website’s conversion rates.

Use lead magnets

A lead magnet is an incentive for website visitors to give you their email address or other contact details. This might mean, for example, offering a content piece—such as an ebook, whitepaper, or checklist—as a free download. Relevant and carefully thought-out lead magnets help you convert more of your regular readers into leads and customers. You can place lead magnets within blog posts or use pop-ups, slide-in boxes, or dropdowns to showcase them.

Offer live chat 

You can improve conversions by adding a chat functionality on your top-converting pages or critical pages like pricing and checkout. Live chat lets you engage with visitors in real-time to nudge them into conversion and provide more value. It increases the likelihood of them taking action, instead of staying inactive on the page or leaving. 

Re-engage your website drop-offs

Even with your best optimization efforts, there will always be visitors who exit your website without converting. With a little advertising budget, you can use retargeting to bring them back to your site. You can run campaigns based on cookie settings, and bring back website visitors with retargeting ads.

Leverage your high-performing blog posts

You'll always have a set of blog posts consistently outperforming the others. You could use these posts by improving their call-to-actions, or adding page banners. These blogs can also be used to drive more traffic to other pages.

Set up heatmaps

Heatmaps help you see how all your visitors interact with your website. You can understand how a visitor has scrolled through your page, where they clicked, and how deep in the page they went. With this information, you can optimize your pages for more clicks and higher scroll depth.

Run A/B tests

One of the most tried-and-true recommended CRO techniques is A/B testing. With A/B testing, you can create different versions of the same page and experiment with which version works better for your audience. This will help you understand your audience better. In the next section, we’ll talk more about A/B testing and its essentials.

Essentials of A/B testing

A/B testing lets you compare two or more variants of a page by showing them to a similar audience. You can then implement the one with a better conversion rate. 

Website conversion optimization is an objective process, which means you’ll need to think through all the details of your testing beforehand. Start with a well-formed hypothesis to prioritize testing opportunities.

Running a test

Ending your test too soon or too late might produce inconclusive results. To ensure your tests for an optimum duration, keep in mind your traffic and the statistical significance. A statistical significance of 95% is usually recommended as an excellent point to end the test. 

Elements to test

As mentioned before, you can test every element on your website which guides the visitor through the conversion funnel. You can optimize website copy, images, videos, headlines, CTAs, links, web forms, and more. More advanced tests might include content length, depth, placement, pricing, or navigation. Prioritize your most important and visible content assets when deciding what to test first. 

Advanced tips and CRO best practices

You might be wondering what the pros keep in mind when they’re doing CRO marketing. Are there any best practices you should know about? Remember that CRO is a mindset. It’s about more than just A/B testing, user testing, or color theory. CRO is about understanding your users’ psychology and the way they think. If you haven’t already, consider creating personas showing your ideal users and their interests, characteristics, and pain points.

Besides psychology, the other main element to CRO marketing is using data and a scientific approach. Testing, heatmaps, website analytics, and other methods provide you with lots of data, but the question is what you do with that data. Consider creating data visualizations and graphs to understand the bigger picture of what’s happening on your website. Sophisticated analytics tools can provide you with deep insights to help you make better decisions.

Five Mistakes to Avoid While Doing CRO

As with any new skill, when you’re learning about CRO for the first time, you may be concerned about making mistakes. Here are five common mistakes newbies sometimes make when getting started with CRO, and how to avoid them.

Running Tests at the Wrong Time of Year

Seasonality is a real thing, and running tests during unusual periods can lead to skewed results. In particular, you’ll want to avoid times when people often go on vacation (such as August or late December). 

If you work in a seasonal industry, it’s even more important to pay attention to when you run your tests. For example, here is a graph of Google search results for the term “ski equipment” in 2020:

CRO Mistake1: Running Tests at the wrong time of the year

Notice how it peaks during the winter season? Now, compare that with the search trend for “outdoor pools”:

CRO Mistake: Running tests at the wrong time of the year
 
Thinking of CRO as a “One Time Thing”

It’s important to note that CRO is an ongoing process, and isn’t something you can simply “do” one time and be finished. Your CRO efforts should be continuous over time, since your business, industry, and customer base might change.

Have a look at the Amazon.com homepage back in 1999:

 

CRO Mistake: CRO is ongoing process

 

Versus in 2021: 

CRO mistake: Amazon website

 

Notice the difference? Nearly everything has changed, from the design and layout to the colors, site copy, and page structure. That’s because Amazon has been continuously updating their CRO, marketing, and web design strategy over the years.

 
Using Sample Sizes That Are Too Small

Another CRO mistake is using a sample size that is too small during user testing. Since it can be difficult to get in touch with users and convince them to participate in a test, it may be tempting just to ask a few users for their opinion. The problem is that the smaller your sample size is, the less likely it is that the results are statistically significant.

So, how big should your sample size be? According to the Nielsen Norman Group, you should have at least five users in a qualitative study and 20 users in a quantitative study. You’ll notice that the number is quite different for the two kinds of studies. That’s because although smaller groups are less likely to be statistically significant, their insights can still be valuable for your research. 

 
Thinking CRO is Just About A/B Testing

Another classic CRO mistake would be associating the whole field with just a single type of testing. Equating CRO to A/B testing is like equating UX to wireframing or SEO to keyword research. Those techniques are a part of the field, but they don’t make up the big picture.

To thoroughly understand CRO, you’ll need to understand digital marketing in general. This includes user psychology, research methods, and the marketing funnel.

