Conversion Rate Optimization
Everything you need to know about Conversion Rate Optimization, from definition to strategies and examples.
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Table of Contents
What is Conversion Rate Optimization?
Conversion Rate Optimization is the practice of increasing the percentage of your current website traffic that perform a desired action on your website.
These actions are known as conversions and they are the goal of any marketing effort. These desired actions could be purchasing a product, filling out a form, submitting an email address, or clicking a call-to-action (CTA).
In the next section, we’ll go over exactly how to define a conversion for your business based on your marketing goals.
Defining a Conversion For Your Business
To determine what a conversion looks like for your business, first you need to determine the extent at which your website can “sell” your product or service.
For example, if you sell a low effort, short sales cycle item such as T-shirts, a conversion for you is likely the sale of the product.
On the other hand, for a higher effort, longer sales cycle item such as a new car, a conversion is likely the submission of a form with a potential customers’ contact information.
You could also look at it in terms of what goal you need your website to achieve. Maybe you aren’t selling anything at all and just want people to sign up for a webinar.
In that case, a conversion would be someone creating an account or submitting a form to sign up.
Once you have defined what a conversion should be for your site, you can now take steps to optimize the user experience in order to influence visitors to take that action.
How to Calculate Conversion Rate
The rate at which a website converts it’s visitors is known as conversion rate. This metric is usually defined by a percentage of total visitors that performed the conversion action.
For example, if Website A had 1,000 total visitors this month and 30 of those visitors bought a product, their conversion rate would be 3% for the month.
Conversion rate is a very important key performance indicator (KPI), and will serve as a primary metric by which your site’s performance will be measured.
What Is a "Good" Conversion Rate?
Unfortunately, because conversions and conversion rates vary so extremely across all industries and stores, there isn’t really a widely accepted average or “good” conversion rate.
The good news is that it’s fairly simple to benchmark your current conversion rate, and as you test, figure out what works and what doesn’t.
To get an accurate benchmark of your website’s current performance, check out Justuno’s Conversion Rate Optimization Analyzer.
Why Should I Optimize For Conversions?
Increase Leads & Sales
The whole idea of conversion rate optimization is to increase the amount of visitors that take steps toward becoming a customer.
Thus, the end goal is to maximize the amount of visitors that convert into customers from your website’s current traffic.
Increase Return On Investment (ROI)
According to Bryan Eisenberg, for every $92 spent on driving traffic to a website, only $1 is spent on optimizing the website’s experience for conversions.
By optimizing your site to convert visitors, you are increasing the ROI of your marketing campaigns by improving the value of the traffic you’re already driving.
Improve User Experience
Aside from the fact that User Experience (UX) is often used as a key differentiator from competitors in 2021, offering an easy and convenient way for visitors to explore your brand and your products is a great way to add value to their experience.
On top of that, as your website is likely a Top-Of-Funnel (TOFU) element, a great UX would mean a positive first impression as visitors enter your marketing funnel and familiarize themselves with your brand.
Not to mention the Search Engine Optimization (SEO) value in having a great UX, as user experience metrics are used by Google to determine search result rankings.
Better Understand Your Customer Base
Every customer base is unique, and optimizing your website for conversions will give you clear insight into how your customer base responds to different parts of your site.
Whether you’re testing out different styles of your homepage or using a promotional tool, constant optimization and tracking will allow you to keep in touch with the wants and needs of your customers.
A/B testing (also known as split testing) is a fundamental strategy when it comes to conversion rate optimization.
Split testing is essentially defined as showing two variants of a page or part of your website to different segments of your users at the same time, and then comparing the two to see which performed better.
There are a few different types of testing, which are broken down below.
With standard A/B testing, you are testing one variable with two variations of content.
(Testing the color of a button. One version is blue, one version is green.)
Similarly, A/B/N testing tests one variable with three or more variations of content.
(Testing the color of a button. One version is blue, one version is green, one version is red.)
Finally, multivariate testing tests multiple variables using multiple variations of the same content at the same time.
For example, a company wants to test the headline and image of a promotion running on their site. To run a multivariate test, the company will create four variations of the promotion. These variations will be structured like this:
Variation A – Headline A, Image A
Variation B – Headline A, Image B
Variation C – Headline B, Image A
Variation D – Headline B, Image B
In this case, these four variations will be shown to 25% of total site visitors each. After one month, the highest converting promotion will be kept and shown to all visitors.
