Conversion Rate Optimization (CRO): The Complete Guide

What is conversion rate optimization (CRO)?

In marketing, conversion rate optimization is the process of improving a website or app to increase the number of visitors that perform an action that results in a conversion. CRO can help businesses understand what persuades or discourages website or app visitors from converting, how to improve performance, and in turn, gain more conversions. CRO can also result in better-qualified leads, reduced acquisition costs and a revenue boost.

What is the importance of conversion rate optimization?

Conversion rate optimization is an essential strategy for a website or mobile app. It can help businesses gain new customers with the same number of visitors, lower customer acquisition cost (CAC) and improve the UX experience to convert new customers.

What is a conversion?

A conversion is when the website or app visitor performs the action that is desired. It can be a purchase or when the person takes action in a conversion point that the business considers important to the customer journey. For instance, a conversion can be a shopper adding items to their cart, a case study download, newsletter sign-up or other predetermined metric.

What is a conversion rate?

A conversion rate is the percentage of users that completed a desired action compared to the total number of visitors. The higher the conversion rate, the better the CRO achieved.

There are different kinds of conversion rate measurement, depending on the objective and type of website or app:

Goal conversion

When a visitor completes an action you are measuring on your website or app, for example product page view goals

E-commerce conversion

When a visitor of a website or app purchases a product on an e-commerce store.

Lead conversion

When a visitor submits their contact information and it is captured on a form.

What is a good conversion rate?

A “good” website conversion rate falls between 2% and 5% across industries and the average is 3%. However, measuring a good conversion rate also depends on your industry, niche, target audience and other factors specific to your business.

Marketing wisdom is that conversion rate industry benchmarks can be helpful, but focusing on your company’s business goals and key metrics will keep you on track for your CRO program.

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Tips on how to set a “good” CRO goal for your business

Use historical conversion rate data

Track your historical conversion rate data, identify your business goals and calculate what your conversion rate goal would need to be to achieve your goals. Find the end goal and track what is “good” CRO accordingly.

Identify CRO goal per number of website visitors (percentage)

Be specific about setting a goal and correlate it with the number of visitors. For example, “Get 100 more conversions for every X number of visitors.” The idea is to improve the user journey to maximize the number of conversions per number of visitors.

How to calculate conversion rates

The method you use to calculate the conversion rate depends on what you’re defining as the conversion and how you measure traffic. Examples include:

User sessions: The length of time a visitor is active on a website or app. Sessions are typically measured in 30 minute increments.

Conversion rate = Total number of conversions ÷ total number of user sessions x 100

Unique visitors: The number of unique individuals who visit one or more web pages or mobile app in a specific time interval, regardless of how many times they request it

Conversion rate = Total number of conversions ÷ total number of unique visitors x 100

Number of leads: The number contact information captures in a specific time interval on a website or app

Conversion rate = Total number of conversions ÷ total number of leads x 100

Here’s a more detailed example using email newsletter sign ups:

If 100 users visit a page and 20 sign up for the newsletter, the conversion rate is 20%.

Benefits of conversion rate optimization: Why is it important?

Below are five key reasons why putting effort into CRO can benefit your business.

Lower customer acquisition costs (CAC)

Increasing conversion rates mean there are more users converting with the same amount of site traffic and your customer acquisition cost decreases. Turning a one-time visitor into a customer means higher ROI on your CRO efforts and building more loyal buyers long term.

Of course, the more conversion roadblocks opened, the more you can lower CAC with new customers going through the sales funnel to purchase and more revenue for the company.

Continually improve UX

The effort you put into CRO also translates into a better user experience on your website or app for everyone. Not only will this lead to more conversions, but a more streamlined, consistent approach to UX overall.

Conducting a CRO audit will proactively identify areas of improvement–from a confusing button, to navigating to the shopping cart or a broken link on a landing page. All of these improvements add up to customer-focused UX.

Positively impact Search Engine Optimization (SEO)

CRO and SEO work better together than they do alone. CRO focuses on high quality, user-friendly content. SEO helps increase traffic, find potential customers, promote visibility for your website and generate backlinks.