 

CRO is not just about A/B Testing
Prioritizing “Conventional Wisdom” Over Data

Finally, the last thing to avoid in CRO is making assumptions. There’s inevitably some subjectivity involved in conversion rate optimization, and you’ll probably be selecting your preferred colors, designs, and copy at certain points in the process. The idea is not to eliminate subjectivity entirely—it’s to always test and pay attention to what the data says.

If a certain version of your landing page, newsletter, or ad performs better than your preferred version, it’s important to ask yourself why. Are some features making your preferred version difficult to use? Is there something in the new version that’s attractive to customers? When done right, CRO should be a scientific process that provides you with these insights.

The best conversion rate optimization tools

There are many conversion rate optimization software tools currently on the market. To choose the best one for you, think about the type of tests you want to run, the functionalities you need, and your budget. You should also look at reviews and case studies when deciding what software to invest in. 

Full-Service Analytics Tools

 

Freshmarketer

Freshmarketer helps marketing teams deliver more personalized customer experiences at every touchpoint across their lifecycle. Get insights into your audience’s behavior and engagement to create unique buyer experiences. Freshmarketer helps you get the most from your conversion rate optimization strategy. Here are just some of the things you can do with it:

Heatmap Tools
 

Hotjar

Hotjar is a heat mapping and analytics tool for conversion rate optimization. With Hotjar, you can easily create heatmaps and collect user feedback on your website.

Heatmap.com

Heatmap.com is a real-time analytics tool, focusing on (you guessed it) heatmaps, and only heatmaps. This augmented reality tool can be installed on your website via a Javascript tag.

A/B Testing Tools

 
Optimizely

Optimizely lets you create and test variations on your website or mobile app. Designed for marketers, product managers, and developers, it lets you personalize your marketing campaigns and run A/B tests.

Hubspot’s A/B Testing Kit

Marketing giants Hubspot and Kissmetrics offer a free kit to help you get started with A/B testing. The kit includes guidelines for effective A/B testing, information about what variables to test and how to run split tests, a simple significance calculator, and a template to help you organize your tests.

Visitor Recording Tools

Hotjar

Along with heatmaps, Hotjar also allows you to make session recordings on your website. If you’re wondering what a “session recording” is, it’s a recording of real actions taken by visitors as they navigate through your site. You can use Hotjar to see a user’s clicks, taps, scrolls, and mouse movement in an anonymized format.

Mouseflow

Mouseflow is another tool that allows you to produce session recordings from real users. The tool also includes other functionalities, like heatmaps, funnels, and forms.

Form and Funnel Analysis Tools

Inspectlet

While including heatmaps, session recording, and A/B testing functionalities, Inspectlet also offers form analytics insights. Using the tool, you can understand engagement rate, hesitation, form validation fail rate, and more. You can also see how many visitors make it through each stage of your funnel.

Contentsquare

Contentsquare offers form analysis, as well as other analytics features like heatmaps and session replay. The software can help you detect friction in your funnel, and can be set up without using custom tags. 

Conversion rate optimization marketing strategies

 

Conversion rate optimization is a part of digital marketing. When digital marketers create websites, apps, newsletters, and advertisements, they optimize them using CRO, SEO, and UX best practices. We’ll talk more about SEO and UX in the next few sections.

CRO should be a part of any digital marketing strategy. When you invest in digital marketing, you want it to be as effective as possible. CRO lets you move beyond doing what “looks good” or what your competitors are doing and instead make decisions about your marketing budget using data. Remember to always test your marketing collateral, and make sure the design and copy are top-notch.

CRO and SEO

 

While CRO and SEO are related, they are not the same. Search Engine Optimization (SEO) is about increasing relevant traffic to your website by improving your organic search rankings. It has a direct impact on who comes on your page. CRO, on the other hand, focuses on increasing conversions from your existing traffic, and directly impacts who enters your conversion funnel.

Because many website owners choose to work on SEO and CRO together, these two fields often impact each other. For example, when you improve your page copy after A/B testing around a particular keyword, it might impact your SEO rankings. If conversion-optimized copy performs better than SEO-optimized copy, you may need to think of a way to balance these two important concerns as part of your strategy. Both CRO and SEO can help you improve your marketing funnel. Combining the powers of both brings higher returns.

 

CRO & user experience

 

We’ve already spoken a bit about how conversion rate optimization relates to user experience (UX).  Like SEO, UX is closely related to CRO.

 

What is user experience?

 

According to the Nielsen Norman Group, user experience “encompasses all aspects of the end-user interaction with [a] company, its services, and its products”. Generally, user experience is just about how your customers perceive you and your product. But this term is often specifically used to talk about how customers interact with a website or app.

Optimizing for UX means using research, data, and best practices to improve your website, making it easier and more enjoyable to use. 

 

How should you integrate user experience with CRO?

 

User experience and CRO are two sides of the same coin. Often, when you optimize for conversions, you’ll end up optimizing for user experience as well. For example, if a broken link on your website is preventing users from adding items to their shopping cart, fixing the problem will likely increase your conversions. It will also improve your UX, preventing customers from becoming frustrated that they can’t add items to the cart.

However, there will be other times when UX and CRO objectives seem to conflict. For example, maybe adding misleading copy or design to your website leads to an increase in sign-ups, as customers accidentally click the “sign up” button. While this might increase your conversion rate, it is also bad for the user experience, since users will develop a negative impression of your website and company.

You’ll probably find that CRO tactics that are bad for user experience don’t actually end up improving conversion rates in the long run. Frustrating or misleading your users might lead them to convert in the short term, but it will affect their opinion of your brand and likely prevent them from buying from you in the future. This is why you should always try to make sure your CRO program is user-friendly. 

Here are some UX principles to keep in mind when optimizing for conversion rate: