What is Conversion Rate Optimisation and why should you adopt it?


An overview

Conversion rate optimisation (also known as conversion optimisation or CRO) is something to get excited about. As of November 2014, the average conversion rate is 2.6% according to Adobe. That is for every 100 users that visit your site only 2.6 convert. Disheartening, right? Well conversion optimisation uses data-driven solutions to increase that figure. As a concept, it moves decision-making from instinct to maths. How this is done can be read all in my approach here.

An example of conversion rate optimisation

Let’s take an example. You’re in the shoe selling business selling a pair of trainers for £100 each. Your average conversion rate is 2.6% which is, by all intent and purposes, a very average conversion rate. This is contextually dependant but in the UK ecommerce industry, taking the average dictated by Adobe, it is very average. And you also get a solid 2,000 visitors per month. This equates to £5,200 revenue per month.

Now lets say we just nudge up that conversion rate by to 3.6%. How we do this is dictated within my approach but it is through making data-driven decision that are conversion affecting. With the same average order value and visitors your monthly revenue increases disproportionately to £7,200 per month.


The other way to bring up this revenue figure is to focus on the number of visits through traffic gaining methods: SEO, PPC, Social Media, Affiliate Marketing etc which is wholly possible, albeit expensive and time consuming. Taking out example above, if we increase our visits by a similar amount (38% increase) we will receive just shy of £7200 revenue figure. There are core differences however.

  • Focus on visitor acquisition requires significant investment over a long period of time
  • There were 15 Google algorithm changes in 2015 according to Moz any of which could affect you
  • With the introduction of new competitors these will ultimately a) affect your rankings and b) steal visitors away from you
  • A focus on visitors concentrates on generating new conversions, not building up relationships with existing ones

Please note: this is just my opinion, a successful company needs to focus on both and a visitor acquisition strategy should wholly be adopted. I’m merely stating my preference for conversion rate optimisation.

 So why conversion rate optimisation?

We’ve established that there are only two ways to grow your business.

  1. Improve your conversion rate
  2. Increase the number of visitors

…but is there a best way? Or should one be done before the other? Or, even, both at the same time? Well, as a conversion rate optimisation consultant, I’m bias but I believe we should be focusing on increasing your conversion rate first for the following reasons.


1. More revenue

By increasing your conversion rate, naturally, you will increase your revenue. Assuming your visitors remain static and your average order value remains the same, your revenue, naturally, will increase.


2. More revenue profit

If you assume that the yellow bar is your cost of sales and your overheads. Now what happens when you’ve got the same amount of visitors but more of these visitors are buying? Sure your cost of sale may go up slightly, but proportionately to your increased revenue. All your costs remain the same, it’s the same situation as before, just this time, you have more profit!


3. Visitors are now worth more

Your cost per acquisition can now be increased because your visitors are worth more to you than they were before. This extra profit can be spent on marketing to increase your visitors. This gives you a significant advantage over your competitors as you are not only earning more profit but now you’re able to pay more to acquire customers.

What’s next?

Now you’re convinced, I’d recommend you read my very methodical process on conversion rate optimisation here.

I’d be more than happy to discuss how this type of approach can be implemented in your business. Talk to me today.