There’s key overlap between the two: your search ranking will increase with the number of engaging, high-converting pages. Ultimately, a powerful CRO program, combined with strong SEO can “seal the deal” by converting those visitors into customers and drive sales.

Learn about your audience

Many times, website or app visitors find issues before you’re aware of them. But when you take a proactive approach to understanding user pain points through A/B testing, experimentation, surveys and other methods, you get a more comprehensive picture of who’s interacting with your website and how they’re doing it.

With actionable insights from your CRO efforts, you can gain a deeper understanding of your visitors and better plan for future website changes, email campaigns and other marketing initiatives.

Improve your brand reputation

CRO can also help create a positive perception of your brand. It starts with consistency on design, colors, messaging and other brand elements on each page. Beyond that, improving UX and other functionality creates a better user experience.

Another way your brand benefits is that when a website or app visitor achieves their goals, they build more trust in your company, which can be a powerful differentiator for your brand. And when happy visitors turn into happy customers, they’ll likely spread the word, which means more business for you.

Various cross-industry stats support the importance of conversion rate optimization for websites and apps. For instance:

• Almost 60% of B2B marketers say CRO is the most useful metric for landing page performance

• 70% of marketers who engage in CRO work use the outcome of their experiments to inform other marketing decisions

• Those businesses using CRO tools increased an average ROI of 223%

Who can benefit from CRO?

CRO for e-commerce

The purpose of an e-commerce site is ultimately to convert visitors to a sale. Optimizing conversion points along the customer journey, finding and fixing UX errors and other improvements will help increase purchases and return customers.

CRO for B2B/SaaS companies

Much of SaaS (Software-as-a-Service) sales is based on the experience of other product users. Social proof is one of the main CRO strategies, such as reviews, customer logos, user counts and success stories, along with other website and app elements.

CRO for banks and financial services institutions

When visitors come to a financial-related website or mobile app, they have a specific goal in mind, whether it’s signing up for an account or a customer transferring money. CRO efforts around navigation, ease and trust signals can increase customer loyalty and reduce CAC.

CRO for travel sites

The travel and hospitality customer journey requires a lot of decision-making, which means more opportunities for abandonment if there is confusion or frustration. The most effective CRO efforts focus on improving search, navigation, forms/buttons and showcasing reviews.

How to get started with conversion rate optimization (CRO)

Now that you understand the concept of CRO, it’s time to apply it to your business. It starts with assessing which CRO goals are most important to your company and how those objectives are currently performing.

To get the data you need, you’ll want to identify the various parts of the website or app journey that are integral to your conversion objectives, such as demo requests, sales and all relevant conversion points along the customer journey. Then measure the current performance in those areas.

Set your criteria for what success looks for your CRO program, including the goals you hope to achieve. Determine what your optimal conversion rate would be based on your conversion goals.

Once this data analysis is conducted and documented, you can have a high level of confidence that you’re tracking conversion rate performance against the metrics that matter to your business and that are aligned to your goals.

The foundation of a successful conversion rate optimization program includes these steps:

• Research

• Hypothesis development

• Prioritization

• Testing

• Review results/deploy

Stage 1: Research: Identifying the areas of improvement

This step consists of identifying the areas to improve your website or app’s conversion rate before you invest the time and effort into CRO. The most effective way to do this is to gather both quantitative and qualitative data.

Quantitative data is about the numbers: what can be counted or measured. It is inherently more objective and provides a concise snapshot of various data points about your visitors and site, such as how many visited pages, how many bounced, where they clicked and how long they spend on a page.

Sources include web analytics and product analytics that compare data over time to see patterns, measure CRO performance against benchmarks and provide other functionality. 

Qualitative data focuses on why a visitor took a particular action–the reason behind the quantitative numbers. It differs from quantitative data in that it’s more subjective, provides the narrative background for the numbers and is more descriptive.

