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GUEST COMMENT Conversion rate optimisation demands a change in your company culture
by Stephen Pavlovich
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How does conversion rate optimisation affect a business? At its simplest, a company that increases its conversion rate by 20% should expect their revenue to increase proportionally. That’s a good start, but the total impact is much wider than this. It creates a ripple effect that improves the performance of all marketing channels.
In most cases a conversion is a purchase, but it doesn’t have to be. It could mean an account creation or an app download. What it also means is that with a higher conversion rate, paid advertising becomes more profitable. Therefore, businesses can increase their advertising budget and expand to cover channels that weren’t profitable before. That makes a business more robust. So maybe a better way to look at it is like this:
“Conversion optimisation helps generate more revenue per visitor – meaning you can spend more to acquire them than your competitors.”
At its simplest, the company that generates the most profit from a visitor will increase market share. Just look at the likes of Amazon and eBay, where conversion optimisation is part of the culture. Now compare their growth rates with more traditional companies that have been slow to adopt and are struggling to catch up.
So why are so few companies actually improving conversion rates? The simple truth is that it’s not an easy thing to do. It is a complex challenge for most businesses, especially when they don’t measure the effect of changes they have made or fail to test properly. To be an effective optimiser, you need to combine quantitative and qualitative analysis with creativity and business experience. In the past, these skills were fragmented and owned by separate departments.
In Econsultancy’s CRO report last year, 28% of companies surveyed said that a conflict of interest between different departments was a major barrier to improving conversion rates. We’re now seeing these converging: data, design and marketing are being drawn together and this is increasing the speed of adoption.
In the same report over half of the companies surveyed (52%) claimed that lack of resources and budget were the factors holding them back. I don’t think it’s a question of lack of budget. Companies are actually spending money on design, development and new content already.
What they need to do is make a shift in their thinking. It’s no longer acceptable to rely on opinion or best practice anymore. Designers now have to put function above aesthetics, and that means creating data-driven experiences that are better for users.
Most companies release a new website every few years, but without a strong understanding of what makes their visitors become customers. Some data goes into the redesign – but it’s normally just based on a combination of gut instinct, what the competition are doing, and HiPPOs (highest paid person’s opinions). That means when many companies launch a redesigned website, they watch their conversion rate drop – it’s not been built upon the principles that affect their users’ behaviour. Instead, the priority should be to create a culture focused on data and testing.
Any business that wants to adopt conversion optimisation needs this culture. From juniors to C-level, opinions will no longer count unless backed up by data. Then, they need to adopt a structured approach to testing: one that identifies the reasons users aren’t converting, and then fixes it.
There’s no rocket science behind conversion optimisation. First, we use data to find out why users aren’t converting. Then, we create new experiences that fix these problems. Finally, we test these experiences and review the results.
With this approach, increases in revenue of 5% or 10% aren’t out-of-reach – they become the norm.
Stephen Pavlovich is CEO of Conversion Factory.
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