Business Case for Conversion Rate Optimization

You're not alone if you have been thinking about how to justify the cost of implementing a conversion rate optimization (CRO) upgrade on your website. It is estimated that the process can increase your conversion rate by 5% to 20% with the proper upgrades to your website. The benefits of CRO are numerous: you'll reach a wider audience, reduce your hidden costs, and improve the user experience. But what is the business case for conversion rate optimization? Let's explore the issue. This article will show you the business case for CRO.

The Challenge

Most business transformations or breakthroughs begin with a challenge, question, or a problem. For example, as a business executive or owner you may be faced with questions like:

What are ways to increase revenues? What new products or services can we offer?
Why are we losing business to the competition?
Are we responsive to our customer’s needs? Is our customer service team meeting the needs of our customers?
How can we increase the productivity of our sales team?
We are spending more on marketing, but not getting more (or enough) new customers. What is the problem with our marketing?
How can we get more leads?
Why can’t we get more reviews and testimonials from our customers?
Are we following up on new leads fast enough?
Our customer acquisition cost are too high.
Why are our profits declining?

I think you get the picture. You may have challenges specific to your business, but the solution will require you to take action. Every business large or small needs a steady flow of new customers to remain profitable. One solution to increase revenue is optimize your website by using conversion rate optimization methods.

Why Implement CRO? Where is the Evidence We Have A Problem?

One of the first questions we get is “Why should we optimize our website?” First, we need to backup and perform a few simple free tests:

Test 1: Open your browser and perform a search using a keyword that represents the product or service you sell. For example, it you sell ‘appliances’ you would enter that keyword in Google. Did your company show up on the first page? Why is this important? The simple answer is if a customer can’t find you, they can’t buy from you. All the companies that show up on the first page have a competitive advantage. According to Google, only 25% of the people who perform searches will go to the second page of search results.
Test 2: Look at some of the websites on the first page and compare them to yours? What are your objective observations? There is a reason they are on the first page! We can give you tools to monitor the competition so you can capture your fair share of opportunities (Contact us and we will give you a free tool to track changes on the websites of your competitors, delivered in a daily email).
Test 3: If you have an analytics application installed on your website (i.e., Google Analytics), there are a few metrics to review: 1) How many daily visitors do you receive, 2) What is the ‘bounce’ rate’, and 3) How many visitors are you converting into customers? A high bounce rate means a potential customer found your website, exited very quickly, and are not likely to return. If you don’t have an analytics application, you are missing key data about your business and your customers.
Test 4: Run an analysis of your website to uncover any errors or performance problems (request your free website analysis at the end of this article) that may be degrading the customer experience. Also, why keep spending money sending traffic to a website that the customer is only going to leave quickly when they get there? That ‘click’ on your ad may have cost you anywhere from $5 – $30 depending on your business. What value did you receive for your advertising spend?

If your website ‘failed’ any of these basic tests meaning you identified improvement that can be made to your website, then the business case for conversion rate optimization is justified.

What Are The Benefits of Conversion Rate Optimization?

Here are the benefits of optimizing your website and conversion rates:

Identify user experience problems
Gather and understand visitor needs and objections
Understand different visitors types and their level of buyer intent
Boost revenue from your website
Lower customer acquisition costs
Improve search engine ranking
Make better decisions using data
Increase the ROI on your marketing campaigns
Quick results and adaptability to changes in the market

While all these benefits standalone are great reasons to start optimizing your website, the real power comes from the combined impact of all the benefits in their entirety.

For additional information, read our article on Are You Ready For The Benefits of Optimization.

How Much Does Conversion Rate Optimization Cost: The Business Justification for Conversion Rate Optimization

It’s a well-known fact that increasing the conversion rate can free up a lot of your marketing budget. It increases traffic and reduces customer acquisition costs. The increasing conversion rate will mean getting more sales per dollar you spend on marketing. For example, if you can afford to spend $1,000 on advertising and make 1000 sales, would that be a good investment? Conversion rate optimization can dramatically cut the cost of acquiring customers.

The secret to increased conversion rates is to get smart about your most profitable customers. Your business can grow exponentially by getting smart about which visitors are most likely to purchase from you. You can increase your Average Order Value up to 30 percent and generate more revenue per user with less effort. However, this is not always about money. The key is to focus on your ideal prospects to optimize your website for maximum conversion rates.

Another critical part of conversion rate optimization is lead generation. Customer intelligence affects every aspect of your business. Knowing your ideal prospects is crucial in increasing conversion rates, piquing their interest, and ultimately, your sales. Your competition might focus on lagging indicators, but these are mainly meaningless without customer intelligence. Moreover, your sales are the strength of your business. That’s why it’s so important to increase conversion rates and reduce hidden costs.

While maximizing your website’s conversion rate is essential, you can’t overlook the importance of reducing your initial costs. This way, you’ll get more profits with less work – and it won’t require you to spend money on advertising. And, even a slight increase in conversion rate can mean huge profits! Request a Free CRO Quote to receive customized pricing for your business.