Today, most marketing teams are focused on driving traffic toward websites in hopes that this traffic then converts into qualified leads for sales reps to close. But that's only half the battle.
Getting more out of existing traffic and leads (versus entirely new traffic) can propel companies toward long-term, sustainable growth. That's where conversion rate optimization (CRO) comes in. In this guide, you'll learn about the power of CRO, why your business should focus on improving your conversion rate, and how to get started.
Conversion Rate Optimization
Conversion rate optimization, or CRO, is the process of enhancing your website to increase the number of leads you generate. CRO is achieved through content enhancements, split testing, and workflow improvements. Conversion rate optimization results in highly-qualified leads, increased revenue, and lower acquisition costs.
What is a conversion rate?
A conversion rate is the percentage of visitors who complete a desired action, like completing a web form, signing up for a service, or purchasing a product.
A high conversion rate means your website is well-designed, formatted effectively, and appealing to your target audience. A low conversion rate could be the result of a variety of factors related to either website performance or design. Slow load times, a broken form, or copy that doesn’t convey the value of the offer are common reasons for a poor conversion rate.
What is a good conversion rate?
A "good" conversion rate depends on your industry, niche, goals, traffic channel, and audience demographics, among other factors. For example, the average conversion rate of ecommerce sites globally was 2.17% in the third quarter of 2020, which was down from 2.37% the previous year. The ecommerce conversion rate in the US was higher, however, at 2.57%.
The average not only differs by year and by country — it also differs by niche. For example, the average conversion rate of ecommerce sites in the food and beverage sector is 5.5% whereas the average in the hair care sector is 3.5%.
If your conversion rate is lower than you'd like — maybe it's below average in your industry, or lower than your top competitors, or simply underperforming against your own goals — then it's time to optimize.
Conversions can happen all over your website: on your homepage, pricing page, blog, landing pages, and more. To maximize the potential of converting website visitors into paying customers, you should optimize each location.
Before we take a look at the benefits of CRO, let's walk through how to calculate your site's conversion rate. That way, you'll have a better understanding of how much time and resources to invest in a CRO strategy.
How to Calculate Conversion Rate
Conversion rate is calculated by dividing the number of conversions by the number of visitors and multiplying that number by 100 to get a percentage.
As long as you know how you're defining a conversion, then calculating your conversion rate is easy. You just plug in two values and multiply by 100.
Let's say you're defining a conversion as a newsletter opt-in, and you have an opt-in form on every single page of your website. In that case, you'd divide the total number of newsletter form submissions by the total number of website visitors and multiply it by 100. So if you had 500 submissions and 20,000 visitors last quarter, then your conversion rate would be 2.5%.
You can repeat this process for every conversion opportunity on your site. Just make sure to only count the number of visitors on the webpages where the offer is listed. For example, if you want to calculate the conversion rate of your ebook offer, then you'd divide the total number of downloads by the number of people who visited webpages where the ebook offer is listed.
Alternatively, you can calculate your website's overall conversion rate by dividing the total number of conversions for every conversion opportunity on your site by the total number of visitors on your site.
Where to Implement a CRO Strategy
Here are four areas of your website that have the potential to largely benefit from conversion rate optimization.
Homepages are prime candidates for CRO. In addition to making a first impression on visitors, the homepage is also an opportunity to retain those visitors and guide them further into your website.
You can do this by emphasizing links to product information, offering a free signup button, or even incorporating a chatbot that solicits questions from visitors at any point during their browsing experience.
2. Pricing Page
A website's pricing page can be the make-or-break point for many website visitors. CRO can help a pricing page convert visitors into customers by modifying the pricing intervals (e.g. price-per-year vs. price-per-month), describing the product features associated with each price, including a phone number for visitors to call for a price quote, or adding a simple pop-up form.
Hotjar, for example, added a simple email opt-in popup form on its pricing page and got over 400 new leads in just three weeks.