This type of data is key to gaining meaningful insights about customer behavior when they interact with your website or app. Examples of qualitative data include session replays and surveys. Heatmaps or interaction maps (interaction maps are the next generation of heatmap tools) combine both quantitative and qualitative data.

One critical area of qualitative data is user research. This can be in the form of interviews, surveys, feedback and other methods to understand a user’s behaviors, motivations and other variables in their website or app experience.

Quantitative and qualitative data analysis have their pros and cons, but they complement each other.

Stage 2: Hypothesis: Creating the optimal concept from your research

Once analytics work is conducted through research, data collection and well-formed ideas about the improvements to make, you can develop a hypothesis drawn from that. In CRO, this means you have an assumption based on an optimized test variant, and informed by deep knowledge of your target audience.

There are two key elements that should be present to make the hypothesis worthwhile for CRO:

1. It proposes a solution to the identified issue.

2. The hypothesis has a prediction of the expected results of the solution.

As a general example, if you want to improve a CTA performance on a landing page that is currently 2%, you would hypothesize that a variation of the landing page with a different CTA will have a better conversion performance of 4%.

A focused conversion hypothesis increases the chances of a correct assumption and success. If the hypothesis ends up being correct, you can likely boost your conversion rate. If it doesn’t, you may need to form a new hypothesis.

Changing [identified problem(s)] into [proposed solutions] will result in [desired outcome].

Stage 3: Prioritization

You’ve done the research, you’ve come up with a number of strong hypotheses to test and now you’ve come to a crossroads of “What should I test first?” To keep your conversion rate optimization program on track requires a solid framework to evaluate this question.

The P.I.E. framework is a well-established method to prioritize CRO efforts by ranking each element by potential, importance and ease. Although it’s not the only method, P.I.E. is systematic, straightforward to understand and offers a good start point for CRO team collaboration. Using this method (or another) for your CRO projects will keep a strong discipline to your program and a roadmap for future testing.

Here’s a break-down of questions and considerations for each step:

• Prioritize: How much improvement can be made to this page? Which pages are the worst performers? This should take into account all of the data you’ve collected and analyzed, along with user scenarios.

• Importance: How valuable is the traffic to this page? Your most important pages have the highest volume and the costliest traffic (note: If your worst-performing pages don’t have high traffic and are costly, they can be eliminated as a testing priority).

• Ease: Determine the difficulty level to implement a test on a page (technical implementation, organizational or political barriers). The less time and resources for the same return, the better. (a home page, for instance, might have many stakeholders and approvals associated with it, so it’s not a good candidate).

1. Assign a score between 1 and 10 (1 being the lowest and 10 being the highest) to each one.

2. After assigning scores, add up the numbers and divide total by 3, which will reveal which project will have the greatest impact.

3. Prioritize the projects with the highest scores first.

Stage 4: The testing phase

Now that you’ve prioritized CRO tests, the next step is to determine the best test type for your CRO project. The most common testing methods are: 

A/B testing

This compares the conversion rates of two versions of a page, showing half to visitors the current version of the page (the ‘control’) and other half the variant page (the ‘treatment’). Comparing which version achieves the CRO metric will help determine which version is more effective.

Typically, the software monitors and records the effect of the changes on your visitors’ behavior and it can also redirect the better-performing page to more people so you maximize impact while the test is running.

Split testing

This method is often used interchangeably with A/B testing, but with one major difference: Split testing has two website pages or mobile app variations competing against each other to see which version gets better results, instead of equally dividing between the control and variation version.

When the split test is launched, your page traffic is randomly spread over the different versions of your variant pages. Each variant’s performance is tracked and analyzed by the split testing software to identify the version that converts the best.

Multivariate testing (MVT)

This type of testing is more complex. Instead of one element changed on the variant, multiple variables are modified. Multivariate testing can determine which combination of those variations performs best out of all possible combinations.

For instance, you could test three versions of a page with different headlines and CTA combinations to see which one gets the most engagement. An added benefit of multivariate tests is that they can eliminate running sequential A/B tests with the same goal.

