CRO Series: How to Improve Your Conversion Rate
How much you get for a bang for your buck separates a good business from a bad one—and in this case, it’s your conversion rate. Contrary to various articles you might have come across, your conversion rate doesn’t necessarily depend on you, but on your customers.
Why is that? To understand how it works, let’s run two scenarios.
- You have 100k monthly traffic to your Shopify website.
- To get that traffic, you had to spend $20,000 on Facebook ads and $7,000 managing other channels.
- In total, you’re spending $27,000 per month to get 100k traffic.
- Your total revenue at the end of the month lets you average around $10,000 – $15,000 net.
- This leaves you short of $12,000 to even $17,000 every month.
This first scenario depicts that your conversion is relatively low, meaning, your customers are not converting at a level that allows your business to be profitable and sustainable in the long run.
- You pull in the same 100k monthly traffic for your Shopify website as the first scenario.
- You had to spend $20,000 on Facebook ads and $7,000 managing other channels to get that traffic.
- In total, you’re spending $27,000 per month to get 100k traffic.
- At the end of the month, your total revenue lets you average around $35,000 – $47,000 net.
- This leaves you in profit from anywhere between $8,000 to even $10,000 every month.
In this second scenario, you’re getting the results of a reasonable conversion rate of a business. Hence, making your cost on acquisition higher than your estimated average customer lifetime value. All of which is dictated by your customers —not you. Your part here is to lay down all the processes and stages there, hoping a web visitor will come along, click on all of it —and then convert. Your conversion rate is the percentage number of web visitors that take action on your website.
No action means no conversion.
It’s not that getting traffic isn’t a good idea — in fact, it’s the backbone of your business. But that traffic is almost useless if they don’t convert. The amount of traffic you get dictates how much conversion rate you need to sustain your business.
A 5% conversion rate on a 10K traffic is not the same as the same conversion rate for a 20K traffic. So either of these conversion rates is enough for some businesses, but it means they are out of business for others.
This brings us to our next point on a good or bad conversion rate for your business.
What makes a good or bad conversion rate?
The concept of conversion rate is based on industry standards. This means as a business owner, your business is part of a particular industry. To market to that industry’s audience, there are certain norms that guide you in your marketing approach.
Let’s say you run an ecommerce store selling shoes. Your typical conversion rate isn’t going to be the same for someone else selling a $5,000 software development program. The audience, industry, and strategies used to convert will be different, as will the conversion rate.
And for all of that traffic, the amazon conversion rate ranges between 10-15% for listings and a whopping 74% for Prime Members—which is an incredibly high standard in the ecommerce industry with the standards being between 1-2%, and the best having a 7% conversion rate according to Market Sherpa.
The stats prove that Amazon —if we’re only considering the default price listings and not Prime members — is getting the best out of their traffic with such a conversion rate.
On the other hand, let’s move this to another industry—B2B SaaS. The average conversion rate in B2B SaaS ranges from 3-5%, with 7% as a solid point for the best possible conversion.
Comparing both B2B SaaS and the e-commerce industry side-by-side with 1-2% and 3-5% conversion rates, respectively, you’ll see the average conversion in one industry is terrible in the other. There are more stats to support this claim when you compare conversion rates among industries. This report from Market Sherpa shows the difference in conversion rates across industries:
With all of these, it’s best to say a good or bad conversion rate for a business’s website is dependent on its industry.
Understanding how your business works in the respective industry guides you. Nevertheless, regardless of your business type, the same process leads to conversion. Before you try to improve your conversion rate, you need to understand how a typical customer journey works.
What is a Customer Journey?
A customer journey is the sum of interactions and experiences a customer has with a business pre-and-post-purchase. In other words, the customer journey is the stages your customer goes through before and after purchasing from your business.
A typical customer journey goes like this:
The correlation between customer journey and conversion rate is based on users’ actions at each stage of interacting with the business. To make this process more effective, it helps to create a Customer Journey Map and highlight the actions needed to take a customer from one stage to another.
A customer journey map serves as a visual representation of your customer’s engagements with your business at every stage. With this, you’re putting yourself directly in the customer’s mind and get a better understanding of how specific touchpoints can improve or damage your business. A typical customer journey map looks more like a customer acquisition funnel, and sometimes the two terms are confused. But the customer journey map goes the extra mile of considering post-purchase.
In most cases, you’ll think conversion stops after purchase, but the customer journey shows that it doesn’t—loyalty (or retention) and advocacy comes in.
Visualizing the Funnel for Conversions
Understanding the concept of the funnel used for both customer journey map and customer acquisition funnel shows that as the progression continues, there are fewer people in the funnel.
Many people get in at the top—this is the noisiest place in the funnel. But as they move through the stages, it becomes quieter. Some will call it customer filtration, but that’s just a fancy word for how the normal sale cycle works. With each stage, you should know that using the same type of conversion strategies won’t work. Not everyone is your customer or will be your customer, and you can’t get everyone even with the best conversion strategy—it’s just how things work; it’s not personal. The best way to improve your conversion rate is to create specific goals for customers at each stage of their journey. Although your end goal is to increase your revenue, the best way to do that is by improving your conversion rate. However, it shouldn’t be the goal you set in your customer journey map.