A blog is a massive conversion opportunity for a website. In addition to publishing thoughtful and helpful content about your industry, a blog can use CRO to convert readers into leads.
This process often includes adding calls-to-action (CTA) throughout an article or inviting readers to learn more about a topic by submitting their email address in exchange for an ebook or industry report.
4. Landing Pages
Since landing pages are inherently designed for people to take an action, it makes sense that they have the highest average conversion rate of all signup forms at 24%. An event landing page, for example, can be optimized with a video of last year's event to encourage visitors to register this year. A landing page that's offering a free resource can be optimized with preview content from that resource to encourage visitors to download it.
Now that you know where you can optimize for conversions, you may be wondering how you know when your business is ready to start the process.
The short answer: CRO is important for any business online. That's because, no matter how established or large your company is, you want to convert your website visitors into qualified leads, customers, and brand advocates — and you want to do so in the most effective, impactful, and reliable way.
With conversion rate optimization, you'll get more out of your existing website traffic while ensuring you're targeting qualified leads.
Although this is a straightforward concept, setting a conversion goal isn't as easy as saying, "This page converted 50 people this month, so we want to convert 100 people next month."
Featured resource: 8-Week Conversion Rate Optimization Planner
You don't just want 50 more conversions from a webpage. Instead, you want 50 more conversions for every X amount of people who visit it. (This is your conversion rate — the percentage of people who convert on your website based on how many people have touched it).
To provide a better understanding of where you stand at any point in time in regards to conversion rate, here are three commonly-used formulas your business can use to understand, analyze, and improve.
CRO Calculation 1: Conversion Rate
As we mentioned earlier, to calculate conversion rate, you must divide your number of conversions (or leads generated) by your number of visitors (or web traffic), and then multiply that number by 100 to get the percentage.
Leads Generated ÷ Website Traffic x 100 = Conversion Rate %
CRO Calculation 2: Number of Net New Customers
To calculate your number of net new customers, you'll want to divide your net revenue goal by your average sales price.
New Revenue Goal ÷ Average Sales Price = Number of New Customers
CRO Calculation 3: Lead Goal
And lastly, to calculate your lead goal, take your number of new customers and divide it by your lead-to-customer close rate (which is your total number of leads divided by total number of customers) percentage.
Number of New Customers ÷ Lead-to-Customer Close Rate % = Lead Goal
Here's an example of these formulas in action:
If your website has 10,000 visitors per month that generate 100 leads — and subsequently, 10 customers each month — the website visitor-to-lead conversion rate would be 1%.
What if you wanted to generate 20 customers each month?
You could try to get 20,000 visitors to your website and hope that the quality of your traffic doesn't decrease — although, that's a risk you'll likely want to avoid. Rather, you could obtain more leads from your existing traffic by optimizing your conversion rate. This is less risky and is more likely to produce better results for your bottom line.
For instance, if you increase your conversion rate from 1% to 2%, you'd double your leads and your customers. The following table is proof of this — you can see the positive impact that results from increasing your website's conversion rate:
Monthly Site Traffic
Notice the drastic increases in the number of leads generated and net new customers when you boost your conversion rate.
Not only that, but it's clear that generating more website traffic isn't necessarily the right approach when trying to improve your conversion rate — in fact, this chart shows you that you can grow your business substantially without increasing traffic at all.
Hard to believe? Think about this way: Pretend you were trying to fill up a leaky bucket. If you pour more water into the bucket, you won't fix the root cause of the issue — instead, you'll end up with a lot of water that's wasted (not to mention, a bucket that will never fill up all the way).
Are you ready to take the first steps toward CRO at your company? Review the strategies below and start experimenting.
Conversion Rate Optimization Strategies
Here are some applicable conversion rate optimization marketing strategies to test and implement at your company.
1. Create text-based CTAs within blog posts.
While it's considered a best practice to include CTAs in a blog post, they sometimes fail to entice visitors to take your desired course of action. Why?
