The Science Behind Conversion Rate Optimization(CRO)

In the world of marketing, businesses are constantly told that they need to focus on conversion rate optimization. But what does this mean? This guide will peek behind the scenes of this common marketing question. You don’t need a degree in marketing to understand conversion rate optimization…just check this guide.

What’s a Conversion Rate?

Essentially, this is the percentage of people who convert after seeing one of your marketing materials. For example, let’s say that 1,000 people see your Facebook ad and 112 people convert. In this example, your conversion rate would be 11.2% because this percentage of people converted after seeing the ad.

To clear up a couple of misconceptions, there is no one conversion rate in the business. Instead, you’ll have a conversion rate for each marketing effort. For example, the conversion rate for a Facebook ad campaign will differ from the conversion rate for an email marketing campaign.

Also, the word ‘conversion’ doesn’t necessarily mean that you’ve made a sale. Instead, it simply refers to the action that you want the user to take. For instance, you might want people to sign up for a newsletter after seeing your ad.

If they sign up for the newsletter, this is a conversion. Therefore, a conversion can include clicks, newsletter sign-ups, sales, and various other actions.

What’s Conversion Rate Optimisation?

Using everything you’ve learned so far, you’ve probably guessed that conversion rate optimization (sometimes shortened to CRO) is the process of improving your conversion rate for a given campaign. In other words, you want to increase the number of people taking specific actions on the campaign.

Since this article is all about the science behind conversion rate optimization, you might not be surprised to hear that some marketers like to use a formula to help with the CRO process. The formula is as follows:

4m + 3v + 2(i-f) - 2a

If you’re looking at your screen with a confused look, the good news is that you don’t need to memorize this formula. Instead, the formula describes the variables that impact conversions. Here are the most important factors:

Motivation (m) - With no motivation, consumers just aren’t going to take an interest in your product. The more you understand the motivations of prospective customers, the more you can appeal to them with the right message.

Value Proposition (v) - What do you offer all customers? Put simply, why should your customers buy your product over the products of competitors? Factors to consider that contribute to the value proposition include credibility, appeal, exclusivity, and clarity.

Incentive (i) - What is the incentive for people to provide their email addresses and other information? For example, you might offer a whitepaper to all those who provide their email addresses.

Friction (f) - While money might play a role in decision-making, there may also be other factors preventing people from converting. If the friction is higher than the incentive, people will click away and save their time.

Anxiety (a) - Finally, we have anxiety and reasons that customers might doubt the credibility and trustworthiness of brands. The more you ask of customers, the more anxious they’re likely to be. Therefore, the incentive needs to be higher to overcome this. If the customer is overly anxious, they won’t convert.

Whether a marketer or a business, your job is to increase motivation, value proposition, and incentive while overcoming friction and anxiety. Here are some tips to finish:

• Understand your audience

• Explain the benefits of your product rather than the features

• Offer a seamless conversion process

• Make sure the incentive outweighs friction

• Address anxiety and make prospective customers feel comfortable with the brand

• Contact King Kong NZ for help