With SEO and Performance Media representing the majority of our client engagements, we can safely say that we at Reef know a thing or two about traffic acquisition. Our clients reach out to us because they need help identifying where their potential customers are online, and how to attract them to their website.
I’d like to say we’re pretty good at doing so (in a humble way!), but turning those visitors into prospects, customers or clients can present a very different challenge. From my observations, many digital agencies focus on generating clicks but avoid addressing – perhaps intentionally – what happens to these visitors post-click. At Reef, we’ve always focused on traffic quality vs quantity, because ultimately, everyone investing in traffic is more interested in the leads and sales it generates.
We’ve talked a lot about checking and measuring relevancy and traffic quality in the past, so today I thought I would focus on the second part of what makes an advertising campaign really effective: traffic conversion.
Running SEM campaigns or any paid acquisition channel without CRO is a bit like trying to push a square block through a circular hole; it doesn’t make any sense.
Saying “it’s a mistake not to do CRO” is an understatement. It’s a missed opportunity that no serious digital marketer should overlook. (Especially after reading this post!).
So let’s get started, here are a few of the main reasons why you should be adopting a CRO strategy immediately.
1. There is always room for improvement
Unless your online conversion rate is at 100%, there is room for improvement! Conversion rates will vary greatly depending on the industry you are in, your competitive landscape, your marketing mix (value proposition, key selling points, pricing, etc), seasonality, etc, and of course, your website. Marketers have accepted 3% as being a good conversion rate for Ecommerce, 1% for lead generation, etc. but there is no such thing as an industry-standard when it comes to conversion rate.
Think about it. Even if you have a conversion rate of 5%, this means that 95% of your traffic isn’t converting… 95%!
Realistically, there is surely something you can do to entice people to convert at a higher rate.
2. Traffic quantity is crucial, but it isn’t everything
As mentioned in the introduction, you also need to work on your traffic quality. Are you attracting the right visitors in the first place? It doesn’t matter how much optimisation you make to your website. If the people aren’t interested in your product, they simply won’t buy it. There are many ways to identify your traffic relevance;
- Review your search queries
- Review your average click-through rate (CTR)
- Review your quality scores
As the quality improves, your conversion rate will improve.
3. Acquisition costs are on the rise
Google, Bing, Facebook and other advertising platforms are auction-based. In other words, advertisers bid on specific keywords or audiences, essentially telling the platform that this is how much they are willing to pay for a click. The number of businesses going online continues to grow, and so does competition. It is therefore not a surprise that the more bidders you have wanting to win the auction, the more the bids will increase; much like a housing auction. This competition and the resulting bidding war increases your average cost-per-click (CPC).
4. Marketers spend far more on traffic acquisition than traffic conversion
A few years back, a study had revealed that for every $92 spent on traffic acquisition, only $1 was spent on traffic conversion. This is shocking considering that Conversion Rate Optimisation plays an equally important role in increasing online sales. Note that I could not find a more recent figure which has certainly improved, but would still remain largely unbalanced.
5. As opposed to traffic acquisition, CRO is very affordable
A/B Testing, Multivariate Testing (MVT) and Personalisation tools such as AB Tasty allow marketing teams to implement improvements to their website at a very low investment. Most tools have packages starting at less than $100 per month but will climb up to enterprise-level engagements depending on your volume of monthly visitors and available features. Results generated by these tools far outweigh the investment.
6. Returns are huge!
This is true, especially for large volume websites. To give you an example, we’ve recently run a test for one of our eCommerce clients in the retail space. We made a slight edit to the layout of the product page, highlighting the unique value proposition and key selling points. The incremental increase in the conversion rate has resulted (once extrapolated) in +$250,000 in added revenue over a year. And that’s just one little test! If you improve your conversion rate from 1 to 2%, it doesn’t seem like a big change, but you’ve effectively doubled the effectiveness of your website. Think about that for a minute.
7. CRO benefits all channels, not just Paid traffic
While you may leverage your paid traffic to test your page variations and obtain results sooner, your improved conversion rate will help all channels convert at a higher level, whether they are paid, organic, direct or referral traffic sources.
8. CRO will help you understand what delivers better results
You may want to test various marketing messages, calls-to-action, a different unique value proposition or new key selling points. Whatever you’re testing, you may gain insights on what seems to click better with your audience. Once you’ve learned what they respond better to, you can adopt these changes in your other marketing channels, next promotion or even overall website design.
9. CRO can increase your average order value (AOV)
While increasing your Conversion Rate will lead to a higher Return On Investment (ROI), equal measure should be given to increasing your AOV as it has the same impact on your overall revenue.
There are many techniques used to do this, such as;
- Promoting the high-value products
- Changing the default order to “Price: High to Low”
- Encourage cross/up-selling on your product or checkout pages (e.g. “Users who bought this also bought…”).
10. Increase your profits and re-invest in traffic acquisition
This is how you scale up both sales and revenue. Any added revenue generated from your CRO activity should be re-invested in a) further CRO activity, and b) purchasing more clicks via paid channels. This will have a double-effect on your overall performance with both volume and CPA showing positive signs.
11. Get people to engage more with your website
When doing CRO, marketers tend to focus on the conversion rate as the main success metric, but as seen in point 9, there are other success metrics that need to be followed. Your website Bounce Rate is a reflection of how many people that land on your website leave before visiting a second page. In other words, they’re not browsing around. We occasionally see client websites with bounce rates exceeding 75%. This is a sign that something is wrong with the page. In many cases it’s the User Experience/User Interface (UX/UI) or content related.
When visitors arrive on your website they have both an expectation and intention. Ensuring that you identify what these are and that your website caters for it is key. Analyse your Analytics data and the bounce rate evolution of A/B Tests that you run and you’ll be closer to understanding what gets people to engage more seriously with your website.
Note: Also look at Time on Site (TOS) and the average number of page views per visit as they will deliver similar insights on how engaged people are with your website.
12. Improve your onsite User Experience (UX)
Similarly to the Bounce Rate, people will expect an easy-to-navigate website, clear well-written information in a clean layout, beautiful images and graphics, a good loading speed, mobile-friendliness, and the list goes on. Educate yourself about what makes a great UX for visitors, test your ideas through CRO and observe the results. This will undoubtedly lead to improvements in your conversion rate.
13. Personalise your user experience
Personalisation tools will allow you to display the most relevant messages to the most appropriate audience. This can be done in many ways, For example; promote winter clothing when temperatures drop below 10°c where the user is physically located. Or promote a discount voucher via a pop-in window when the user is about to leave your website (see: “exit intent”).
The above is not an exhaustive list by any means, but it will hopefully help you realise the importance of discussing the opportunity internally. Feel free to throw some more ideas in the comment section below or get in touch with us for more information about how you can leverage CRO to improve your onsite performance.