What Is Conversion Rate Optimization and Why Does It Matter to Your Business?

By on December 22, 2012

What is Conversion Rate Optimization and Why Does it Matter to Your Business?

If you’re just beginning your entrepreneurial journey, you may have little time or money to spend on perfecting your website. You may also be overwhelmed by what you have to learn and do in order to establish a brand and sell your product. To operate efficiently, you need to have a firm understanding of what matters the most for your website and how to make those limited resources go as far a possible in maximizing your site’s effectiveness.

So What IS the Most Important Part?

While the specifics of every business are different, effective strategies can streamline your process. The first thing to accomplish if you’re a new entrepreneur with a product is creating a clear call to action on your website or landing page. Each page should have a call to action that guides your audience to communicating with you, signing up for a mailing list, or purchasing directly. It’s important to make your call to action clear as well as enticing enough for your customers to follow through to a sales conversion.

For service companies, credibility should be the main focus of your website. You are often better off not trying to sell the service directly through your website. Rather, the site should be alluring so that your potential customers are comfortable and confident enough to give their contact information to you or call you for more information. The purpose of your website is primarily for generating leads or vetting out targeted customers and building your image of credibility.

Why Conversion Rate Optimization (CRO) Matters

A conversion rate is the ratio of people who visit your site compared to people that follow through on a call to action. The number of people clicking through to another page, signing up for a list, or buying the product can be measures of your conversion. The process of improving the site over time is optimizing your site. Your goal, as you progress, is successful optimization.

High traffic means nothing if only a few people reach the goal. Attracting prospects is great. However, if you don’t know who they are (and if they don’t eventually make a purchase), it’s not going to help your business grow. Most traffic never comes back. It’s essential to keep as many potential customers as possible involved in your website and lead them to buying your product, whether immediately or over time.

By focusing on CRO, your business has the ability to grow without spending all your funds on advertising. Then when you DO have more resources to spend on advertising, you can increase your ROI on that money spent because you’re converting more traffic. Once your revenue is up, you can advertise more and grow faster than competitors due to your superior conversion rate and ROI.

How to Get Started in CRO

You can take on very basic CRO strategies. If you’re bootstrapping, you may not have a choice. However, there will be a limit to how far you can grow based on your own understanding of CRO. It’s a simple concept and well worth implementing improvements at any level, but there’s a reason that people specialize in it.

If you have sufficient funds, outsourcing to a CRO consultant is the ideal option. Costs can run anywhere from $200 to $2,500 an hour. Keep in mind that you get what you pay for in this realm. Since the industry is fairly new, many companies may not have your best interests in mind. Quality can be costly. Take time researching what consultant best fits your needs.

Whether or not to outsource depends on how valuable a better ROI for your website could be to your venture. If you start on your own and do some basic optimization, you should be able to see the ROI soon enough to make it worth your time. There’s always something you can do to improve conversions. Unless you’re getting a 100% conversion on all your traffic, then there’s room to grow.

Set a budget and a time limit (in hours) to commit to CRO and work with your consultant to work within those parameters. Once new strategies and tools have been implemented, perform thorough and regular analysis of your data and be patient. The changes to your site and accurate measures of the effects of those changes will take time.

As an entrepreneur, you often don’t have a large team to work with in the beginning. As a result, you have to understand many different aspects of business that may not be your specific strengths. You have to recognize what you can and cannot do. When it comes to your website, outsourcing certain jobs is great when the time and resources are right.

Maximizing the effectiveness of your website can improve your conversions and overall business dramatically. By reflecting on your venture’s needs and establishing a plan based on your current resources, you can develop your site with intelligence and practicality. Invest in CRO and see the difference a few key changes can make to your future.

Benji Rabhan, founder and CEO of MorrisCore, has helped others improve their online presence and make money with their websites since he was 13 years old. Benji is an expert in conversion rate optimization, automation, web design, PPC, and online marketing. In November 2011, he was honored at the White House as an Empact100 recipient. Benji’s first book, “Failure is Obsolete,” will be released in January. He can be contacted @benjirabhan.

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