12 Reasons Why Conversion Rate Optimization Is Important for eCommerce
Conversion rate optimization (CRO) is simply defined as the process of increasing the percentage of conversions from your online store or mobile app. CRO involves idea generation for elements on your online store, which you can improve and then use split and multivariate testing to validate your ideas.
In order to understand the importance of conversion rate optimization, it’s good to know and understand what a typical conversion looks like.
For most ecommerce websites, a typical conversion includes making a sale, users adding items to their wish lists or products to their carts, email signups, social media shares and any other key performance indicator (KPI) you find valuable.
With these in mind, the conversion rate then becomes the percentage of visitors who come to your ecommerce store and complete the desired action, which can be any of your KPIs.
CRO then becomes important in that it allows you to get more value from your users or visitors and lower customer acquisition costs. This way, you can increase the revenue per user or visitor, get more customers and enjoy business growth.
There are many reasons why you need to understand CRO, but the main thing you need to know is how many people accept your offer vis-à-vis those who visit your site.
Many business owners and marketers tend to relegate CRO to the periphery, but it’s the most important activity to apply to their businesses.
This guide covers 12 reasons why conversion rate optimization is important for ecommerce so you can create a better user experience and grow conversions for your site.
CRO helps increase the conversions from your current web traffic without you having to increase your advertising budget just to increase conversion rates.
CRO allows you to grab the free money on the table that you can generate from the same web traffic you get every month on your site. Consequently, CRO decreases the cost of customer acquisition and increases sales and revenue.
As you optimize your conversion rate, you also reduce the cost of customer acquisition and begin to receive free customers without increasing your advertising budget.
The result of all this is that you get more traffic to your site and you have more profit, which gives you a chance to run ads based on your audience, outbid and outgrow the competition.
You create a growth loop when you start investing and applying new CRO strategies to your site, which creates a snowball effect on your traffic, conversions and profits.
In addition, as more ecommerce stores are added to the list, it gets increasingly difficult to compete for customers. Some big retailers seem to be eating away the smaller ones, meaning you need a strategy to beat the competition.
CRO helps you tweak your website and the funnels to make them easier to use for your visitors, thereby getting them to take the actions you want them to, and increasing conversions.
A higher your conversion rate doesn’t translate to increased costs. In fact, your fixed costs and advertising will remain the same as you start optimizing the different elements on your website.
When you remove variable costs like extra units, more workers, extra distribution and others, you get even more money to grow your business.
CRO saves you the money you’d otherwise have spent on PPC ads and/or digital marketing efforts just to get your website optimized. You’ll find that you’re spending less money per customer while making more money.
As you apply more and newer CRO strategies on your ecommerce store, you get to learn even more about your customers and visitors.
You find out things like what they need, what they want, why they come to your site, and other audience behaviors, which form the basis for CRO. Once you test different elements of your site’s functionality, you’ll get feedback from your audience and customers, from which you can deduce what makes them tick.
Once you have a regular stream of website visitors, you want them to convert. You can use several tools to help you with the growth hacking process, which leverages existing assets such as your website traffic to anticipate what users do when they arrive on your site.
One such tool is Google Analytics, which gives you different sets of information including user demographics, devices used, sessions and pageviews among other things. This way, you can know what to optimize on your site to get higher traffic without spending a dime.
They say it’s less expensive to retain an existing customer than it is to acquire a new one. In fact, Harvard Business Review reports that acquiring new customers is anywhere from 5 to 25 times more expensive than it is to retain an existing customer.
This shows how important customer lifetime value is, so you want to spend as little as you can to get more customers, which CRO helps you achieve.
CRO ensures that you can give your customers what they want, position your brand on the market using more effective copy and sharp brand design. You also get to reach the right prospects and enjoy sustainable, repeatable and consistent growth.
Search engine optimization is critical for many businesses today because consumers go online first to find out about your business or product before they decide to buy from you.
If you can’t be found on search engines, it will be hard to get more customers or generate sales and revenues. Focus on optimizing your website’s pages and primary keywords so you can rank higher on search engine results pages (SERPs).
When it comes to business and making profits, you don’t want to leave anything to chance or guesswork.