Testing considerations

You’ll need to determine how much traffic you need, or your sample size, to test before you get results that are statistically significant. Tools like a sample size calculator can help. Likewise, if there’s not enough traffic for your test, you can modify your testing strategy with different tactics to compensate for low numbers.

For the length of the test, it’s recommended at least 1-2 weeks and no more than 8 weeks. The exact timing also depends on what the buying cycle is, how much traffic the site gets, shopping patterns and other variables.

Conversely, some CRO tests are stopped too early, typically caused by peeking. Stopping tests too early can cause you to end up with incorrect assumptions about the final results.

In CRO testing there is also debate about the Frequentist vs. Bayesian approach to statistics. Frequentist relies on using data only from the current experiment (which is what most A/B software uses). The Bayesian approach, however, includes past knowledge of similar testing and experimentation (“prior probability”) and relies on both the former and current testing data to make a conclusion.

Stage 5: Review/analyze/deploy

Once your test has been completed reaching statistical significance and it’s run long enough, now begins the analysis: figuring out which variation(s) won or lost.

There may be more testing work to do, depending on the testing you conducted. If it’s straightforward A/B testing of two variations, you may want to move to development for the live site. However, if you’re running multivariate testing, for example, you may want to test the original control versus the winning variation to analyze the performance for further learnings.

A good “problem” to have is multiple winning variations, but that has the downside of determining which one to pick. This is the time you can re-test in segmentations by mobile versus web, a new visitor versus a customer and other experiments to glean additional insights to inform your decision. This may also lead to incorporating elements from different designs into the final single design as the best experience overall.

Then there are the “loser test variation(s),” which can also provide analytics you hadn’t considered at first glance. For instance, maybe a test drove less traffic but had higher conversions for a CTA you weren’t testing because you were only analyzing traffic and revenue. Perhaps you can use this variation “winner” for future testing or incorporate insights into your final live version.

Once you’ve run tests and identified the UX changes you want, it’s time to collaborate with the development team to implement changes to go live. The challenge? Often times there are a large quantity of other, non-CRO related updates to go live that may be in the backlog.

Communicating across relevant teams to showcase high-impact CRO test results, such as sales conversion improvements, can make the difference between being prioritized in the go-live queue and staying at the end of the list.

Worse yet, sometimes completed CRO tests with review analysis end up sitting in the CRO tool and never move to the implementation phase. This not only detracts from the CRO effort you’ve made, but your business isn’t realizing potential revenue opportunities on the live site.

Finally, remember that research to roll out is never “over.” It's a consistent and systematic approach for continuous improvement to the customer’s digital experience through researching, hypothesizing, testing and deploying in a virtuous circle.

What tools do you need to get started?

Conversion rate optimization tools are an integral part of any successful CRO program. They provide key website and visitor data analysis about how people are using your site and identify areas that need work. CRO tools help to understand why visitors aren’t converting to a lead or buyer, come to conclusions about what changes you should make to increase conversions and test those improvements to optimize for the conversions.

As noted earlier, there are many CRO tools that measure conversion rates, but a combination of quantitative and qualitative data analysis will result in the most meaningful and actionable insights. Quantitative measures key performance data across the website and app. User behavior/interactive ones capture interactions and engagement with a website or app. And testing tools enable an experiment with your CRO changes. Learn more about CRO tools.

Conversion rate optimization best practices

The best place to start your website conversion rate optimization efforts is on your highest-traffic pages, taking advantage of the interest and increasing conversions. Conduct a web traffic audit and assess how your key website pages are performing, such as your homepage, landing page, products, solutions, pricing, blog posts or other areas with high conversion potential.

Conversion best practices can take many forms–from redesigning a page to changing a CTA or removing steps in the sales process. The key is to define a structured, ongoing program to increase your conversion rate in multiple ways on your website or app, using actionable and meaningful insights from your customers.

Improve the customer journey

One of the best places to start your CRO efforts is to fix problems that can be identified, analyzed and corrected along the customer journey. This requires an understanding of where users are engaging, play-by-play interactions and technical errors. Through these digital analytics tools, the user experience is more seamless, making it easier for users to convert.