Banner blindness is a real phenomenon related to people becoming accustomed to ignoring banner-like information on websites. This lack of attention coupled with the fact site visitors don't always read all the way to the bottom of a blog post (rather, they "snack” on content), means a different approach is required.
That's where the text-based CTA comes in handy. Here at HubSpot, we ran a test with text-based CTAs — a standalone line of text linked to a landing page and styled as an H3 or an H4 — to see if they would convert more traffic into leads than regular CTAs located at the bottom of a web page.
In HubSpot's limited test of 10 blog posts, regular end-of-post banner CTAs contributed an average of just 6% of leads that the blog posts generated, whereas up to 93% of a post's leads came from the anchor-text CTA alone.
2. Add lead flows on your blog.
A lead flow is another conversion rate optimization element you can include on your site. Lead flows are high-converting pop-ups designed to attract attention and offer value.
You can select from a slide-in box, drop-down banner, or pop-up box, depending on your offer. We experimented with the slide-in box on the HubSpot Blog back in 2016 and it achieved a 192% higher clickthrough rate and 27% more submissions than a regular CTA at the bottom of a blog post.
3. Run tests on your landing pages.
Landing pages are an important part of the modern marketer's toolkit and, as mentioned earlier, integral to conversion rate optimization.
That's because a landing page is where a website visitor becomes a lead or an existing lead engages more deeply with your brand. To optimize a landing page, run A/B tests to identify your best design and content features for audience members.
For instance, with A/B testing you can quickly and easily test different versions of your website copy, content offers, images, form questions, and web pages to determine what your target audience and leads respond to best.
Thanks to A/B testing, China Expat Health was able to increase their lead conversion rate by 79%. One of the most impactful changes was swapping out the headline “Health Insurance in China” for “Save Up to 32% on Your Health Insurance in China,” which immediately conveyed a value proposition to visitors. This proposition was then supported by customer testimonials.
4. Help leads to immediately become a marketing-qualified lead.
Sometimes visitors want to get right down to business, skip parts of the typical buyer's journey, and immediately speak with a sales rep (rather than be nurtured).
There are specific actions you should encourage these high-intent visitors to complete so they can easily become marketing qualified leads (MQLs) — and they can take action through a combination of thoughtfully designed web pages, compelling and clear copy, and smart CTAs.
For instance, at HubSpot, we discovered that visitors who sign up for product demos convert at higher rates than visitors who sign up for free product trials. So, we optimized our website and conversion paths for people booking demos or meetings with a sales rep.
Admittedly, this depends on your product and sales process, but our best advice is to run a series of tests to find out what generates the most customers. Then, optimize for that process. The key here is to look for ways to remove friction from your sales process.
5. Build workflows to enable your team.
For example, with marketing automation, it's possible to send automatic emails with workflows. Then, leads can book meetings with reps in one click. Meanwhile, reps receive notifications when leads take high-intent actions such as view the pricing page on your website.
Or, if you work in ecommerce, you can send an email to people who abandon their shopping cart as a reminder. According to research from Moosend, abandoned cart emails can be very effective. They have a high open rate of 45%. Of the emails that are opened, 21% are clicked. Half of the people who clicked make a purchase.
Here's an example of an abandoned cart email by the Dollar Shave Club.
6. Add messages to high-converting web pages.
Use live chat software to chat with your website visitors in real-time and offer support and guidance as needed. To increase conversions, add these messaging features to your high-performing web pages — such as your pricing and product pages — so leads get the information they want in real-time.
You can also make your messaging and chat bots action-based. For example, if someone has spent more than a minute on the page, you may want to automatically offer to help and answer any questions they may have (again, a live chat tool, like HubSpot, makes this easy).
7. Optimize high-performing blog posts.
Again, publishing blog articles opens the door to a big opportunity for conversions. Even more so if you already have existing blog content on your site — in fact, at HubSpot, the majority of our monthly blog views and leads come from posts published over a month ago.
To get started optimizing your blog content, identify your posts with the highest levels of web traffic but low conversion rates. (Possible causes of this issue may be related to SEO, the content offer you are promoting, or your CTA.)
