I’ve got a bone to pick about how a lot of people perceive Conversion Rate Optimization (CRO) relative to all of the other marketing gobbledygook they do. What’s inspired me to pick this bone right now? Well, it’s the holidays, with the New Year right around the corner, and I am willing to bet that a lot of these people are hovered over their desks, forehead planted firmly in one hand, tapping their pencils on their college-ruled, recycled, legal pad with the other, in a staring contest with their 2011 marketing budget. And I’d like to set them straight before they do something they will regret. Although there are still a number of people that confuse CRO for SEO (Search Engine Optimization) or Analytics, many of the people I’ve spoken to over the years rightly do recognize that Conversion Rate Optimization is all about making your website better (meaning more action from your visitors), and seemingly understand that this is accomplished by making marketing work more efficiently (meaning more output for the same amount of input). Some of them even get how and why this is fundamentally different from the goal of other marketing efforts. Many even understand that making your website convert better is not just about addressing a speed or platform issue, incorporating the latest design craze, or adding hot technologies like video and chat.
So, if everyone “gets it” when it comes to Conversion Optimization as a method for improving website performance, what exactly is this bone I want to pick? Well, if these incredibly savvy marketers truly recognize all of those things about CRO, why then, when it comes time to decide how to spend their marketing dollars, do so many of them say things like, “I’m trying to decide whether or not I should do CRO or more PPC”? These folks know they want more sales, but when they go looking for a solution, and decide how to spend their budget to achieve that, they are comparing apples to oranges. The evidence is in the countless number of times I’ve heard that comment or one like it, lumping CRO together with SEO, PPC, email campaigns, social media campaigns and other outreach efforts intended to bring people to their site. Why do they do this? Because they just can’t break out of the 20th century belief that selling more is all about reaching more people. They are stuck in a rationale that looks something like this:
Their first mistake occurs at step number 2. While they are right that reaching more people, and getting them into your store (online or otherwise), typically does lead to more sales, that is certainly not the only way to make more sales, and it is not what CRO is about. The goal of CRO may be to generate more sales, but it’s mechanism is not the same as PPC or even SEO: its intent is not to generate more traffic to your store, but to make the things you already do, produce more results.
Unlike other marketing efforts, CRO actually can make your website better. It can make your marketing efforts better too. In fact, CRO doesn’t even make sense unless you have other marketing efforts (at the very least, a website) to optimize. Regardless of the Conversion Rate Optimization system you use, the rationale behind the practice looks more like this:
So now we have an alternative mechanism for increasing sales. This CRO mechanism for increasing sales can actually enhance the results of your traffic generating efforts, generating comparatively exponential results. Let’s say that you currently get 10,000 visitors each month. That traffic produces 300 sales (your conversion rate is a little above average, at 3%). Let’s do a comparison between the sales generated by increases in traffic alone versus the sales generated by those same increases in traffic coupled with CRO efforts that yield 10% increases in your conversion rate each month. Over the course of four months, starting at 10,000 visits in month 1, increasing to 20,000 in month 2, 30,000 in month 3, and holding at 30,000 in the fourth month, here’s what you’ll see:
And what’s more, increasing the effectiveness of your marketing has lasting effects, unlike the traffic approach to increasing sales. If you decide to stop investing time and energy in conversion optimization efforts after you’ve doubled your sales, your sales continue at that doubled rate. Can you say the same for PPC efforts?
The single biggest reason you should not lump CRO in with traffic-generation efforts is because if you have traffic generation efforts, you want to make sure they are working efficiently, driving traffic with a high percentage of action, and getting the most bang for your buck. It’s CRO’s job to make sure that is happening. If you’re putting resources toward other marketing efforts (even just a website), you owe it to yourself to plan CRO into the mix. So do yourself a favor, when you sit down to plan your marketing budget, give CRO it’s own line item, and budget for it accordingly. What marketing efforts are currently competing for a line item in your 2011 budget? Tell us!