Ensure consistent brand messaging

Even though it may not come to mind as a CRO strategy, your brand messaging on all pages should be consistent and resonate with your reader in a way they understand. If messaging is confusing, they likely won’t convert.

Automate conversion points

While CTAs often function as the main point of converting, one of the biggest opportunities for CRO is at the shopping cart when it’s abandoned, sometimes caused by purchasing anxiety. Send an automated message to the potential buyer encouraging them to follow through with the purchase.

Embrace mobile shoppers

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Mobile buyers fuel more than half of e-commerce sales, but many app and website users have a poor experience, like slow loading times, crashes and technical glitches. Worse yet, about 25% think less of a brand and will likely move to a competitor–even after one bad experience. Many companies focus CRO efforts on website performance, but should equally focus on growing mobile opportunities. It’s also true that mobile apps are a more complex landscape than websites, with multiple operating systems, versions and other differences.

CRO tools that offer comprehensive mobile app analytics can show where users are struggling including dead taps, tilts and more. You can also track performance analytics for real-time insights and take steps to improve conversions. Proactively monitoring app screens, forms, CTA buttons and other features can help you get ahead of mobile user pain points.

Personalize the shopping experience

A great way to boost CRO is by personalizing the digital buying journey. In fact 80% of consumers are more likely to buy from a brand that offers a personalized experience. The three general types of data to gather are demographic, contextual and behavioral (note: be clear with visitors about what data you’re collecting, how you’re using it and any third party usage.)

With customer data from your martech stack and behavioral insights from a CRO tool, you can trigger personalized offers, dynamic content, customize product recommendations and develop a tailored experience overall. Understanding your shoppers’ needs and responding to them has a direct impact on buying more from your business and being a loyal customer.

Showcase social proof

Social proof is an excellent way to increase conversions on an e-commerce store. Originating from the concept that people are more likely to do something if others are doing it, it’s a proven technique in marketing. A customer speaking your praises is a better messenger than your brand to win trust and credibility that your products or services are worth buying.

Each type of social proof layers more confidence onto the shopping experience, from testimonials to user generated content (USG) to case studies, award logos and more. One of the most powerful social proof techniques is the review. Almost 90% of consumers trust reviews as much as a personal recommendation.

Common CRO mistakes

The foundation for a successful CRO program begins with goals specific to your business and driven by relevant quantitative and qualitative data. Time and resources spent on website/app revisions based on other factors could detract from your efforts to scale a CRO program and continuous development.

For example, getting derailed from a well-formed hypothesis, such as comparing with a competitor (“Let’s change this CTA copy because X company did”), or taking action based on a hunch (“The sales cart field form is old and could use an update”) or reacting to negative feedback from an executive (“I don’t like the font style in the app”).

Here are other common mistakes that can hinder your CRO work, ultimately impacting customer revenue opportunities:

No CRO roadmap

A CRO program relies on a strategy plan based on your objectives and KPIs such as average order value (AOV), Lifetime value (LTV) and other marketing metrics. There also needs to be relevant milestones to drive campaign efforts for next week, six months and beyond.

Focusing only on macro-conversions

It’s easy for companies to get caught up in the big moves like a sale, free trial or demo request, and forgo the importance of the micro-conversions, those steps in-between to get to the purchase. Keeping your eye on the prize is important, but it can also be that optimized form, stronger CTA copy or other improvement that can eventually lead to a sale.

Not tracking guardrail and secondary metrics

One of the biggest testing misses is having a primary metric, without capturing guardrail metrics, also known as “counter metrics” or “health metrics,” which do a cross check on potential impact that can interfere with other business objectives. Likewise, not capturing secondary metrics can mean missing other relevant data insights that could be used for further customer journey improvements.

Ignoring segments of your audience

In testing, sometimes there are surprises in the results, such as one variation is converting well with web visitors but doing poorly with mobile users. Finding out the “why” behind these different testing segments is important and can have big implications for further experimentation and decision-making.