Conversion rate optimization takes the already existing demand (traffic) and converts them into buyers at a higher rate. This is not only cost-effective but also yields a better RoI.
- By Aditya Saxena
The Indian digital advertising industry is poised to grow at a CAGR of 31.96 per cent, equating to Rs 24,920 crores by 2021, according to a report by Dentsu Aegis Network. Banking on this growth, an average firm allocates nearly 45 per cent of its marketing budget to digital channels such as paid advertising, organic search, programmatic, etc. Startups often find themselves in a bind on how to best utilize marketing spends. Whether startups have raised capital through private equity and venture capital investments, or are bootstrapped, increasing brand recognition and awareness depends on a carefully calibrated marketing strategy. To gain quick traction, firms resort to higher spends on paid advertising, and/or initiate efforts towards building the brand organically.
Why Conversion Rate Optimization
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Consider a scenario, where a small to mid-size firm has a target to generate 10,000 monthly visitors to its website. It creates a campaign optimized to reach a target and spends, say, around Rs 150,000 over a period of two-three months or more. Out of these 10,000 prospects, 200 of them convert into eventual buyers; equating to a conversion rate of 2 per cent. Now, what if new investments dictate the firm to grow at 5X or 10X of its original targets. A natural reaction would be to pump in additional spends, which will have an adverse effect on your return-on-investment (RoI).
This is where Conversion Rate Optimization or CRO comes in. It takes the already existing demand (traffic) and converts them into buyers at a higher rate. This is not only cost-effective but also yields a better RoI. CRO helps marketers derive actionable insights on how the user behaves on the website. Armed with the insight, marketers can then tailor the experience of their digital assets to induce the desired action — generate a lead or a sale.
However, CRO still largely remains an under-invested strategy. According to Adobe (Omniture), for every $80 spent on driving traffic to websites, companies spend only $1 converting that traffic. More alarmingly, over 68 per cent of the industries do not have a documented CRO strategy. Equally surprising is a study conducted by VentureBeat which suggested using CRO tools revealed an average increase in RoI of 223 per cent. So why don’t more people use it?
This is partly due to the nature of CRO as an exercise and the plethora of contradicting content available online regarding CRO. As a discipline, it requires you to take an outside-inside approach to problem-solving. One must master many disciplines and that can be hard when you are managing a business. Additionally, you need to be able to look past your own biases, beliefs, and expertise, as assumptions change with time. And finally, finding a well-versed CRO analyst with relevant domain expertise is a tricky challenge.
Strategizing CRO Correctly
A stellar CRO strategy commences with a thorough analysis of the website (using data-driven, heuristics and behavioural analysis), followed by hypothesis ideation, AB/MVT testing and finally, analyzing the results. It is a cyclic process that aims at improving conversions of the pre-existing website traffic. An analysis of this magnitude will help you personalize content and approach your target audience accurately. By addressing their intent, you tend to garner their attention and loyalty.
An article by The Times revealed an average user spends about 15 seconds on your site before bouncing off. In this digital age, distraction is plentiful, and users have no shortage of choices. Your website must be easy to navigate with minimal clicks. Furthermore, users have very specific problems online. One-size-fits-all solution will not work. Best articulated by conversion optimisation expert Peep Laja, “You don’t have generic problems, you have specific problems,” therefore, we must cater to the user’s intent through hyper-personalization. The BFSI segment stands to benefit the most from this, as no one user has the same requirement when it comes to financial planning.
Finally, we address the most important piece of the puzzle, streamlining the user experience (UX). CRO enables you to make incremental changes on your website through strategic testing. With CRO, every test is an opportunity to know your audience better and build a connection with them. These incremental changes, commonly referred to as lean UI/UX changes, eventually lead to better retention and conversion of the currently existing users on the website.
Tools like scroll maps, heatmaps and click maps provide you with first-hand actionable insights into what works and what doesn’t. Other qualitative methods like surveys help you map the intent of users. This can also boost your search engine marketing strategy by bidding for the right keywords. To conclude, conversion rate optimization is an industry and a domain agnostic, cost-effective method of improving bottom-funnel activity on your website. It does not require a sizeable budget or months to see results. All you need is a well-documented structured approach to CRO and a well-versed CRO consultant responsible for these efforts.
(Aditya Saxena is the Vice President, APAC at iQuanti. Views expressed are the author’s own.)