You want to know for sure that what you’re doing is backed by evidence and that it will work. CRO ensures that you get the hard data about your audience and use it to make better decisions including adjusting different elements on your site for better performance and profitability.
As we’ve already seen, CRO helps you understand your customers and your business better. With the relevant data in hand and the right strategies, you’re able to take calculated risks because you’re more secure about what you can experiment on thanks to the constant traffic stream and increasing revenue. After all, taking risks plays a big role in business success.
By optimizing different elements of your site, you get to increase your conversion rate and improve lead generation results. This allows you to capture more information about your audience and visitors and market to them.
Once you get leads to your ecommerce store, make sure they’re able to get right down to business. This may mean speaking directly with a sales rep depending on your product and sales process.
Encourage high-intent visitors to complete specific actions. This way, they can easily become marketing qualified leads and take action through several thoughtfully designed pages, clear and compelling copy and smart calls to actions.
For instance, if you find that visitors who sign up for free trials convert lower than those who sign up for product demos, you can optimize your site and conversion paths for those booking meetings or demos with a sales rep.
CRO comes with business growth, improved traffic and profitability, which more often than not would encourage you to advertise more so you can gain more.
In particular, social ads are extremely beneficial for ecommerce businesses as they bring more leads, traffic and in turn help you get valuable data you can use to create targeted, paid advertising campaigns and keep the success cycle going.
Plus, pay per click (PPC) is getting costlier over time, even though it can get you high traffic. However, for smaller ecommerce retailers, PPCs are a luxurious entity.
While PPC can help you get attention, it’s becoming less critical as not all clicks convert into sales, which makes CRO even more attractive because you get to build your brand at no extra cost.
PPC isn’t the only cost that’s increasing online. Digital marketing in general, as well as offline marketing like print and television, are set to become more expensive than before.
The main point of marketing is to guide users to your ecommerce store, but if you don’t have the budget for it, CRO is the most affordable and effective way to increase the number of page visitors and conversions while combating the rising cost of digital advertising and marketing.
If you don’t have trust, you won’t be able to make the profits you hope to make. Trust is a result of consistent marketing, as customers learn more about you and what to expect, while you do your best to never let them down.
CRO helps build this trust as you get to know when and how to target your customers with the right offers thanks to already existing data from CRO efforts.
On top of that, CRO helps you optimize your website’s design to make it easier for users to find what they need, or at least quickly figure out how to find it.
This is especially critical because plenty of psychological studies have proven that consumers in the digital age have short attention spans compared to previous generations of consumers.
The faster it is for them to find what they need on your site, the more they’ll come back because of the user experience. Consumers want a site that readily offers them what they want regardless of the price and CRO helps combat this attention span mentality by increasing the chances of getting their attention.
Now that you know why CRO is important to your ecommerce store, here are a few tips to help you get started with optimizing your site for conversions. Keep in mind the credibility, trust and safety of your website to your visitors as you use some or all of these best practices.
- Offer social proof through client testimonials, certifications, awards, media exposure, social shares and industry experts to build trust and credibility
- Improve your site’s speed to make the user experience better and rank better on search engines
- Develop user personas that will help you in content creation and establishing messaging that resonates with the audience’s needs and wants
- Use clear and active calls to action labeled in bright colors to help entice users to click
- Use heatmaps to analyze your customers’ behaviors on your ecommerce store
- Run continuous split testing and make improvements until you have fully optimized pages
- Perform customer journey analyses to identify pages that are key in the conversion process
- Ensure your site looks professional with clean, professionally designed elements and images
Too often, business owners tend to focus on getting minimum viable products into the market as cheaply and quickly as possible. While this is the norm for most lean startups, it’s not necessarily the case for ecommerce stores.
As an ecommerce store owner, you need to create a website experience as part of your revenue maximization efforts, and this requires immediate attention just as you would have done with a physical store.
With a little effort and these CRO best practices, you can materially increase conversions on your website, generate more sales and increase your revenues and profits. At the end of the day, the conversion rate is the only metric that matters so make it count.
Vibhav Gaur plays a key role in empowering Ebzion’s Automobile Aftermarket clients to sustainably grow their online revenues by leveraging technology + digital marketing.
With a strong background in technology and key focus in Automotive marketing he has helped multiple aftermarket OEMs and Retailers make it big online.
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