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The Importance of Conversion Rate Optimization

February 16, 2020 Peter Minkoff

Every business, brand or enterprise wants to ensure good profitability. The main goal is to maximize profits while minimizing expenses. However, there cannot be any profits without customers. But to get customers, you must encourage leads to convert in the first place. That’s easier said than done, unfortunately.

More often than not, business owners expect that leads will make purchases straight away. After all, they’ve landed on your website, which means they are ready to buy, right? Not really. Consumers prefer to conduct research before they decide what to do next.

Therefore, even if an organic lead has landed on your website, they’re most likely comparing prices, looking for informative content or getting familiarized with your products or services in detail.

To encourage leads to convert, businesses oftentimes rely on conversion rate optimization, also referred to as CRO. This strategy focuses on optimizing marketing efforts, reducing acquisition costs and maximizing sales through conversions. With that in mind, here are a few reasons why CRO is so important.

Lead acquisition

The important factor that CRO does is helping you acquire more qualified leads. What that means is that consumers will be more willing to convert when they arrive on your website. In other words, you’re increasing the number of target customers on your website, not just increasing the web traffic, in general. For example, you’re not just relying on exceptional web design to impress visitors.

In fact, you’re already helping leads familiarize themselves with your products and services throughout their buyer’s journey while leading them down your sales funnel, which ends on your website. Therefore, with CRO, your leads are already informed and nurtured when they land on your pages which drastically increases the chances of conversions.

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Optimizes advertisement costs

A lot of businesses create a budget for a PPC (Pay-Per-Click) campaign that will drive more relevant leads their way. It’s no secret that the costs for such advertisement campaigns, such as Google AdWords, for instance, are skyrocketing.

The main reason is that the market is growing to be more crowded and more competitive than ever. Naturally, you want the best results with the best ROI if you’re going to invest in advertisements. CRO can help you with that.

The way it works is that it helps you understand your customers quite well. You must understand their behavior, preferences, purchasing decisions and intent so that you can target them the best way possible. With CRO, you’ll be able to opt for the right campaign that will not just be cost-effective but also able to drive conversions the way you need them to.

Improve marketing efficiency

Digital marketing is becoming more and more complex each year. Again, the main reason is the market being overcrowded and highly competitive. With so many businesses and various offers going about, consumers can pretty much pick whatever they want.

However, you want them to pick your business over that of your competitors. This is where CRO comes in to play. Consumers generally have short attention spans and they will opt for offers that seem best to them right then and there in most cases.

With the right CRO tool in hand, you can maximize your marketing efficiency and target customers with just the right amount of personalization and customization that will pique their interest. Whether you’re targeting potential leads via email, social media or any other means, you have to target them with the right messages.

Boost retention rate

Optimizing conversions is not just about acquiring new customers. As important it is to have as many customers as you can get your hands on, it’s equally, if not, more important to retain those customers. CRO helps with retention as well as with the acquisition of customers.

Leads need to be nurtured even after they convert. The main reason is that it costs 6 to 7 times more to acquire a new customer than it costs to retain one. Moreover, repeat customers have a tendency to spend up to 67% more than new customers.

Therefore, by using CRO to boost retention rate by just 5%, you can improve your company’s profitability between 75% and 95%. As mentioned before, it’s the goal of every business to improve profitability as much as possible, which is why CRO is vital in such matters.

Creates a unique environment for consumers

When it comes to optimizing conversion rates, it’s not just the marketing tactics and messages that seal the deal. Optimizing conversions also means providing customers with exceptional customer experience and creating a unique environment where they can decide to take the desired action seamlessly.

Let’s take your website as the main point of sale for example. No matter how effective your marketing that led potential customers to your website was, their journey isn’t finished yet. They still have time to browse your website and check your offers before they convert.

It’d be a real shame if they were to give up here. That’s why your website needs to be a unique environment with an exceptional experience. Therefore, tend to the consumer needs and expectations with CRO and you won’t make a mistake. For instance, here are a few things to focus on so that you can encourage leads to convert:

  • Ensure fast page loading time and website speed
  • Provide leads with informative and quality content
  • Make your website mobile-friendly and easy to navigate
  • Implement proper security measures
  • Focus on customer service and support on your website

CRO is a strategy that all businesses should leverage. It helps you ensure that your leads will ultimately become your customers by converting at the end of their journey. That’s why CRO is vital in today’s competitive and oversaturated market where every customer counts.

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