From SEO to content marketing, the list of website growth strategies is seemingly endless. It can be easy to get caught in the hamster wheel of reports and analytics — yet not all strategies offer the same return on investment. So, which principles should you really focus on to boost profits and growth?
SEO expert Rand Fishkin says that conversion rate optimization (CRO) is the single most essential strategy for driving exponential business growth. While other methods are helpful, improving CRO will deliver the biggest returns that help to increase profits over time.
Still need convincing? Some of today’s top businesses have used CRO with incredibly impressive outcomes. By focusing on CRO, Fishkin’s SEO software company Moz increased revenue by $1 million in just one year. Likewise, New Balance doubled in-store sales, and Walmart Canada boosted conversions by 20%.
CRO is vital to any business, no matter the industry. Here are just a few of the benefits you will experience when you harness the real power of CRO for exponential business growth.
1. Better Understand Your Users
Online cart abandonment is one of the leading barriers for today’s DTC eCommerce retailers, with abandonment rates reaching an average of 69.8% in 2020. Complicated checkouts, security concerns and other factors can all increase abandonment rates. But CRO provides invaluable insights to help companies understand their website visitors.
In short, CRO aims to increase the percentage of users who complete any desired action on a web page — such as filling out a form, completing a purchase or entering their email address. But, the principle is about much more than numbers.
By taking a holistic approach to CRO, you will get a deeper look into everything that happens before a user converts, such as:
- What brings visitors to your website
- Why and where users are abandoning the site
- What persuades visitors into action
These user insights will help create a website design that drastically improves the overall customer experience.
2. Get More Free Customers
The cost of acquiring a new customer has always been far more expensive than the cost of retaining an existing customer. But the acquisition costs have increased an astonishing 60% over the past 6 years, making it even more appealing for brands to focus on existing customers.
Fortunately, CRO allows companies to bring in more customers without the hefty price tag — no expensive marketing campaigns required. How? By leveraging existing website traffic to boost conversions.
Consider a website with 1000 organic visitors per month and a conversion rate of 2%. This website typically converts 20 visitors per month. But after running multiple split tests, that conversion rate might increase to 4%. At this point, the website will convert 40 visitors per month — doubling the number of customers, without increasing traffic.
3. Increase Profits
Ultimately, every business is seeking higher conversion rates in order to increase profits. Companies that invest in CRO can increase profits without ever increasing total costs. Though CRO does require some upfront expenses, those costs are quickly offset by an increase in profit.
Here is a quick reminder of how to calculate profit:
Profit = Revenue – Cost
Revenue can be calculated using the following equation:
Revenue = Visitors x Conversion Rate x Average Order
Using this equation, even a 2% increase in conversion rate can significantly increase a business’s profits. This increase brings in new customers and boosts sales, yet does not require cost-cutting, joint ventures or funding.
If a website has 1000 organic visitors, a 5% conversion rate, and an average order of $100, monthly revenue would total $5,000. By increasing that conversion rate just 1%, monthly revenue would increase by $10,000 a month.
4. Use Increased Profits to Reinvest
Every savvy CEO knows that reinvesting is crucial to business growth. Companies that reinvest earnings back into the business can generate enormous returns with compound interest, and this principle can be applied to increasing website traffic, too.
Once you have used CRO to get more free customers and increase profits, you can use those profits to get more traffic. Then the cycle can repeat continuously in an upward growth pattern.
Let us refer back to our last example. A company with a 1% increase in conversion rate could boost revenue by $10,000.
1000 visitors x 6% conversion rate x $100 order x 10 = $60,000
If they take that $10,000 and reinvest it to acquire more website traffic, they could double their revenue:
2000 visitors x 6% conversion rate x $100 order x 10 = $120,000
The more the company earns, the more money they have to reinvest — making their business highly competitive and opening new doors of success at a rapid pace.
5. Optimize Further with CRO Insights
So far, we have discussed ways to increase profits by focusing solely on CRO. But, optimizing other metrics offers even greater business growth potential. And luckily, CRO provides you with all the data you need to do it.
CRO helps you understand what products to recommend, when to recommend them, which CTAs are most effective and more. The more A/B tests you run, the better you will understand your customers and the easier it will be to market to them and offer more of what they love.
Without CRO, you will be forced to rely on analytics and CRM tools, which fall short when you want to boost valuable metrics like customer lifetime value.
Grow Your Business with CRO Tools
CRO tools are an essential investment as you seek to transform your data into actionable insights.
Air360 by Scalefast is designed to help you gain a greater understanding of your website visitors. Our CRO tool offers valuable feedback, including:
- On-page analytics. View the customer journey with on-page analytics.
- Smart funnels. Build smart funnels to understand user behavior.
- Session replays. Replay visitors sessions and optimize the customer journey.
- Customized insights. Take advantage of AI-powered analytics to get detailed insights.
Check out the Air360 eBook today and start optimizing your conversion rates for exponential business growth.