Understanding Conversion Rate Optimization (CRO) basics
Conversion rate is, in general, the ratio of the number of transactions to total traffic. The most popular way to calculate it is: unique buyers/unique visitors.
There are various types of conversions, and it doesn’t always have to mean a purchase. A conversion goal may be defined, for example, as:
- signing up for a free trial
- creating an account
- completing an online application
- downloading a file or software
- signing up for a newsletter
It is worth mentioning the difference between conversion rate and click-through rate (CTR). CTR is the number of users that clicked on a particular ad, divided by the total number of impressions. It measures the success of a particular online campaign, and helps assess users’ reactions to certain content, whether it’s a display add, an email, or a company’s website.
On the other hand, conversion rate is a measure of your sales funnel effectiveness. It shows whether or not you are able to lead your visitors to a desired course of action. According to the 2012 Annual Conversion Rate Optimization Report, based on 900 client-side and agency digital marketers, for every 92 USD spent on attracting visitors, only 1 USD is spent on converting them. At the same time, only one-fifth of companies taking part in the survey were satisfied with their conversion rates.
What is a good conversion rate?
There are many factors that influence the average and desirable conversion rate. Those are, among others:
- type of conversion
- source of traffic
- online marketing campaigns
- competitors’ marketing efforts
- your prices
- payment options
If you are looking for a benchmark, you can easily find data for average conversion rates. Their accuracy and topicality is questionable, but it might be worth taking a look. Let’s start with MarketingSherpa’s 2012 Website Optimization Benchmark Report, which gathers declarative conversion rates by various industries.
The results are as follows:
- Media and publishing – avg. 10% conversion rate
- Professional and financial services – avg. 10% conversion rate
- Education and healthcare – avg. 8% conversion rate
- Software and SAAS – avg. 7% conversion rate
- Technology equipment and hardware – avg. 5% conversion rate
- Manufacturing or packaged goods – avg. 4% conversion rate
- Non-profit – avg. 2% conversion rate
- Retail or e-commerce – avg. 3% conversion rate
Yet the most important insight gained from the report is that whereas the median for conversion rate is 4%, the average is 8%. This means that the range of results achieved by companies is very wide. While many of them only reach low, single-digit numbers, there are some that have spectacular results.
However, don’t focus on nominal digits. As mentioned before, there are so many variables that determine your conversion rate that is seems impossible to come up with one, straight answer or one precise figure. There is, however, another reason why there is no se for that explained fully by www.usereffect.com Let’s look more closely at three alternative scenarios for your website in the example below:
- 100 visitors per day, converting at 5%
- 500 visitors per day, converting at 1%
- 5,000 visitors per day, converting at 1%
The first two options give you a result of five conversions a day. In the meantime, the third, which is a seemingly poor rate of 1%, is equivalent to 50 daily sales! The purpose of this simple example is to show that there is, in fact, no such thing as an objectively satisfactory conversion rate.
Another example is selling luxurious or high-tech products with high price-points compared to FMCG. If you are selling one piece of highly specialised equipment at 10,000 USD, you might target one sale weekly and still make a good profit. There may be no reason for focusing on achieving a high conversion rate. Likewise, if you are reaching the outstanding conversion rate of 10%, but are paying 2 USD per click in PPC, while only making 3 USD profit on one sale, this would not be profitable in the long term.
Instead of focusing on nominal figures, it makes more sense to develop a long-term, profitable plan aimed at sustainable conversions growth. This is what is referred to as “conversion-oriented SEO”.
Conversion Rate Optimization Tips
SEO conversion optimization is based on the idea that it’s not all about improving a website’s search rankings in SERPs. It’s a data-driven approach that focuses on increasing the rate of click-throughs. It involves a deeper analysis of users’ behaviour and psychology. For successful SEO conversion optimization you need to follow certain guidelines, as listed below.
1. Implement a structured approach to conversion improvement and SEO
Conversion-oriented SEO is an on-going, long-term process. This means incorporating an SEO plan into the strategy of the organisation, as opposed making it a tactical target. It involves building SEO into the company structure, fitting conversion rate into employees’ goals, and making them responsible for it. Research has shown that businesses with SEO implemented in their strategy get a larger percentage of high-quality leads from organic search traffic. Moreover, they tend to convert more of those leads.