In one instance, we at HubSpot added an inbound press release template offer to a blog post about press releases — as a result, we saw conversions for that post increase by 240%.
Additionally, look at your blog posts with high conversion rates. You want to drive more qualified website traffic to those posts and you can do so by optimizing the content for the search engine results page (SERP) or updating it as needed to ensure it's fresh and relevant.
8. Leverage retargeting to re-engage website visitors.
It doesn't matter what your key conversion metric is: The cold, hard truth is that most people on your website don't take the action you want them to. By leveraging retargeting on Facebook and other platforms, you can re-engage people who left your website.
Retargeting works by tracking visitors to your website and serving them online ads as they visit other sites around the web. This is particularly impactful when you retarget people who visited your highest-converting web pages.
The normal inbound rules still apply here — you need well-crafted copy, engaging visuals, and a compelling offer for retargeting to work.
Take United's retargeting campaign for example. Using insights from previous ad campaigns, United focused on reaching people who had viewed their ads and were already considering booking a vacation. To this select audience, they promoted a 15-second video ending in a call-to-action.
If viewers felt inspired enough to book their vacation, all they had to do was click on the CTA to be taken straight to the United website. This proved to be a huge success. In just one month, 52% of conversions attributed to YouTube were click-through conversions directly from the ad.
(If you're a HubSpot customer, take a look at how the AdRoll integration can improve your conversion efforts.)
Now, let's talk about how you can get started with CRO at your company.
How to Get Started with Conversion Rate Optimization (CRO)
Maybe you're wondering, "Where do I start with CRO?”
Enter: PIE framework. Before starting a CRO project, prioritize your efforts by ranking each element on Potential, Importance, and Ease.
Use the PIE framework to answer the following questions for every strategy outlined in the previous section. Then, assign a score between one and 10 (one being the lowest and 10 being the highest) to each strategy.
- How much total improvement can this project offer?
- How valuable will this improvement be?
- How complicated or difficult will it be to implement this improvement?
Once you've assigned a score for each strategy, add up the numbers and divide the total by three — this gives a score that shows what project will have the greatest impact. Then, work on the projects with the highest scores first.
The PIE framework isn't perfect, but it's easy to understand, systematic, and offers a starting point for CRO collaboration and communication among colleagues.
We've covered a lot about conversion rate optimization, but not everything. If you still have questions, then check out the answers to some of the most frequently asked questions below.
What is the purpose of a conversion rate optimization?
The purpose of conversion rate optimization (CRO) is to improve the likelihood of visitors taking a desired action on a webpage.
What is a CRO strategy?
A CRO strategy is designed to convert more of your visitors into paying customers. While each CRO strategy will vary company by company, the general steps will not. You have to identify key metrics and your target audience. Then you have to collect user feedback and other data to decide what you’re going to test. Finally, you’ll run A/B tests to improve different pages and parts of your site for conversion.
What are CRO tools?
CRO tools are designed to simplify or automate the process of optimizing your conversion rate. They might help with lead capture, research, analytics, mouse tracking and heat maps, feedback, or running experiments.
What is a CRO test?
A CRO test involves adding, re-arranging, and redesigning elements on your website in order to maximize your conversions. Different CRO tests might focus on optimizing the copy, design, or placement of your CTAs, or the length of your headlines, among other elements.
Begin Using CRO
There are many best practices out there when it comes to CRO but, ultimately, you need to find out what your customers respond to, and what drives results for your business.
Keep these three follow-up actions in mind when getting started with CRO today:
- Use the three formulas to start the CRO conversation.
- Experiment with CRO strategies to discover what works for your business.
- Leverage the PIE framework to help prioritize your strategy.
Editor's note: This post was originally published in January 2019 and has been updated for comprehensiveness.
Originally published Dec 30, 2021 7:00:00 AM, updated December 30 2021
Topics:Conversion Rate Optimization