The A to Z of Conversion Rate Optimization

by | Nov 2 2021

RevLifter explains everything you need to know about boosting your eCommerce conversion rate by 30% or more.

One of the most important focus areas for marketing and eCommerce leaders is conversion rate optimization.

Every merchant wants to increase the number of people that transact on their site and within their apps. Driving more traffic to sites is one key way that brands do this. But often even more important are their efforts to convert a greater proportion of the shoppers visiting their site.

This handy online guide from RevLifter will outline:

Basics of Conversion Rate Optimization

What is a conversion rate (CVR or CR)?
What is conversion rate optimization?
What are typical conversion rates?

How Does CRO Impact ROI?

Why Brands Don’t Invest More in CRO
The CRO enhancement model
Identifying the relevant metrics

Testing Tools

Getting Beyond the Foundational CRO Approaches with Personalization

Personalization vs ‘Personalization’

Strategic Personalization for Increasing Conversions

Personalized Deals as a Conversion Rate Optimization Strategy

Personalized deals solutions to maximize CRO
The foundation: hyper-personalized deals platform
Hyper-personalized deals pages and CRO

Impact of Personalized Deals on CRO

BASICS OF CONVERSION RATE OPTIMIZATION

If you are completely new to conversion rate optimization, the next sections will provide an essential foundation.

What is a conversion rate (CVR or CR)?

Your conversion rate is a simple calculation of the percentage of people who visit your site and complete a desired action.

For most B2C brands, the desired action is a purchase, so therefore for the rest of this guide we will assume that is our goal. If you are looking for an examination of CVR for non-commerce sites, this Hubspot post provides a good foundation.

Conversion rate is calculated by dividing the number of transactions by the total traffic over a specific period.

This simple calculation unlocks a great deal of insight into the health of your eCommerce site. If you want a more granular, step-by-step on calculating your conversion rate, this Moz blogpost is a good place to turn.

What is conversion rate optimization?

Conversion rate optimization is the process of increasing the percentage of your site or app visitors (traffic) that make a transaction.

Using conversion optimization, you can analyze and optimize every aspect of your website and the various landing pages to ensure it drives the maximum number of conversions.

CRO is a process of continuously improving your conversion rate by testing new elements, content, or structures on your site and implementing those that help deliver more conversions.

While most marketing activities are focused on driving more traffic, CRO is focused on improving the site’s performance against the traffic you already have.

What are typical conversion rates?

Based on our research, large brands with sales over $25 million that aren’t using personalization can expect a conversion rate between 2-4%.

Smaller sites generally see conversion rates on the lower end of that range. But comparing your own performance to a benchmark to identify a ‘good’ conversion rate is often misleading. Here’s why:

  • Conversion rates vary based on maturity of personalization efforts: Nowadays, eCommerce sites with personalized customer experiences – e.g those with personalized deals and offers, delivered by RevLifter – show much higher conversion rates.
  • Rates of conversion vary significantly by traffic source and landing page: If you get a lot of search traffic on your site, your conversion rate should be higher than if your primary vehicles for traffic are email and display advertising. Social traffic conversion rates vary widely by category.
  • Conversion rates differ based on device: Sites with more mobile traffic usually see lower conversion rates. Historically, mobile browsing has been more associated with research-focused user behavior.
  • Social proof has an impact: Sites that make positive ratings and reviews easily accessible often have much higher conversion rates.
  • Conversion and website optimization are often impacted by brand awareness/familiarity: In most cases, brands that are better known see higher conversion rates.
  • Results vary by country: Germany, the US, Britain and Australia often see much higher conversion rates than other countries. One common trait of these markets is their offering of multiple forms of payment.

As you can see, serving up a list of benchmarks for conversion rates is fraught with problems. The only comparison you should care about is your website visitor conversion rate at present, versus a past period.

Our advice is to think about how to optimize your user experience, not whether your users have a slightly better or worse experience than on competing sites.

If you’ve been investing in CRO for some time, your conversion rates are probably much higher than average. If you haven’t, the only way is up.

HOW DOES CRO IMPACT ROI?

An improvement in conversion rate makes every dollar invested in your business more efficient. This is a key reason why conversion tracking is so vital to your long-term success.

Your acquisition spend will work harder, your retention and CRM efforts will be more efficient, and your PPC and SEO will become more effective. In short, you will have a better marketing funnel from top to bottom.

What’s interesting is that many of the most effective approaches to conversion rate optimization are inexpensive. The costs of cleaning up product pages, improving CPAs, and offering better content, for example, are relatively low when compared to their potential impact on revenue and profit.

