conversion rate optimization report card

We’ve put together this short guide on frequently asked questions about conversion rate optimization in order to answer some basic questions on our specialty.

What is Conversion Rate Optimization?

“Conversion optimization, or conversion rate optimization, is a system for increasing the percentage of visitors to a website that convert into customers, or more generally, take any desired action on a webpage. It is commonly referred to as CRO,” Wikipedia.

Overall, CRO is about increasing website performance. Since CRO is an umbrella term, a lot of myths have been perpetuated over the years; like CRO is synonymous with A/B testing, or that best practices always work…

But perhaps the best way to describe CRO is comparing it to the scientific method. By studying website visitor behavior, CRO experts able to determine weak areas in sales funnels, and create strategies & hypotheses based on hard data.

How do you calculate conversion rates?

Conversion rates are calculated by simply taking the number of successful conversions, which varies depending on the website’s goal, and dividing it by the number of website visitors or potential conversions.

calculate conversion rate condorly

Alexei Ilinykh

Conversion rate optimization is like working out. The second you stop committing to a plan the more depressed you become. A few days of working out (testing and iterating) leaves you feeling good and healthy. Imagine a few months of working out. The same goes for CRO.

Alexei IlinykhCondorly CTO

What is A/B testing?

A/B testing (sometimes called split testing) simultaneously pits a control version of a website against an experimental form. The experimental page has minor (and singular) changes in design elements such as call to action buttons, headers, color, or copy. A/B testing is different from multivariate testing as it maintains focus on a single element, whereas multivariate testing involves major design changes.

The fundamental goal of A/B (and multivariate) testing is to achieve a higher conversion rate for a website.

What is multivariate testing?

Multivariate testing “is a technique for testing a hypothesis in which multiple variables are modified” Optimizely.  It is most effectively used when you want to determine which is the best combination of variations by testing all possible combinations against one another.

Multivariate testing is most useful when a website has too many conflicting elements, and/or if conversion rates are really low. Although not as popular as A/B testing in the CRO world, multivariate testing can actually drastically improve conversions if applied correctly.

Is it better to perform A/B or multivariate testing?

These two types of testing are really dependent on how bad your website really is. If your website is terrible and not converting any visitors, it’s time to consider multivariate test. Multivariate tests have the advantage in the sense that a complete site redesign might drastically increase conversions compared to waiting around for A/B tests to garner statistical significance.

However, A/B testing is much more reliable; especially when there’s a proper product market fit and plenty of qualified traffic. A/B testing is great because it allows the tester to determine the effects of singular elements.

How much traffic does a website need for A/B testing?

It’s not necessarily about the amount of traffic that matters, but more to do with statistical significance and time. You could conceivably run a test on a low traffic site, but it will take months to get reliable results.

We generally recommend getting the user acquisition engine humming before getting started on a serious conversion rate optimization campaign. The reason for this being that low traffic sites don’t always have enough data points to determine the ideal customer to optimize for. So what’s the point of optimizing the sales funnel for customer you might not even want?

However, there are plenty of ways that you can increase conversions on a low traffic site that aren’t necessarily tied to analytical data.

Peter Brown

In today’s ever changing landscape, you need to be iterating as often as you can to better understand your customers behavior.

Peter BrownCondorly CEOLinkedIn

How do you know what to A/B test?

There are countless elements that you can test on your website. Any client-side element can be tested, ranging from CTAs to images. But the best way to figure out what to test is to look at the data, and ask yourself a series of questions:

  • Who are the lowest converting visitors?
  • Who are the highest?
  • Why is that the case?

Then run a thorough campaign that includes:

  •  Analytics analysis
  • Competitive intelligence
  • Hypothesis generation
  • Sample size calculation
  • Iteration (testing)
  • Analyzing test results
  • Results reporting
  • Repeat

A good rule of thumb is just to always have a hypothesis for a test. Not something silly like, “Hey, let’s make this button orange because that has the highest conversion rate.”

How do you measure a true conversion rate?

Well first, there are different types of conversions. There are hard and soft conversions, e.g. vanity conversions like shares or follows on social media, or hard conversions that lead to revenue. Keeping track of different types of conversions will help you locate where your customers are in the sales funnel.

And there’s also a difference between your average conversion rate and your “true” conversion rate. If you’re just dividing conversions by traffic, it’s not really an indicator of true conversion rate. I’m not saying it’s not worth calculating, but it doesn’t paint the whole picture.

