If you run an eCommerce business, you’re probably familiar with various key performance indicators that help gauge the success of your site. Among these your conversion rate should be one of the top priorities.
The ability to transform website visitors into customers is critical in order to increase your revenue and customer base. Paying close attention and optimizing your conversion rate often has one of the most substantial impacts on your company’s bottom line.
What does a conversion look like?
Your desired conversions will look different based on your business goals, but common conversions can be the following:
Add to cart
Add to wishlist
Within the context of this series, we’re going to be talking specifically about purchase conversions (online sales). This is the figure eCom merchants often cares most about as it is the most closely linked to growth and profitability.
What is CRO?
Conversion Rate Optimization refers to the process of increasing the percentage of web visitors that complete a desired action - such as making a purchase. It involves optimizing design, content, usability, and other elements to ensure visitors convert. It’s important because a deeper understanding of user behavior allows merchants to make improvements to site effectiveness and lower their cost per acquisition (CPA).
Why is CRO important?
Put simply, better CRO = more sales. The average eCommerce conversion rate can be anywhere between 2-5%, even the smallest changes can lead to tremendous improvements. But beyond the obvious, CRO is important because traffic has gotten substantially more expensive these days.
Meta's CPM alone has increased 61% YoY. The rollout of apple's iOS 14.5 included changes to ad targeting and privacy policies that have resulted in significant decrease in ad performance across nearly every industry. Costly ads and insufficient first-purchase profitability mean marketers and business owners have to consider how they spend each advertising dollar.
Anytime you receive traffic from marketing campaigns, you want to maximize everything you can get from it. When you optimize your conversion rate, you’re effectively converting a higher portion of your traffic, which helps lower your customer acquisition costs (CAC) and your return on ad spend (ROAS).