Commerce Glossary
A comprehensive resource to help you master the language of commerce.
What is Conversion Rate Optimization (CRO)?
Conversion Rate Optimization (CRO) is a highly important component of digital marketing and website optimization. It refers to a systematic process through which online businesses optimize their webpages, digital assets, apps, etc. to enhance their users' experience and to maximize revenue by increasing the probability of an online shopper taking the desired action (in this scenario, named 'conversion').
CRO mainly involves A/B testing, user experience design (UX), content & CTA optimization, performance analytics and optimization cross-devices. The generally called A/B testing part is a big component of CRO and it refers to generating ideas called 'hypotheses' to improve the entire web funnel, from the main page down to the shopping cart, which will be validated through A/B testing, split testing, analytics and other tactics aimed at improving the key performance indicators.
With one of its main goals being to increase the conversion rate, which then maximizes the ROI for your digital business, some of the 'side effects' of CRO are reducing the customer acquisition cost, increasing the average order value, and the revenue per visitor, and decreasing the cart abandonment rate.
How Does CRO Work in eCommerce?
Online marketers specializing in eCommerce CRO employ a range of techniques across various stages of the customer journey, from initial awareness (top-of-the-funnel) to final conversion (bottom-of-the-funnel). This comprehensive approach aims to achieve several objectives:
- Reduce Cost per Acquisition (CPA): Implement targeted advertising strategies, optimize landing pages and web funnels, and refine audience targeting to enhance relevancy. Conduct A/B testing on all the steps of your purchase funnels and on your paid ads, do not neglect research into your shoppers and continually analyze data to allocate your budget efficiently.
- Increase Shopping Cart Conversions: Optimize the checkout process by minimizing steps, using persuasive product descriptions, providing guest checkout options, and displaying trust badges. Implement exit-intent pop-ups with enticing offers, add social proof and offer multiple payment options to encourage users to complete their purchases.
- Boost Average Order Value (AOV): Implement upselling and cross-selling techniques by showcasing related products or offering bundle deals. Introduce tiered discount structures based on order value and leverage persuasive copy and visuals to encourage customers to add more items to theirs.
- Improve Trial Quality: Enhance the trial sign-up process with a user-friendly interface and clear value propositions. Implement personalized onboarding sequences and nurture campaigns to guide users through the trial period, showcasing the product's benefits and increasing the likelihood of conversion.
- Recover Abandoned Carts: Deploy automated email campaigns with personalized content, reminding users of their abandoned items. Offer discounts or free shipping incentives, if applicable. Implement exit-intent pop-ups with similar incentives, providing a last-minute push for users to complete their purchases while they are still in their shopping cart.
Why Is Conversion Rate Important in eCommerce?
The conversion rate stands out as a crucial key performance indicator (KPI) used by marketers and business leaders alike. Keeping a close eye on this rate is vital for making informed decisions, particularly for businesses involved in online product sales. Additionally, this metric shapes the success of marketing campaigns and how marketing budgets are divided. Hence, it's pivotal to clearly define your conversion in line with your business objectives and closely track its progress.