A/B Testing In Action
One very common example of this strategy is showing a percentage of your users a new variation of the “Hero” section of your homepage while showing the rest of your visitors the original Hero section.
For this example, we’ll say that out of 1,000 total users, 500 will be sent to the new page and 500 will be sent to the existing page.
We’ll also say that a conversion in this example is defined as a user clicking the Call To Action (CTA) button which exists in both Hero sections.
After one month, we found that 100 users that were sent to the new Hero clicked the CTA, while 50 users that were sent to the existing Hero clicked the CTA.
The conversion rate for the new Hero was 20%, and the conversion rate of the existing Hero was 10%.
With this information, we can easily see that the new Hero converts at a higher rate, and should be implemented for all users going forward.
Now, for this example we won’t be diving deeper, but A/B testing is an iterative process. Continuing to test components of your site one after another will result in a constant improvement process with each test building on the success of the last.
For a real-life example of how a store increased conversions by 300% using A/B Testing, check out this case study.
What Should I A/B Test?
The performance of your site’s conversion funnel, or the page-by-page path in which visitors travel before “converting” into a lead or customer, will determine how much revenue your website brings in.
It’s important to focus on the most influential parts of your website while performing these tests to maximize your ROI. Below is a list of the most common / influential factors.
1. Body Copy
The body copy of every page of your site typically determines whether or not a visitor converts. The word choice, tone of voice, informational content, and value of your headings and paragraphs will either foster trust and clearly convey the value of your product or it will not.
Split testing different variations of the content on your website is a key component of conversion rate optimization and it will provide detailed insight into what actually resonates with your customer.
A/B testing different elements of your promotions such as CTA, tag line, offer copy, offer amount, images and number of steps are very important when it comes to conversion rate optimization.
As you test, you’ll develop insights that will help you perfect promotions and maximize ROI.
For a more in-depth look into split testing your promotions, check out our A/B testing Website Promotions Case Study.
3. Design & Layout
While it may seem benign, something as small as color scheme or spacing could be costing you revenue.
Testing design elements of pages and page components is a common and important part of a conversion rate optimization strategy.
Unfortunately, this part of your strategy will not be as straight-forward as the others. It can be difficult to find out which elements of your design were liked and which ones weren’t.
Nevertheless, testing out different designs, colors, layouts and formats will help narrow it down as much as possible.
How To Perform An A/B Test
Step 1 – Identify Key Performance Indicator (KPI)
Your first step should be to define the KPI that you’d like to impact. This KPI is almost always an increase in conversions, whatever they may be for your business.
Step 2 – Identify and Hypothesize
It is crucial that you identify an area within your site that impacts/influences your conversion rate using your existing knowledge and research of your customer base, as well as existing analytics on your site’s traffic flows.
For example, let’s say your funnel looks something like Page 1 > Page 2 > Page 3 > Conversion, and you notice through Google Analytics that you’re losing half of your visitors after they visit Page 2.
Let’s also say that we hypothesize that the video that plays on a loop in the “Hero” section of Page 2 is the issue, as visitors may not like it or the video is actually slowing down the page speed.
Now we’ve identified what to test, and we have an idea of how to test it.
Step 3 – Create a Variation
The next step in setting up this test is to create a variation. Luckily, based on the example above we have a pretty good idea of how to test our hypothesis.
For this example, we’re going to display the original page (Variant A) to half of our visitors and a copy of the same page without the video (Variant B) to the other half of our visitors.
Outside of this example, you could also implement another variation (A/B/N Testing) or another variable (Multivariate Testing). These more advanced strategies may give you more data or speed up the results of your testing.
Step 4 – Test and Iterate
Now that we’ve set up our variations, we can begin segmenting visitors and tracking how many continue to Page 3 (our conversion for this example).
Remember, A/B testing is an iterative process. Your tests should build on previous testing and data in order to culminate in the most conclusive and accurate results.
A/B Testing Do's & Don'ts
- Run your tests for a minimum of 30 days.
- Ensure that each test sees a minimum of 10,000 sessions.
- Test a single variable until you are experienced and comfortable enough to test multiple.
- Start and stop every test on the same weekday.
- Start your test on a weekend.
- Run your test over a holiday, unless seeking holiday-specific data.
- Run your test for longer than a month, unless absolutely necessary to achieve accurate data.
Onsite tools and strategies are essential to successful Conversion Rate Optimization.
The tools and strategies that we’ll cover in this section will help you build out your own toolkit, as we provide tips, tricks and top picks ahead.