For example, a 10% improvement in conversion rate makes your current acquisition spend 10% more effective.

WHY BRANDS DON’T INVEST MORE IN CRO

This is the $64,000 question. A couple of years ago, eConsultancy reported that in the digital marketing industry, the ratio of customer acquisition to CRO spend was 92:1. While that has likely improved over the past several years, it’s clear that much of the industry has scope to increase their CRO investments. The case for investment in CRO is strong, but many brands don’t support CRO with sufficient budget. Instead, they continue to pour more and more money into traffic and customer acquisition. In our experience, there are several reasons for this:

  1. Lack of awareness in the importance of CRO or how to invest: It’s an understandable concern, but the basic principle of getting more people to convert, and the key means to do this, should be apparent to more companies.
  2. The concern that CRO will be difficult to measure: This is not true. It is generally quite easy to measure conversion rates as a whole and for different streams of traffic.
  3. The perception that CRO will take a long time to achieve results: Leaders may worry that the fruits of CRO take a long time to realize. The reality is that you can start seeing measurable improvements within a few days or weeks.
  4. Greater familiarity with traffic-driving tactics and benefits: This is true but fixing the customer flow needs to be a greater focus for marketers going forward.
  5. Unclear why CRO isn’t ‘everybody’s job’ as opposed to something requiring significant focus: Ideas can come from anywhere, but without staff or an agency which is responsible, it’s easy for key projects to get delayed or forgotten.
  6. Reluctance to deal with the tech team: Because CRO sometimes involves making changes to a site, people avoid the projects. This is extremely short-sighted, and companies would do well to create greater collaboration between their teams for marketing and eCommerce and their technical staff.

An analysis of posting on the topic across the web also revealed a lingering fear that it might make the existing eCommerce team ‘look bad’. Leaders need to take a more enlightened approach to evaluating staff here, because improvement is what matters most.

Just to hammer this point home, CX agency CXL conducted a study of over 400 CRO leaders in which they asked what the highest barriers were to more effective CRO. Process gaps and a lack of senior management understanding and buy-in topped the list.

THE CRO ENHANCEMENT MODEL

A big part of being successful at conversion optimization is down to the process by which you test and implement it. There are lots of models out there, but most focus on these five stages:

  • Analyze: Understand the performance of your current site and landing pages to see where you lose customers. You’re looking to pinpoint their strengths and weaknesses.
  • Hypothesize: Prioritize your opportunities and formulate hypotheses for testing.
  • Test: Conduct A/B split testing or multi-cell testing to determine if your hypotheses result in greater conversions.
  • Read Results: Analyze the results and determine the winning characteristic
  • Implement: Implement the winning change (if any) and repeat the process.

Naturally, brands will likely have many ideas to test, and it’s important to have a testing methodology that enables you to pinpoint which site adjustment resulted in a performance change.

Most companies leverage third-party testing and optimization platforms to simplify the process of conversion rate optimization to ensure genuine, valid results. While there are a handful of companies that implement CRO manually and via internal resources, most companies lack the dev resources to make such an approach efficient.

IDENTIFYING THE RELEVANT METRICS

Direct-response marketing terms were generally the first companies to focus on CRO, which makes sense because performance improvements have an immediate and direct impact on results for these businesses.

In the early days of the internet, many companies focused on a single metric like conversion rates or revenue as they evaluated CRO concepts and ideas.

Since then, CRO has gotten much more sophisticated due to brands understanding the interplay of content and stimuli. If you are a direct-response marketer, that’s something that is very important to consider.

As you think through your optimizations, consider both the total value of transactions and the transaction count. That way you will understand the full impact of your changes.

TESTING TOOLS

CRO evaluation and testing tools come in many forms and run the gamut from qualitative to highly qualitative methodologies. Many of the most informative tools are software packages that you already leverage, like Google Analytics.

The key here is to determine which tool provides genuine and rich user insight. Not all conversion rate optimization tools are specific to this task.

Here are a few examples:

1. Traffic insights

In order to understand the value that your site must deliver to your user base, you need to understand what motivates the user to visit a website in the first place.

Understanding the sources of your traffic is an extremely important element of CRO. For example, the channels that drive traffic (natural search, paid search, referral, direct, advertising, social, etc.) likely attract different types of visitors, who want different types of information.

Individuals in the market for what you sell have very different informational needs than people that are only vaguely aware of the options for solving their problems.