Some suggest only calculating traffic that’s generated from areas that have your target market, and eliminating remaining sources. But we’ve always recommended something a little more granular. For instance, we break down conversions from traffic source, location, OS, device, age, gender, etc. Niche markets require understanding niche conversion rates.

What’s the ROI of Conversion Rate Optimization?

CRO has amazing return on investment. If your user acquisition strategies are driving plenty of traffic to your site, but you’re not meeting your goals, it’s time to start thinking about optimizing your conversion funnel.

It’s especially important to think about today, as there’s a clear trend in digital advertising in which more money is being spent, yet less people are seeing the ads. It’s like throwing money away. Sheer madness.

Perhaps one of the simplest, and clearest, visualizations of ROI comes from Unbounce:

CRO-ROI-condorly

While the chart shows hypothetical figures, it does illustrate similar trends that we have with our clients.

How can heat/scroll maps help with conversion rate optimization?

Heat/scroll maps can show you, in a very simplified way, how users are interacting with your website. They’re great for finding out answers to questions like:

  • What areas are user ignoring?
  • Are distracting elements taking attention away from the main CTA?
  • What areas are users trying to click but can’t?

In many respects, popular websites are often built in the same way, with certain features set in similar areas. When you use heat/scroll maps like Crazyegg or Hotjar, you’re able to deduce where users are typically inclined to click first.

But alongside simplicity, heat/scroll maps are cheap. Businesses large and small have something to gain by using these tools.

How long should you run an A/B test?

The easy answer: Until you’ve reached a statistically significant response.

The more complicated answer: is, well, a little bit more complicated.

In order to get a truly splendid answer, I recommend reading the response from Ronny Kohavi on Quora.com. Deciding the length of an A/B test should be based on so many more values than just p. Sample size may be important, but if it doesn’t reflect your entire user base, your test results may be inaccurate and misleading.

What are the best A/B and multivariate testing tools available?

We’re big fans of Optimizely for A/B testing and Personalization, but there are CRO tools available for every budget and every need.

Feel free to check out this short guide on CRO tools to make your decision.

How can live chat help increase conversions?

Studies show that live chat is a great option to increase customer trust, decrease impatience, and increase conversions.

Analysis shows that:

  • 90% of customers consider live chat helpful
  • 63% were more likely to return to a website that offers live chat
  • 62% reported being more likely to purchase from the site again
  • 38% of respondents said they had made their purchase due to the chat session itself

The same analysis shows that people who shop online at least once a week tend amplify these sentiments.

What are the best case studies for conversion rate optimization?

The best case studies available are the ones that you can use to draw real conclusions that are actionable for your business. A great blog post from DigitalMarketer.com breaks down their process for determining the value/validity of a case study. Readers should ask:

  • Is the sample size available?
  • What’s the lift percentage?
  • Are the numbers of raw conversions published?
  • Is the conversion metric listed?
  • Is the confidence rate published?
  • Is there a test procedure? What is it?
  • Is the conclusion justified by data or just hyperbole?
  • What was the test timeline?

Without these very specific evaluation metrics, the conclusions that the case study seem to make could be “too good to be true.” And it often is…

In addition to the questions above, readers should also keep an eye out for studies that seem counterintuitive. Sometimes micro copy changes, or removal of certain elements can increase conversions significantly.

Is personalization a likely outcome of CRO?

Personalization is a likely outcome of the internet in general, and not necessarily tied to conversion rate optimization. Many people expect it. In fact, 77% of digital natives expect a personalized experience.

In response, large companies like Netflix and Amazon knowingly prioritize personalization implementation, “We know that if you don’t capture a member’s attention within 90 seconds, he or she will likely lose interest and move on to another activity,” says Nick Nelson, Netflix’s global manager for creative services, according to a report from Fastcompany.com.

Another large trend in personalization is the rise of AI. While some aren’t too impressed with things like Amazon’s Echo, and others go into further detail about the barriers to full blown personalization on the web, the fact is that AI and personalization aren’t going away anytime soon. It will be interesting to see how integrated our lives might become with personalization software and hardware.

What is the biggest challenge to implementing CRO?

The biggest challenge to successfully implementing CRO is not having a solid strategy. Without a well thought out process, businesses are effectively cutting the efficacy of their CRO efforts in half.   Due to the fact that CRO isn’t directly about customer acquisition, it’s often put on the backburner. And most companies don’t even have a dedicated CRO budget! This means CRO is often an afterthought, when it should be in the limelight for well-established marketing teams.