Visitor segmentation is a marketing strategy wherein subgroups of a target audience are identified, and more personalized, tailored variations of content are delivered to each subgroup.
Much like A/B testing, visitor segmentation shows certain site visitors one variation of content while showing others a different variation.
This allows the marketer to create hyper-focused and personalized content for all users.
To learn the best performing visitor segmentation strategy for all levels of your marketing funnel, check out Justuno’s Ultimate Visitor Segmentation Strategy.
Primary Ways To Segment An Audience
Demographic – Demographics refer to surface level characteristics of an audience. Examples include:
- Income level
- Social Class
- Political party
Demographics are a very common and effective strategy for segmenting an audience, as many patterns can be seen between the demographic and buyer behavior.
For example, when marketing the latest and greatest smartphone, we may want to take age and income level into consideration.
On the other hand, you may not want to show a product to an audience at all. For instance, if you were marketing food that goes against a certain religion.
Income and social class may also indicate a certain purchasing power. When marketing an expensive product like a new car, segmenting by these demographics is a must.
Psychographic – Psychographics refer to the more subtle characteristics of your audience. Examples include:
Considering the fact that purchase decisions are 20% logical and 80% emotional, aiming your marketing campaign at your audience’s emotion can be an extremely effective strategy.
Creating different versions of pages, promotions and off-site content are a great way to personally appeal to different audiences by psychographic metrics.
For a deeper look into visitor segmentation as well as the tools to perform these strategies, check out Justuno’s Visitor Segmentation Tools.
Radius targeting is a very focused geo targeting method wherein you can set a radius from your store via your Google My Business account. When (potential) customers enter this radius, your advertising bid increases to win that traffic.
Radius targeting can be a very successful strategy, as you are only spending heavily on customers who are already close to your store.
Creating custom content for a certain location is a great way to create a hyper-focused marketing campaign.
The goal in running geo-targeting campaigns is to become locally relevant and it can be a very effective way to deliver more personalized content to your visitors, especially if you are selling a product.
Because the climate and topography of every location will impact that audience’s lifestyle, hobbies, etc. It is important to tailor your content to resonate with each individual audience.
For instance, diving gear may be a tough sell for people in Colorado, while snowboarding gear may be a tough sell in Florida.
To learn more about how to successfully implement geo-targeting in your conversion rate optimization strategy, check out Justuno’s Geotargeting Guide.
Upselling & Cross-selling
There are two basic options when it comes to implementing Upsell / Cross-sell promotions with Justuno.
The first is to use basic targeting rules available on all plans. The second is to AI powered features, exclusive to Justuno Plus.
The basic parameters include cart contents, cart total, previously visited URLs, etc. On the other hand, AI powered tools use much more in-depth parameters such as onsite behavior, purchase history, etc.
We will be covering AI powered features and targeting in the section ahead titled “AI Powered Product Recommendation Engine”.
Either of these tools make implementing Upsell / Cross-sell promotions easy. Used in tandem, these strategies can be incredibly effective for conversion rate optimization.
Take a closer look at Justuno’s Upsell / Cross-sell tools with this brief course overview.
Spin-to-win’s and other gamification marketing strategies are an enticing and fun way to increase conversions on your site.
These light but highly engaging pop-ups provide unique engagement as well as a better brand experience while offering some kind of discount or promotion.
In fact, spin-to-win promotions command a 13% Average Opt-In Rate. That makes gamification one of the easiest and most effective ways to increase your conversion rate.
Check out Justuno’s Gamification Tools to get a sense of how to implement and optimize these tools.
Email / Lead Capture
Most text messages are opened within three minutes of receipt. SMS marketing allows you to send subscribers highly personalized messages to promote engagement and drive visitors back to your site.
These personalized text messages are often automated, making SMS marketing an effortless marketing channel that converts!
Why Email Capture?
Building a solid email list can mean the difference between steady conversions and stagnation. After all, it is one of the highest performing marketing channels to date.
You may be wondering, especially if your website sells a product and collecting lead information seems unnecessary, why bother?
The fact of the matter is that about 70% of your website visitors that leave without purchasing will never come back. This is why it’s so important to build a curated email list with valuable content delivery to nurture the relationship.
Well-curated email lists delivering valuable content not only fosters trust and credibility with your brand, but also converts a percentage of email recipients into paying customers.
How to build an email list
The simplest and most effective way to do such a thing is to offer something that’s WORTH their email address. This helps establish trust and warms them up to your brand by giving them a reason to opt-in with the information.
