July 27, 2020Conversion Rate Optimization or CRO can be one, if not the most effective investments you can make for your eCommerce business given the high ROI potential and speed to results. CRO strategies target website performance and test user experience solutions that encourage visitors to convert more often. Depending on the maturity of your digital presence, CRO testing software and agency programs are typically very affordable for an eCommerce business of any size to jump into. Of course, doing it right is important to be most effective, so here are four items to consider when thinking about starting up a CRO program.
- Program Investments: Outsourced software, program management, content creation, and site development needs
- Program ROI: The effective increase in revenue per unique visitor vs the investments to execute
- CRO Software: Procuring the right software to match the toolset, budget, and goals your program needs
- Personalization: Determine how CRO can be used to strategically phase in organizational personalization
Conversion rate optimization programs can take on a range of investments from minimal to big-budget depending on existing internal and external resources as well as size and scope of the initiative as a whole. That being said, one key investment involves acquiring testing software that ranges in price from free (very basic) to enterprise-level although many can be customized for your specific use case making them fit into a budget.
The remainder of investment relates specifically to resources and deliverables required to execute the program, including a CRO specialist / project manager, content creation, and timely development of optimizations. Most small to midsize brands may have the ability to gain support from an internal development and/or creative team but for most, having an experienced CRO specialist to plan and execute testing protocol and program management is a luxury.
Regardless of your existing resources, an agency can help get you started and manage these activities as required. Typical agency contracts are six or twelve months and range in price from $2K - >$15K per month depending on the resources outsourced.
CRO is more complex than many think. More than just “testing”, it is a complex strategy and needs a dedicated organizational structure to be effective. A common strategy many companies employ is to start out with an agency partner that can provide structure and execution with the goal of teaching and transitioning the program to internal teams as growth occurs.
Finding the right program to fit your business goals is vital to driving the highest return on investment. As far as agencies go, a six month CRO engagement should be able to pay for itself in full within the first 90 days of the program, leaving you with nothing but upside as the ROI compounds month over month.
When choosing an agency partner, be careful to ensure the agency is willing to provide you with a program structure and identify when you should expect to realize ROI from the program. Be wary of programs that need to do research for 30 or 60 days prior to executing anything tangible. To ensure optimal speed and impact to your investment, commit to timely implementation and development of optimization recommendations across your website. This may seem intuitive although it is the number one reason expected ROI is not achieved.
CRO programs seek to improve KPIs through testing and optimization and ROI is achieved in more ways than incremental improvements to an experience. Here are a few ways ROI is achieved through CRO.
- Drives Revenue per Visitor (RPV) as a key metric to track how effective an experience is at driving quality revenue opportunities. RPV incorporates overall conversion rate (CVR) and average order value (AOV) to get a true sense of how an experience is performing relative to its audience.
- Support meaningful investment in marketing dollars. Paying to drive users to a poor performing website experience is costly. CRO programs target and increase performance of all your channels through testing and optimization.
- CRO programs increase the amount of time that valuable resources (development, marketing, content creation) are engaged in known high revenue-generating activities as opposed to unknown opinion.
Ensure the toolset you choose matches your level of strategic commitment and ability to execute against full capabilities. In other words, don’t purchase a yacht if you plan on using it in a pond. In the chart below, we break down some of the most common features based on program maturity. Match the toolset to your program needs, your ROI depends on it!
|Features||A/B or Multivariate Testing, Reporting, Code editor, Visual Editor, Basic Integrations||Entry Level features, Multipage Testing, Robust research toolset, Limited tech stack integrations, Sophisticated stats engine, Segmentation reporting, Basic content-based personalization.||Program level features, Full stack integration, Best in class stats engine, Sophisticated AI capability, Integrates with outbound marketing, Advanced channel personalization|
A personalization strategy can consist of many tactics for essentially treating each customer as unique. The user experiences you create along the customer journey can take on a life of its own, from servicing each person dynamic content, messaging, offers, or entire custom pathways to purchase. This requires organizational commitment and a structured process to be successful. If you are thinking about personalization, CRO may be the best place to start before over-committing to any one strategy. The ability to test and target to subsets of your customers through virtual content allows you to over test first before you over commit. It then lends itself to a natural transition towards a broader strategy of personalization. The chart below shows a phased approach to personalization. Many of the CRO initiatives are identified as tactics within this approach.
|Phase 1||Phase 2||Phase 3||Phase 4|
|Level of Personalization Maturity||Begin with rules-based campaigns and transition to model-based campaigns that vary content based on channel / media.||Communicate with customers on an interactive basis leveraging testing optimization and response messaging.||Facilitate personalized content across channels. Communications are defined by interest, interactions, as well as time-sensitive.||Customers experience personalized content optimized across channels. Communications are defined by interest, interactions, and orchestrated decisioning at the right time.|
Prior to engaging with an agency or software provider, do some research regarding the considerations we discussed and ensure there is some degree of organizational commitment to program success. While there are many things to consider, a well-executed CRO program often has the best combination of high ROI and rapid results. In addition, long term strategies like personalization can use CRO to phase in necessary organizational competency and commitment to drive long term success.