CRO and CRO Metrics

Digital Marketing - Study Notes:

In digital marketing, conversion rate is an important metric. Conversion rate is defined as the number of visitors to a website that completes a desired action – known as a conversion – out of the total number of website visitors. For example, if a website receives 1,000 visitors in a month and has 100 sales, the conversion rate is 10%.

The desired action or conversion you want customers to take is often a sale, but not always. It could be a smaller action that moves people further along the sales funnel toward a purchase. A conversion action might involve a customer:

• Clicking a banner ad or a text ad
• Clicking through to a desired webpage
• Downloading a report or whitepaper
• Subscribing to a newsletter
• Completing an online form
• Signing up for a webinar

Whatever the desired action may be, it’s valuable to your business and it’s measurable. It moves visitors toward those critical activities you’ve identified for your business’s success. And, importantly, it helps turn lookers into buyers.

It’s important to track and analyze your website’s conversion rate. That’s because when you know the percentage of users who take the valuable actions that drive your business, you can measure how well your website is performing and identify areas for improvement.

Conversion rate optimization (CRO) is a strategy you can use to increase the percentage of visitors who take a desired action on your website.

While undertaking a conversion rate optimization strategy can be challenging, it offers many benefits. For example:

• It helps you understand your customers better.
• It improves customers’ on-site experiences.
• It maximizes your PPC spend.
• It maximizes sales.
• It increases return on investment.

Before you get started, the first step is to figure out what conversion rate you should aim for. What’s considered a good conversion rate by digital marketing experts?

According to Larry Kim, founder of WordStream, the average landing page conversion rate across industries is about 2.35%. However, the top 25% of companies have a conversion rate of 5.31% or higher. And the top 10% are converting at a rate of 11.45% or higher.

You should aim to perform better than the average performers and try to break into the top 10%. You need a conversion rate of 11.45% to do this. A good CRO strategy or program can help you double or even triple your current conversion rate relatively quickly.

To reach your desired conversion rate, you’ll need to monitor and improve your website’s overall performance. This involves tracking and measuring conversion rate dimensions and metrics. There are thousands of these available to track, so it’s important to focus on the key metrics that are critical to CRO success.

Metrics are always expressed in numerical form, such as a number value, a percentage, a dollar amount, or a time, while dimensions are expressed by non-numerical values.

The key conversion rate dimensions to track include:

• Traffic sources: This dimension helps you discover where visitors find your website and how well these visitors help you achieve your goals. Your visitors may be direct visitors, search visitors, or referral visitors who click through to your site from somewhere else, such as a social media page, email, or blog. It’s best to have several different sources for incoming traffic.
• Device type: You can use this dimension to discover which devices people use to visit your site and which devices they use to convert. Devices may include desktop computers, tablets, laptops, and smartphones. You can then ensure your website is optimized for these devices.
• Location: By tracking this dimension, you can identify your conversion hotspots by location. You can then ensure your content is localized for audiences in these locations.
• Exit pages: An exit page is the last page viewed by a visitor, so this dimension helps you figure out which pages cause people to leave your website. For example, if people frequently add an item to their shopping cart but leave your site on the payment page, it’s possible that your payment page is overly complex and takes too long to complete. If people tend to leave your site on a product page, it’s possible that this page is poorly designed and doesn’t showcase your product effectively; alternatively, perhaps the problem is website navigation and visitors can’t find the button that allows them to purchase. When you know why visitors are leaving your site, you can take steps to address these issues.

The key conversion rate metrics to track include:

• New visitor conversion rate: This metric helps you see how first-time visitors interact with your site. They tend to interact very differently to returning visitors. It’s critical that when people visit your site for the first time, you make a good first impression. Your website should appear clear, useful, and valuable – and it’s necessary to convey this impression in a few seconds. When you analyze this metric, think about how you can improve your site navigation and structure, as well as the content you offer visitors.
• Return visitor conversion rate: With this metric, you need to consider why the person returned to your site, whether they converted on their previous visit, and if they didn’t, how you can convert them on their subsequent visit. It’s safe to assume that return visitors are further along the purchase funnel than new visitors, so the conversion process should be easier.
• Interactions per visit: You can use this metric to discover what non-converting customers do on your site. For example, maybe they look at lots of different website pages, read your blog, watch videos, or leave comments. Your goal is to figure out how you can turn these user interactions into conversions. You can use a website analytics tool like Google Analytics, HotJar, or Crazy Egg to help you track this metric.
• Value per visit: This metric tells you how much money was generated on average each time a user visits your website. You can calculate value per visit by dividing the total revenue by the number of visitors to your site. For example, if an e-commerce site sells about $500 for every 100 visitors, the value per visit is $5. This metric can be difficult to calculate because the value is generated long after the site visit has ended. In addition, some forms of value are intrinsically intangible, such as when a visitor comments on your site, leaves a positive review, or takes an action that makes your website look more authoritative but doesn’t result in a direct sale or conversion.
• Cost per conversion: This is one of the key metrics for CRO success. It’s also referred to as lead generation costs or cost per referral. It shows how much you spend to generate a conversion. Your cost per conversion shouldn’t exceed the revenue or value you generate per conversion, as this will result in your business losing money. So, it’s important to consider your costs per conversion and overall margins when figuring out how to increase your conversion rate.
• Bounce rate: This metric measures the rate at which new visitors visit your site and immediately leave without taking any action. A high bounce rate may indicate several things. It could mean that you’re attracting the wrong type of visitors to your site or that you’re driving them to the wrong pages. It could also mean that your landing pages are poorly designed, contain irrelevant or low-quality content, or take too long to load. In e-commerce sites, bounce rates are also called cart-abandonment rates and often result from a cumbersome checkout process.