2. Behavior insights

This refers to what people do when they arrive on your website – how they progress through your conversion funnel. What do they look at, how do they interact with content? What paths seem to boost engagement, and what paths drive abandonment?

In addition to traffic insights from platforms like Google Analytics, many brands leverage offerings like heatmaps to better understand customer behavior. Usability testing is a valuable component here.

3. Testing tools

The category encompasses offerings that enable you to test potential new approaches to existing approaches. For example, an A/B testing platform could be used to change the shape or color of a CTA button to determine its impact on conversions.

Some tools offer binary (A/B) testing methodologies while others enable you to simultaneously field a host of tests at once and determine the impact of each potential change on results.

Generally, these multivariate testing solutions require much higher levels of traffic than do A/B testing platforms.

4. Survey tools

Many brands leverage online surveys to ask visitors about their customer experience, either during or immediately after their site visit.

While marketing surveys hold the potential for sample and other forms of bias, they provide a truly rich source of insight into customer perceptions that is difficult or impossible to determine from A/B or passive tracking analysis.

Testing tools can tell you what happens, survey tools tell you why.

5. Qualitative

In-person and online 1-1s and user focus groups are further resources for customer feedback, opinions and perceptions. The most successful CRO teams employ multiple types of solutions to get the best results.

GETTING BEYOND THE FOUNDATIONAL CRO APPROACHES WITH PERSONALIZATION

We hope we’ve established the importance of CRO, at least to the point where you’d be happy to devote sufficient resources to its development. We are big believers in the principle that:

1. There are always new ideas and approaches to test
2. Testing and optimization should be a continuous commitment
3. Static CRO informed by genuine analysis and systematic planning will ‘pay out’ for most companies forever

Yet, one of the most interesting aspects of CRO management is that many companies separate it from the management of promotional tools and tactics that are often the strongest drivers of conversions.

For retailers, promotions are almost universally the best way to drive incremental conversions and revenue for a brand. Further, growing evidence indicates that taking a truly personalized approach to promotions maximizes performance.

Deals drive growth. Personalized deals drive maximum growth. And strategically designed personalized deals drive maximum profit as well.

PERSONALIZATION VS ‘PERSONALIZATION’

For the last several years, personalization has been one of the most discussed topics among marketers, and for good reason. Dozens of studies show that personalized information, offers, and experiences increase conversion rates, AOV, acquisition and more.

One of the most commonly cited is from McKinsey, which projected the five-year impact of personalization on the B2C economy to be worth at least $1.7 trillion.

McKinsey also reports that personalized experiences yield 20% higher customer satisfaction rates and 10-15% higher CVRs. They also confirmed that personalization creates a competitive advantage because only a specific brand can build personalized experiences using its first-party data.

Unfortunately, because of all this discussion and buzz, many solution providers now use the term personalization very loosely. For many of these companies, any form of audience segmentation counts as personalization.

For example, lots of online personalization offerings segment site or app traffic into a few large behavioral buckets, based on one or a very small number of user characteristics. When we say personalization, we mean genuine, 1-2-1 marketing and messaging where elements of content and offers are individually tailored throughout the user experience.

For example, the RevLifter platform uses hundreds of first-party data points to develop a profile and messaging journey for each user. Some of the most valuable types of user experience data we use include:

Customer data: New versus existing.

Purchase data: Past purchases, average transaction sizes, category interests, brand preferences, deal sensitivity, deal type preferences.

Shopping data: Basket contents, basket value, basket margin, products in a basket, most/least expensive products in the cart, items added and removed from cart.

Visitation data: Traffic source, time on site, dwell times, visited/not visited content, most viewed categories, most viewed brands.

Abandonment data: Exit intent, Hover top left/right, mouse inactivity/dwell time.

Session data: Location, device type, browser, date, time of day, language.

Part of the process is analysis, but a great deal of the value comes from predictive modeling and machine learning to validate and optimize the models.

Although our preference would be to have the industry adopt a more truthful definition of personalization than any broad form of segmentation, we recognize the vendor appeal of blur here.

For this reason, we often use the term hyper-personalization to describe our 1-2-1 approach.

