Investment in Conversion Rate Optimisation (CRO) is low
Conversion Rate Optimisation, the continual process a business follows to make it easier and easier for website visitors to complete their desired outcome is, today in 2020, widely adopted by businesses of all sizes. Despite the prevalence and proven benefits of CRO, compared to acquisition in particular, budgets dedicated to CRO remain low.
The history of CRO can be traced back to early 2000s when the number of websites started to rapidly grow, increasing competition meant new designs and experiences were being tried out. The launch of affordable A/B testing platforms democratised testing and accelerated the adoption of CRO globally across all industries. I can still remember 10 years ago when we sat down as UX agency to set out how we could maximise the opportunity CRO presented us, one thing we knew at the time, and something we were really excited about, was how simple the business case was:
For every $100 spent of marketing: $99 was spent on acquiring traffic while only $1 was spent on converting traffic. Take a tiny percentage of the acquisition budget to increase spend on converting traffic, target a realistic uplift of 5%-10% and quickly generate a much better overall ROI.
Fast forward to today and budgets have improved, but only marginally, which amazes me!!
Why is CRO undervalued?
CRO today is not (and maybe never was) a standalone methodology or industry, it is deeply woven into “Customer Experience” – the arms race we all witnessing to provide the best customer experience, because that is how brands are judged by their customers and competitors; means that quantifying CRO is much harder, it is no longer about simply increasing sales, it is about improving the customer experience. As this diagram shows, a bad (customer) experience has serious consequences.
The diagram shows just how brutal customers can be…
…so let me be brutal also, 3 things are a given whether you realise them or not:
1. You must invest heavily in CX now
You need to invest heavily in improving your customer experience. As highlighted by PWC in the diagram above: 32% of customers will stop interacting with a brand after a single bad experience, and 45% will switch after three bad experiences, there is no time for complacency.
2. CRO transcends “conversion rates”
Conversion Rate Optimisation (despite the term being a little misleading) is not a myopic methodology to boost conversion rates. CRO is a continuous process that enables any business to improve their website by progressively making it easier for visitors to achieve their desired outcome.
3. You are not spending enough on CRO
As a direct consequence of points 1 & 2 you are not investing anywhere near enough in CRO.
Areas to consider investing in
If you and your organisation are not already looking at how you can invest more in CRO and CX, then it is time to start. Accenture talk about the 2020s as being the Henry Ford moment of digital. The clock is ticking, the race is on! Before you rush in, you need to work out a plan, and realistically how much you should be investing. So, ask yourself:
- Do you have a standardised CRO process yet?
- Are you ready (as a business) to implement a culture of experimentation?
- Do you have all the necessary technology needed to correctly execute your strategy?
- How will you measure success and link to “customer experience” Objectives & Key Results (OKRs)?
- How do you expand CRO?
- How are you going to prioritise initiatives?
- Have you identified all the barriers to CRO?
People and Knowledge:
- How many CRO specialists do you have?
- What skills do you need? UX, analytics, design, developers, business/commercial skills?
- Where are you going to learn and seek new ideas from?
- Are you using a specialist CRO partner to help you?
Does CRO have a proven ROI or perceived value? This is what makes up most business cases, and while it is of course incredibly important, you must consider everything else as well:
- Is there a dedicated budget?
- Which teams/divisions are likely to contribute?
- What do you need to quantify/demonstrate to source the budget?
- If services are to be outsourced, how much budget is needed?
- What and how is the budget secured for technology (if it is needed)?
If you need any help formulating a plan on how CRO should support improvements in your customer experience, we are available… just get in touch.