Conversion Rate Optimization - Explained
What is Conversion Rate Optimization?
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Table of ContentsWhat is Conversion Rate Optimization?How does Conversion Rate Optimization Work?Statistical significance Methodology Academic Research on Conversion Rate Optimization
What is Conversion Rate Optimization?
Conversion rate optimization (CRO) is the technique for enhancing the number of guests to a website who then change to become customers on that webpage.
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How does Conversion Rate Optimization Work?
Website optimization came about as a result of the urge of e-commerce traders to enhance the performance of their website during the .com season. As competition grew in the early 2000s, a lot of awareness on the uses of the website was created by those promoting the internet. They also developed ways of improving the user experience during the website usage. In 2004, internet marketers were enabled by new tools to test different content and web designs with a motive of finding out which layouts, offers, and images perform best. This enhancement was realized in 2007 when free Google Website Optimizer was introduced. Nowadays, conversion and optimization are critical components of digital marketing campaigns. A survey carried out amongst internet promoters in 2014 revealed that 59% of participants believed that CRO was critical in their marketing strategy. CRO shares many features with direct response marketing which emphasizes testing, tracking, and continuous improvement. This direct response marketing became popular in the early 20th Century and was supported by the establishment of groups like the Direct Marketing Association in 1917. Direct Response marketers, just like the present day conversation rate optimization also engage in A/B split testing, print campaigns, tracking of response, and testing of the audience to optimize radio and mail.
Marketers normally discover inconsistencies in how customers act when marketers study campaign ads. The response rate in online marketing significantly reduces in terms of segments, offers and from hour to hour. This aspect can be attributed to the challenges people face in distinguishing real effects from chance events. By use of haystack process marketers are restricted to studying and making conclusions from small samples of data. Psychologists (led by Amos Tversky and Daniel Kahneman) have come up with methods to establish why poor decisions are made when dealing with small samples. In addition to this, statistical methods can be used to study huge samples and taming the need to observe trends where none exist. These procedures of optimizing conversion are then applied practically in a real-time environment. The gathering of real-time data and continuous messaging enhances the impact and efficiency of campaigning online. It is never enough to attain results that are statistically sound because those responsible for optimizing conversion should always make sure that the size of their sample explains major variables. For instance, a test may seem to be significant statistically before seasonal aspects (day of the week, time of the day, time of the year) have been considered in the sample data. One distinction may reflect in one season compared to others hence misguiding the outcome. It is also critical to comprehend how different factors influence tests and findings. Various user factors such as device location, type, new vs. returning visitor will react separately to individual variation. Analysis of outcomes without considering various aspects can significantly enhance one segment; or many factors can eliminate bad outcomes for a different segment. For instance, the uplift in the conversion rate of a desktop could result to a reduced conversion rate on telephone equipment. In such a case, it is only the desktop test that should be deemed winning.
Conversion rate optimization focuses on enhancing the number of those who visit websites and what they do there by procedurally testing distinct kinds of a process or page. By doing this, organizations can realize high sales without having to invest a lot of money on website traffic thus enhancing their marketing profits on the investment. The conversion rate is further referred to as the number of newcomers who fulfill an objective as set by the owner of the site. Some testing procedures like A/B testing, allows one to control and tell those contents that change site visitors into real customers. There exist many ways of conversion optimization with two leading major schools of thought taking center stage for the last few years. One school mostly focuses on establishing how best to enhance campaign, website or page conversion levels. The second school gives attention to the pretesting stage of conversion optimization. In this second school, the firm responsible for optimization invests a good time comprehending the target customers and designs specific information that pleases that specific group. After this is when it will come up with testing methods to enhance the rates of conversion.