Other problems include:

  • Lack of budget: It’s fairly expensive to set up and hire a full internal conversion rate optimization team- not to mention the hiring process in itself is extremely time consuming.
  • Lack of intelligence: This doesn’t have to do with smarts, but rather wits. Figuring out what to test, and further iterations, requires a deep dive into analytics alongside holistic approaches. Understanding the CRO process is more than just looking at case studies, and picking random elements to test.
  • HiPPOs: Because the field is fairly new, not all marketers understand the true value that testing brings to the table. And sometimes HiPPOs can get in the way of progress.

How does site speed affect conversion rates?

Loading time is obviously a crucial part of user experience, and user experience has a dramatic impact on conversions. According to surveys conducted by Akamai and Gomez.com, around half of all web users expect a site to load in 2 seconds or less. The same group of people also tend to leave the website if it does not load in at least 3 seconds.

A 1-second delay in page load time yields:

  • 11% fewer page views
  • 16% decrease in customer satisfaction
  • 7% loss in conversions

What is the average conversion rate?

If you had to put a number on it, the average conversion rate is around 2.35%.  That being said, asking what the average conversion rate is pretty ambiguous. This ambiguity stems from the fact that you can break conversion rates down by industry, niches, by demographics, and so on. Furthermore, conversion rate data can differ based on device and KPI.

The MarketingSherpa Ecommerce Benchmark Study solves the problem of differing conversion rates in the ecommerce industries by breaking it down by product type.  After surveying 2,885 marketers, they created this chart of 25 retail categories and displayed each one’s average conversion rate:

What they found is that companies that sold more products, like Amazon or Zappos, tend to have higher conversion rates.  Companies that only sold one type of product had an average conversion rate of 16.3% and those that sold multiple products had an average conversion rate of 17.2%.

Wolfgang Digital also conducted an extensive ecommerce study in which they looked at conversion rate by device.  Based on their data, they found that while mobile and tablet accounted for almost half of their website traffic (43%), they only contributed to a quarter of revenue (26%).  This is made especially clear when looking at the average conversion rate based on device:

conversion rate by device condorly

Email marketing is a whole other story. The conversion rate for email marketing is generally between 2% and 12%.  The range is so large because of the varying factors that depend on industry, or whether or not someone opted into the mail-list.

MailChimp put together a great spreadsheet that breaks down open rates, and CTRs amongst 46 industries. They have monthly updates of their email benchmark stats, which offer a great source of comparison if you’re trying to figure out if your email response is up to par.

Let’s face it, cold emailing can be painful. Even the most recognized media outlets like FastCompany.com have trouble with cold email campaigns. Fast Company ran an experiment where they sent out 1,000 emails to busy executives to see how many would respond.  “Out of the 1,000 emails, 293 bounced. Of the remaining 707, 45.5% opened the emails…a terrific open rate for such a busy group.” Even with a fantastic open rate, only 12 out of the 707 people replied.  That is 1.7%.

Let’s delve into ad conversion rates. WordStream compared Facebook ads to Twitter ads by looking at four categories: network reach, ad performance, mobile ad performance, and ad formats. According to their data, the engagement rates for Twitter can be as high as 1-3%, which is much higher than Facebook’s .119% CTR.  The difference is mainly due to the fact that Twitter ads are in-stream whereas Facebook’s ads are often on the side.

This large difference may seem significant when deciding between using Twitter ads and Facebook ads, but looking at average CPM tells a different story.  Twitter’s average CPM is $3.50 compared to Facebook’s $0.59.

 facebook twitter ads condorly

The average conversion rate across all industries for Google Adwords is 2.70% on the search network and 0.89% on the display network. Average conversion rates for Google Adwords changes depending on industry, just like website conversions and email marketing.

Wordstream broke it down into sixteen industries and displayed their average conversion rates in the chart below.        

ecommerce conversion rates condorly

How should you start a conversion rate optimization campaign?

As a Condorly client, you will get a full-service optimization solution for the best results from A/B/n and Multivariate tests – including web analytics, design, copywriting, development, and implementation. We’re experts using Optimizely, and you will always get test results that statistically prove which website or landing page variation gives you maximum conversions.

We suggest you start with getting a free Condorly Conversion Rate Report Card. When you sign up for the Condorly Conversion Rate Report Card, our team of personalization and conversion rate experts will rate and benchmark your site and tell you where you can get quick wins – we’ll reply back within one business day.

Get your free conversion rate report card here.