Improve your opt-in rates using valuable offers for first-time visitors that help remove barriers to purchase. Some of the most effective offers are: free shipping, a discount promotion, and lead magnet (downloadable).
Of course some promotions are going to entice people more than others, but that is going to depend on your particular audience.
Feel free to check out Justuno’s email/lead capture solutions and learn how to create a journey, not a touchpoint.
What is an exit offer pop-up?
An exit pop-up is the last-ditch effort to prevent abandoned carts and visitors from leaving your website.
When a visitor motions towards the close browser “X” button, or motions toward another tab, the popup detects this exiting behavior and will fire.
This pop-up often contains some sort of promotion or discount code in an attempt to entice the visitor to stay and finish their purchase.
Why is an exit offer pop-up important?
Exit offer pop-ups are important because they effectively lower bounce rates and abandoned carts.
A well-designed and properly implemented exit pop-up can make a massive difference in your conversion rate as well as your bounce rate.
It’s incredibly easy to create an effective exit offer pop-up with Justuno. Check out our Exit Offers & Abandoned Cart Offers page to learn more.
Tip: Lower bounce rates have a very positive effect on search engine optimization (SEO) and will be a factor when Google ranks your pages in search results.
Countdown timer promotions are designed to create a sense of urgency for the customer and increase same-session conversions.
These types of promotions work great to instill a sense of FOMO (Fear Of Missing Out), and urge your users to commit.
This strategy combined with others, specifically the exit offer strategy, can be a very powerful tool to boost your conversion rate.
Furthermore, using these strategies over Black Friday / Cyber Monday can have a massive effect. For example, Justuno users saw an average 8.6% engagement rate on countdown timers throughout the year.
Over the Black Friday / Cyber Monday period, the engagement rate jumped to 14%, converting 22.67% of those visitors into customers.
AI Powered Product Recommendation Engine
Commerce AI, a core feature of Justuno Plus, is a powerful product recommendation engine designed to create intelligent upselling and cross-selling opportunities based on your inventory and customer behavior.
By taking into account billions of data points plus your store inventory and website visitor analytics, our powerful engine creates intelligent promotions to encourage high Average Order Values (AOV) and increase conversion rates.
Plus, these recommendations appear native to your site allowing you to inject them anywhere in the shopping journey.
Learn more about Justuno Plus and our AI Powered Product Recommendation Engine by checking out our Justuno Plus page.
Offsite Conversion Marketing Campaigns
Offsite efforts to increase your conversion rate are incredibly important and should not be overlooked.
With these two strategies below you will be able to capitalize on both website visitors who abandoned your site previously, as well as visitors who are subscribed to your newsletter.
Lead nurturing focuses on building a trusting relationship with your potential customers until they are ready to commit to your company.
Essentially, this relationship is built on the value that you provide to the customer. Many lead nurture programs include building a strong email list, wherein those leads would consistently receive emails full of valuable content and/or some sort of proposition or offer.
Strategies like this one can also be automated. Automating your lead nurture process can lead to a very good Return On Investment (ROI) as it takes much less time and effort to create a content channel that converts.
To learn more about how to automate your email marketing and lead nurture process, check out Hubspot’s Guide to Automated Emails.
What is retargeting?
According to Mailchimp, 97% of people who visit your site for the first time leave without buying anything. Retargeting campaigns are how you capitalize on that massive potential customer base.
Retargeting campaigns often use the Google Display Network to display ads to visitors who have previously visited your site.
These visitors will start to see your ads across the internet as they are reading an article, watching a video, or just browsing the web.
A successful retargeting campaign can result in a massive increase in conversions. In fact, retargeting campaigns have proven to increase conversions by almost 150% in some industries.
Why does retargeting work?
Retargeting ads work so well for a variety of reasons. One key reason is that retargeted visitors are on average 8 times cheaper to reach per click.
That means your investment is lower while trying to reach customers who already know who you are.
Additionally, because those visitors were likely in the market for your product or service when they visited your site, they are likely still in the market for that product or service.
Advertising to only this group of people typically means a much higher average conversion rate.
At this point, you should have some resources and hopefully some ideas of how to increase your conversion rate.
These strategies are all very efficient and important to maximizing the revenue that your website brings in.
Using these strategies in conjunction with each other as a part of a larger marketing strategy will give you the best chance of reaching the highest possible conversion rate for your site.
By leveraging Justuno’s tools, conversion rate optimization becomes a sleek, efficient process that constantly improves your website’s performance.