By Abdulmuhsen Fakih, CEO & Founder of Systemize It, a 360° Sales and Marketing automation company.
In today’s digital landscape, where everyone is competing for digital ad space, I’ve found there is only one way to gain an edge over the competition: conversion rate optimization. Conversion rate optimization (CRO) is the process of systematically improving the ratio of a favorable outcome to overall actions.
For example, let’s say you offer an email opt-in and you get 50 visitors; if two people opt in, your conversion rate would be 4%. Since digital ad platforms are auction-based, this means that the more people who convert, the higher you can bid, the more views you can get and the more revenue you will generate. CRO is an invaluable tool for growth.
How does conversion rate optimization impact revenue?
Let’s consider another example, involving two different apps.
App A:
• Downloads: 10,000
• Trial sign-ups: 4,000 (40% conversion rate)
• Paid subscriptions: 1,000 (25% conversion rate)
• Lifetime revenue/customer: $100
• Total revenue: $100,000
App B:
• Downloads: 5,000
• Trial sign-ups: 2,750 (55% conversion rate)
• Paid subscriptions: 1,100 (40% conversion rate)
• Lifetime revenue/customer: $100
• Total revenue: $110,000
Although App B had 50% fewer downloads than App A, it generated 10% more revenue. That was achieved by increasing the conversion rate of only two steps of the customer journey by 15%.
Here’s how to improve your conversion rate.
1. Make split testing a weekly habit.
A split test is when you run a new image, headline, pricing, video, call to action or text against the one you are currently running to see if it performs better. A/B testing on a weekly basis will enable you to understand your customers through data, save on ad spend and improve your targeting.
2. Simplify the language.
According to data from 2012 to 2017, 54% of U.S. adults aged 16 to 74 years old lack literacy proficiency. One of the easiest ways to improve your conversion rate is to simplify the vocabulary used and use simple, short sentences. Also, you can copy your text and use a free online text editor to evaluate the language level. Ideally, you want your text to be written at a third-grade level.
3. Decrease friction.
The easier it is for people to buy from you, the more people will buy. Make your customer journey as intuitive and clear as possible. If your customer journey involves complex steps such as identity/address verification, online meetings or physical meetings, make sure you ask for those after the payment has been made.
If possible, collect payment even before the sign-up. This is because everyone who purchases will sign up, but not everyone who signs up will end up purchasing. So always make sure to set up your conversion page first (usually, with a paywall).
4. Offer win-backs.
A win-back is a coupon, discount, free trial, free sample or any other incentive for a customer to come back and interact with your business. Do not be afraid to be aggressive with your win-backs; however, a common mistake businesses make with win-backs is that they overdo it to the extent that their customers stop responding to the win-backs.
Here are a few ways win-backs can be implemented:
1. During the purchase: For example, once a customer adds an item to their cart and leaves the web page, send them an email with a discount code for that item.
2. For non-activity: If a customer makes a purchase and then does not make any other purchases for six months, send a “we miss you” email with a discount.
3. After a purchase: Upsell or cross-sell an item.
Ultimately, I’ve found conversion rate optimization is the only way to gain an edge in digital advertising. So make split testing a weekly habit. Use simple vocabulary and short sentences in your landers, ads and content. Make it seamless for customers to buy from you. And use win-backs for customers who stop interacting with your business.
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