STRATEGIC PERSONALIZATION FOR INCREASING CONVERSIONS

The term “hyper-personalized offers” refers to bespoke incentives developed on a 1-2-1 basis for every shopper. These are created in a goals-focused process:

  • Identify retailer conversion goal: Setting objectives and targets around metrics like CVR, AOV, margin, and acquisition creates a purposeful incentivization strategy with strict parameters around who does and doesn’t receive a deal. By understanding retailer goals and guidelines, we can define how to make the most of every interaction.
  • Analyzing each shopper: Deals can be served on a wide range of data points – think cart contents, browsing activity, past purchases, site and page visitation. Even third-party signals like the weather can be used to optimize offers and drive customer appeal while meeting our targets.
  • Deliver across the customer journey/sales funnel: Delivering offers at ideal moments of opportunity throughout the customer journey helps to achieve maximum coverage and, in turn, maximum impact.

With these three key steps, we can deliver highly effective personalized deals and offers that consistently drive better conversion rates. Every offer is customized to fit each customer, but business rules ensure that it is also profitable and drives incremental revenue for our eCommerce site.

PERSONALIZED DEALS AS A CONVERSION RATE OPTIMIZATION STRATEGY

Many of the approaches used to increase conversion rates can be described as tactics.

Personalized deals actually qualify as a strategy because the individual messages presented to each customer are all part of a single program that leverages advanced technology – including AI – to choose the best message for each user.

When running these types of campaigns, RevLifter doesn’t test the effectiveness of a single tactic against everyone. Rather, we assess the overall strategy of 1-2-1 deals and messaging at an individual level.

Every deal is also automatically designed to reflect and achieve a retailer’s unique goals. Some of the most common examples of these goals include:

  • Improving customer acquisition
  • Reactivating lapsed users
  • Boosting conversions/conversion rates
  • Increasing average order values (AOV)
  • Up-selling to larger purchases
  • Cross-selling other categories

With hyper-personalization and deals, you can tailor offers to deliver against these goals, and leverage your rich 1-2-1 customer insights to produce 1-2-1 offers governed by both customer characteristics and your bespoke rules.

Personalized deals solutions to maximize CRO

At RevLifter, we focus primarily on solutions that impact site traffic. Our goal is to maximize the value of every site visitor through the power of personalized deals and offers. We have developed specific solutions that:

  • Capture direct traffic from promotion-seeking and potential customer sources, driving and retaining more of these individuals on your site.
  • Actively prevent cart abandonment before it occurs, or drive users back to the site on those occasions when it does occur.
  • Enable brands to connect with their site visitors at ideal moments of opportunity throughout the on-site visit. These touchpoints can occur anywhere on a site, in places like:
  • Site search results
  • Category pages
  • Product pages
  • Shopping cart
  • Educational pages
  • And more…

The foundation: hyper-personalized deals platform

As with other key initiatives, like marketing automation, any personalization needs a platform to power the targeting and messaging development.

For example, the RevLifter Platform is the foundation for all the personalized deals and messages in a RevLifter program to impact a conversion funnel.

The platform analyzes hundreds of data points about each customer in real time. It then triangulates that information with client goals and profit requirements to formulate deals and identify ideal moments to present them.

AI and advanced machine learning are the final pieces – their analysis helping to make every deal intelligent across the customer journey.

Using data points like gender, products in cart, and the local weather, you can further tailor your shopping experience at a 1-2-1 level, at significant scale. This in turn drives major increases in CVR, AOV, and more. Here are some points worth factoring into your personalized deal strategy:

Abandonment data

  • Exit intent
  • Type in URL bar
  • Hover top left
  • Mouse inactivity
  • Predictive intent

Session data

  • Location
  • Weather
  • Browser
  • Device
  • Day
  • Time of day
  • Browser language

Customer data

  • New/returning customer
  • Logged in

Cart data

  • Cart total
  • Product name
  • Least/most expensive item in cart
  • Item(s) on sale
  • Value by brand/product category
  • Customer segment
  • Added/removed from cart

Site data

  • Has/has not visited page X
  • Inbound traffic source (e.g., paid search, SEO, social media)
  • Time on site
  • No. of visits to site in past set period
  • Most viewed category

Hyper-personalized deals pages and CRO

Now let’s look at a typical solution and how it can have a marked impact on your CRO efforts.

RevLifter’s RevPage product creates 1-2-1 hyper-personalized deals pages for anyone searching for a deal or discount from your brand. RevPage deploys highly effective SEO and PPC strategies to divert deal-seeking traffic away from competitors and coupon sites, to an on-site deals page you control.

For brands that cannot host such a page, it’s possible to launch a hosted offering with the same credibility as an on-site offering, but with easier deployment.

RevPages are developed by internal RevLifter resources using your design guidelines, ensuring a fully branded, controlled, native experience for users.

