E-commerce conversion rate optimization – what is CRO?
What is e-commerce conversion rate optimization (CRO)?
Conversion optimization in online stores means the work of turning more visitors into buyers.
Put differently, CRO squeezes more sales out of the traffic to your online store.
How do you calculate e-commerce conversion rate?
The formula for e-commerce conversion rate (CR):
CR = number of buyers / number of visitors x 100%.
Example: if 10,000 people visited your store and 100 of them bought, your conversion rate is 1%.
What does e-commerce conversion rate optimization involve?
Conversion rate optimization is a cyclical process.
What does the CRO process look like?
- Running research and analysis to find the conversion killers in the store. Put differently, the first step is identifying the problems lowering your sales. A significant problem in your store might be, say, a high order abandonment rate. During the analysis you might see that a lot of potential customers leave the site at the order step where they have to log in or register. That could be caused by there being no option to order as a guest.
- Designing solutions (hypotheses) – once you know where the problem lies and what specifically may be lowering conversion, it’s time to design solutions that will lift your sales. Sticking with our example, we form the hypothesis: “adding guest checkout will lift conversion”. It’s worth presenting the designed changes visually, as a wireframe.
- Running tests – the next step is checking whether the change you designed has a positive effect on conversion rate and sales. In our example we’d create an A/B test directing half the traffic to the current order page and half to the version where we added guest checkout. Now we wait until we’ve gathered enough data to find out whether the change affected the conversion rate positively.
- Shipping the winning variant. If it turns out the version of the page with guest checkout sells better, we ship it to the store.
- Repeat the cycle.
Note!
If your store has an obvious bug (one of the buttons doesn’t work, say), there’s no point running tests. In that case you can go straight to implementation. When your store has low traffic and few transactions (fewer than 500-800 orders a month), we also recommend shipping changes right away. In that case tests can take a very long time to produce a winner. So if there’s a strong chance a change could lift your sales immediately, there’s no reason to wait.
Read also: An online store redesign – is it a good idea?
Why does e-commerce conversion rate optimization matter?
If you work in e-commerce, you know perfectly well that acquiring traffic is expensive and getting more so.
But growing traffic isn’t the only way to grow sales.
A far cheaper, more effective route is conversion optimization, which is about turning visitors into buyers.
The better your store converts traffic into sales, the more profitable your business becomes.
That’s how you grow sales without spending more on ads.
What are the benefits of conversion rate optimization in online stores?
- You grow revenue
- You improve ROAS (return on marketing spend) – every zloty spent on ads brings more profit
- Your store becomes more credible and more intuitive
- The content in your store becomes clearer and more appealing to your customers
How do you get started with e-commerce conversion rate optimization?
To run conversion rate optimization properly, you need to:
- understand your customers thoroughly – what they need, what matters to them, what worries them and so on
- run a Google Analytics analysis, or use a similar tool,
- run a thorough analysis of your store and verify:
- Is the messaging in your store clear, do you speak in terms of benefits, and do you stand out from the competition;
- How credible is your store. If prospective customers don’t trust your site, they won’t buy;
- Is the purchase path intuitive;
- Does the store meet customer expectations and fit their needs;
- Are there distractors in the store;
- Are you using mechanisms that create urgency and motivation to buy.
- run a form analysis,
- analyze click maps and scroll maps (using Hotjar, for instance),
- analyze user session recordings (using Hotjar, for instance),
- run user testing,
- analyze live chat messages and the most frequently asked questions,
- run optimization tests (using Google Optimize or VWO)
- analyze the test results,
- bring in developers to ship the changes, or make them yourself.
Sounds complicated?
CRO isn’t nearly as frightening as it might seem.
We’d be glad to tell you how you can get started with conversion rate optimization and begin turning visitors into buyers more effectively today. Book a free consultation.