2. Set your KPIs and conversion goals
Here is a simple example for setting conversion goals as your main KPI conversion goals as your main KPIYour current average number of conversions per day is 10.In order to bring eligible profit, your target number of daily conversions is 15.Your current conversion rate is 2.5%. You can easily work out that your target conversion rate should be 3.7%. In this case, you will need a 33% improvement of your conversion rate.
This basic measurement of 33% in conversion rate improvement needed gives you a view of your situation. It lets you decide what measures to take to reach your goals. For example, if you only need a slight, 2% improvement at this stage, intensifying your marketing efforts might bring the expected results. However, if an increase of 33% is what you need, you may have to introduce radical solutions such as redesigning your website.
3. Identify and target high-converting keywords
Here is a simple example – a comparison of two keywords:
- keyword 1, for which your website displays a high fourth position in SERP. It generates 30 visits a day, and 1 daily conversion
- keyword 2, for which your website displays on ninth position in SERP. It generates 5 visits a day and a daily conversion rate of 0.5
Which keyword is the high-quality one? At first it may seem as though Keyword 1 brings you more conversions. However, the conversion rate for Keyword 2 is 10%, whereas for Keyword 1, it’s 3%. Therefore, Keyword 2 attracts high-quality organic search traffic. Users who type in Keyword 2 are statistically more potentially interested in your company and your offer. Perhaps it would be more effective to target Keyword 2?
Below is a simplified process of how to keep track of high-converting keywords how to keep track of high-converting keywords
- As frequently as possible, search for the top non-branded keywords that bring organic search traffic and conversions to your website
- Stay up to date with your rank position on those keywords
- Get to know the search volume for these keywords
- Analyse and search for opportunities to optimise the keywords
Keeping track of all this data constantly is essential for staying competitive and growing your business. At the same time, it is time consuming, and uses resources. Experience and know-how is required to complete the analysis with proper and useful insights. The smart solution is to make use of an SEO and online marketing cloud-based application, such as ColibriTool. Colibri analyses the quality of keywords and their relationship to generated traffic and – more importantly – conversions. It goes even further by showing not only how well you are ranking for valuable keywords in SERPs, but also how high your competition is ranking. Moreover, ColibriTool suggests similar keywords that can bring traffic and conversions to your site. After integrating Colibri with Google Analytics, you can measure your conversion goals, identify sources of customers and leads, and assess your online marketing efforts. You will find all the data in one place, presented to you in a clear, readable way, with the use of self-explanatory charts and graphs. This makes your conversion-oriented SEO activities easier to plan and control.
4. Optimize your page or article
Review its architecture and functionality to ensure a best-in-class user experience. This also means eliminating technical issues such as long loading time or browser-specific bugs. An obvious method to use here is A/B testing, which remains the most popular way of increasing conversions. You can A/B-test anything from headlines and call to actions, to logotype and colours used.
Moreover, always make sure to make sure to analyse your website in terms of such factors as:
- time spent on website
- bounce rate
- number of pages visited
- order of pages visited
- cart abandonment
This will give you an overview of the path your potential customer is following and whether or not it is in accordance with your intentions. Also, it will reveal “black holes” in your sales funnel where you are losing some of your potential clients.
5. Don’t forget the clients segmentation process
Conversion optimisation implies a growing importance of client segmentation. To know what triggers your sales, you must be willing to take a deeper look at what determines user behaviour. Only then will you be able to optimise your viewers’ experiences with you. Segmenting your target customers may be based on various factors, such as demographics, benefits, usage, lifestyle or occasion. Distinguishing segments ensures two undeniable advantages. For one, it allows you to develop a separate marketing strategy for each segment. Segments with bigger business potential can become your priority target without alienating other users – you can adjust your marketing strategy to the existing market. Secondly, you are able to identify promising niches that might drive your businesses’ future growth.
6. Conversion-oriented link building
Using inbound links as an SEO tactic can not only improve your ranking in SERPs, but also serve as a conversions improver.