The main benefit? Instead of visiting a coupon site full of broken links, competitive hijacking attempts, and expired or fraudulent offers, they get a series of personalized deals that are curated and developed to appeal specifically to them.

Often, because these deals can be so carefully controlled, their cost per acquisition is far lower than through a ‘blanket discount’ program available to everyone.

RevPages also help recapture traffic from site visitors that add items to the cart and then leave your site on the hunt for offers. Again, the combination of on-site location and powerful SEO and PPC programs ensures that your RevPage is a top result for brand name + deal searches on Google.

RevPages are also proven to have a strong impact on conversion rates by optimizing every stage of the conversion funnel, but we’ll discuss that more in just a moment.

On-site hyper-personalized deals experiences

Personalized deals are most effective when they are incorporated across the customer journey. For example, RevLifter’s RevConvert solution presents personalized deals and content to users as they browse your site shopping.

These attractive, native units can be delivered in overlays, in-line ads, and in offerings exclusive to RevLifter that enrich the site experience.

RevConvert units come in many forms and formats, including:

Stretch and save

Customers are offered discounts if they add more to their cart to hit a revenue threshold.

Countdown clocks

Time limits dial up the urgency of capitalizing on an incentive, encouraging more people to make a purchase.

Cross-selling and upselling

You can grow AOV by recommending products that complement whatever is in the customer’s cart.

Exit-intent offers

Stop cart abandonments before it happens with personalized deals that keep shoppers on your site.

Reveal your offer

Give customers a VIP experience by delivering personalized incentives without resorting to ‘those’ annoying pop-ups.

Behavioral triggers

Monitor customer behavior and combat low engagement with special incentives that drive the conversion.

Ctrl-C offers

Spawn a personalized offer when the shopper tries to open a new window to compare prices elsewhere.

Error-code offers

RevLifter’s error-code offers can trigger when someone inputs an invalid offer code. Here, a friendly message aims to remedy the situation by providing a small incentive to convert their sale.

Here’s an example of the type of message they could receive:

Impact of Personalized Deals on CRO

Hyper-personalization maximizes the business value of your on-site traffic by delivering more precise messaging to each user. It leverages the power of all of your unique customer data – not just one or a few points.

By examining the results of hyper-personalized deals across 100+ retailers in EMEA and other regions, our data shows an average conversion boost of 30% compared to “blanket” one-size-fits-all discount.

These types of deals also deliver an average of +20% AOV versus against site benchmarks.

Figures like these can make even the most aggressive growth goals far more attainable.

Integrating personalized offers into your own CRO Plan

The most effective CRO efforts are led and managed by a dedicated team of CRO experts who analyze and optimize site elements based on a triaged plan.

They examine the current performance of the site and formulate ideas on how to enhance the customer flow. Usually, they then conduct tests that compare current performance against one or more potential changes and enhancements.

If the enhancement leads to a higher conversion rate, it is implemented, and the team returns to analysis to identify the next tactic to improve the site conversion rate.

While some brands assign CRO to an individual who is also responsible for other marketing efforts, the most effective businesses utilize dedicated resources either in-house, via a CRO agency, or through conversion rate optimization services.

The key is to entrust your strategy with an individual who is adept at identifying the tool or tools required for identifying the richest possible CRO insights. As you move ahead with CRO programs, remember that personalized offers and deals are a powerful CRO strategy you can deploy immediately as a fully managed service with immediate impact on conversion rates, revenue and profitability.

It is an outstanding and highly efficient way to ensure the optimum monetization of all your website traffic. We hope this page has both helped to demystify CRO and revealed some of the many ways that personalized deals and incentives are powering extraordinary growth for leading retailers.

Ultimately CRO is a major opportunity that cannot be addressed by any single tool or approach, but we hope you’ve got some ideas to take away. You can test and deploy hyper-personalized deals and incentives with no risk at RevLifter, where:

  • You can be up and running in 2-4 weeks
  • You only pay on performance (CPA)
  • There are no set-up costs
  • There is no complex implementation
  • We offer a fully managed service
  • There are no long-term commitments

RevLifter is the pioneer in true 1-2-1 deals and offers personalization and continues to lead the industry with new innovations like turnkey AI product recommendations.

In the past three years, we have received more than 20 eCommerce awards for both our performance and focus on continuous optimization. Conversion optimization is about continuous improvement, and is never entirely complete.

If you would like additional information on hyper-personalized incentives, RevLifter, or any of the products and solutions outlined above, please get in touch.

Visit Revlifter.com

Request a demo

Email us at grow@revlifter.com

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