Is it more important to get new customers or to keep the ones you have? All sales and marketing leaders face this challenge, and too many respond with a shrug and a promise to "just do both." But a shrug and a promise isn’t a plan.
Both are undoubtably hard, and many factors conspire to make that answer highly situational. The fact is, acquisition and retention are equally important and at times, elusive. Being great at both acquisition and retention marketing have one thing in common — optimizing conversion rates at every step of the customer experience makes a real difference to business performance.
Conversion rate optimization, or CRO, is a process by which companies lift their conversion rate through incremental improvements. You’ll frequently hear CRO referenced in terms of a website, but this practice applies across channels. A strong CRO strategy leads to better leads, higher revenues and lower customer acquisition costs.
According to the latest data from McKinsey, digital-only users have increased 20% for industries worldwide. That digital penetration creates an imperative for businesses: optimize your experience to engage, delight and ultimately convert. For many businesses, that means 2022 will bring an increased investment in conversion rate optimization, a software market already expected to grow 9.6% by 2026
With competition and digital adoption at its highest, companies cannot afford to underdeliver on consumer expectations. Indeed, McKinsey advises that companies respond boldly, and the bolder the strategy, the better. Companies that “go bold” see the largest returns, thanks to fine-tuned conversion rate optimization. The more they learn from their testing data, and use it to iterate and improve, the better they can attract leads and convert customers.
So take a cue from McKinsey. Go bold. Use these four tips to guide your CRO strategy in 2022.
Create a CRO Framework: Drive Continuous Improvements Through Iteration
Successful conversion rate optimization requires a thoughtful approach. Start by benchmarking where you are. Gather the average conversion rate data for your key focus areas, inclusive of key website pages and critical campaigns.
Next, set your key performance indicators. Globally, ecommerce conversion rates hover around 2% to 3%. Beyond conversion rate, consider your goals for traffic, conversions and net new customers or leads. Bounce rate, or knowing when people drop out of the funnel, is another important metric to track.
Then, define your strategy for improving these KPIs. What areas of your site will you focus on improving? How will you implement experiments and apply the learnings? What tactics can you test (e.g. lead flows, landing pages, CTAs)?
Finally, diligently return to that data, your benchmarks, and your strategy to see what’s working and drive insights and inspiration for new experiments.
Related Article: How Conversion Rate Optimization Improves Online Sales
Move the Needle: Run Tests and Experiments to See What Works
Experimentation is the heart of conversion rate optimization. A simple example of CRO is A/B testing, or split testing, allowing you to test two versions against one another, where just one element is different. The version with the better conversion rates is deemed the winner.
Multivariate testing is more sophisticated, and allows you to compare two versions with several different elements, such as different combinations of header images and lead form length. Multivariate testing helps you understand which combination is most effective, and how each individual element contributes either positively or negatively to conversion impact.
Good candidates for testing include lead flow styles and lengths, CTA button design and copy, and landing page layout and design. Beyond design, you can also test different content across the user journey or audience segments, to see what kind of messaging and format is most persuasive to your various user personas.
With a digital experience platform, this kind of experimentation takes place on a 1:1 level, combining different tests and variations not only for a single landing page, but throughout each individual customer’s journey, collecting data across channels and increasing their likelihood of conversion in real time.
By testing different aspects of design, audience and delivery, you learn what works best for your audience and goals.
Related Article: Where Testing Fits in Your Omnichannel Experiences
Break Down Silos: Share What You Learn
Like anything else in life, CRO doesn’t thrive in a vacuum. As you experiment, document what you’re testing and the results of each test.
The findings your blog team discovers may have important applications for the team managing your mobile app. For example, through several rounds of testing, your blog team may land on a handful of CTA button variations that work extremely well in terms of copy and design. By sharing those insights, the mobile team can start off with a set of variations more likely to convert, rather than starting from scratch.
Breaking down silos in this way prevents rework and drives efficiencies, enabling your organization to lift conversion rates higher, faster and in more areas. With a centralized hub of knowledge anyone can access, you also sidestep the downfalls of tribal knowledge and prevent future employees from repeating the same tests for the same results.
According to VWO, only one in every seven A/B tests is a winner. Failure is fine — it’s how organizations learn and optimize. Share success and failures to lift conversions across the organization.
Related Article: How to Advance Your DX Testing and Optimization Strategy
Maximize Performance: Apply Learnings Across the Business
It is essential that organizations create an unified optimization strategy that includes a plan for documenting results and disseminating that information organization-wide. Having a separate CRO strategy for each channel or department doesn’t make sense, and it’s too slow for today’s business climate.
That’s not to say that what works for one channel will automatically be the best solution for another channel. However, by applying what works in one channel to another, all channels can start from a place more likely to drive conversions. You can iterate from there to work out the particular tweaks of that channel or audience.
In the above example, the mobile app team can start off using the winning CTA button colors and copy from the blog team. Then, they can add new variations to test against, to ensure those are the best options for app users. If they find something new, they can share that knowledge back with the blog team and others.
Only through a structured approach like this — one that encourages rigorous testing, documentation and sharing — can organizations maximize the potential of conversion rate optimization. And if the past two years have taught us anything, it’s that the organizations that thrive are the ones who move forward aggressively, and learn from what works. Choose to be bold with your CRO strategy in 2022.
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