10 Ways to Improve Your Conversion Rate
Many business owners often go for the sale right away—and the backlash is usually disastrous. If you do that, you’ve created an idea in the mind of a potential customer that you don’t necessarily care about them; instead, you’re only after their money. This paints a bad image for the business—and damages your reputation in the long run. Instead of doing all that, consider moving your customer through your whole process.
Think of it as a tour guide for tourists.
By moving them through these stages, you get minor conversions that, over time, accrue to the ultimate conversion that finally makes the sale. With that, let’s deep dive into each stage of the customer journey, and discuss what strategies you can use to improve your conversion rate.
The Awareness Stage
Goal: Build an Audience
This stage in the customer journey is where you make yourself known as a business.
Your goal at this stage is to answer questions such as:
- Who are you?
- What’s your business about?
- How can your business help me achieve X?
No one in your industry knows who you are, so your goal is to build enough of an audience around this—and provide knowledge about your business.
Some of the best conversion strategies you can implore at this stage include:
- Creating a blog or vlog
- Social networks
- Public relations
- Creating a Blog or Vlog
The things heard, read, or seen, are the primary structure of human psychology—and it doesn’t change when it comes to marketing. Creating a blog and writing about your product and how it solves your audience’s problem is the best way to grab attention. The main benefit: It gives search engines an easier way to direct your audience to you. Businesses with blogs have 434% more indexed pages than businesses that don’t.
Companies that blog get 97% more links to their website. Below is a quick example of how we at Edgemesh blog to build our audience—including this post you’re currently reading.
Then, there’s vlogging. Depending on the type of business you run, vlogging about your business significantly improves your conversion. If you run a fashion brand and you’re not much of a blogger, then vlogging might be for you. Media channels such as YouTube, TikTok, and Instagram help get the word out for your audience to get to know you.
A practical example of how vlogging has helped businesses build an audience is Jeremy Kim and John Dalsey of Nectar—a hard-seltzer company. In their interview with Business Insider, Nectar started as an idea, and for the first few months, they weren’t getting enough traction locally because not many people knew what they were about. To create awareness, they put together a video on TikTok showing their journey producing the Nectar drink. This video included how the cans of hard seltzer were being filled, sealed, and boxed—along with captions showing the time it took.
- Social Networks
Nothing sells better to a new audience than a business that has a social media profile. The average audience wants a company to have this to allow for more accessible and less stressful interaction. Being able to instantly DM your favorite business on Instagram, Twitter, or Facebook and having them respond to your queries builds the trust and confidence businesses need. The basic idea of the awareness stage goes beyond just having people knowing your business. Instead, it covers using the awareness to build enough confidence in the audience, so converting to customers will be easier. A way to kickstart this as a new business is actively engaging on your social network of choice—retweets, shares, likes, comments on your potential posts—and many more. Do all of this without breaking any of the community guidelines on the social network.
You can take a cue from Harry of Marketing Examples on how he builds an audience on Twitter, for example.
Harry’s primary audience and the potential customer are marketers. He shares real-life case studies of some marketing strategies and shows how fellow marketers could also implement them to get their traction and confidence. Making an example of one of his posts on Twitter, Harry creates a thread showing some of the common marketing mistakes, especially in copy—and shows how to fix them.
After sharing his post, he links his website underneath, which redirects the traffic to his post on his website.
Awareness and credibility!
You can replicate this too for your business. Keep in mind that the best way to get the most of social media is to sound like a human—not a robot.
- Public Relations (PR)
If social networks and blogging are not for you, R might just hit the nail on the head to create awareness. Mostly you’ll hear the acronym PR instead of the public relations—but it’s the same. PR sometimes is considered old-fashioned or archaic in its use. This is due to social media’s rise in the past decade. However, its effectiveness is enormous, especially when done right. As a new business, traditional PR, such as television commercials, print publications, and press releases on key websites that your audience engages in, helps in gaining the traction you need. Here’s another example of how we at Edgemesh get the word out with this publication from Yahoo!.
Meanwhile, most businesses don’t subscribe to the idea of this type of PR because it doesn’t directly impact your sales. PR is more about creating a business’s perception, i.e., it shapes how your audience views your company. As a business owner, you know that people don’t buy products, they buy brands. Investing in how your business is perceived is a great way to establish a path to better conversions. Your PR converts the best as a result of your marketing strategies.
The Consideration Stage
Goal: Be the better choice
Now that you’ve moved your audience from knowing who you are, the next step is why they should consider doing business with you.
A good business strategy isn’t to think that because your product is cheaper, nicer, or overall better than your competitor’s, people will simply rush to you. It doesn’t work like that. You need to actively engage them by showing them how your product or services can help them achieve their goal or solve their problem. Getting them to make little commitments at this stage is a good sign that you’re doing everything right. To do this, create an exchange between you and your audience. Lead magnets are the perfect way to do this.
Lead magnets are a free item, resource, or service you give to your audience with the sole purpose of gathering information about them.
This information mainly consists of email addresses and phone numbers—sometimes both. What leads to your audience giving their information depends on how you approach them. Remember, the goal for this stage is to ensure you’re the better choice in a list of your other competitors.
Getting a customer to provide this information is only possible if you’ve built enough confidence with the awareness you raised in the first stage. To make the most of the consideration stage, create landing pages.
- Create Landing Pages
A landing page is simply a place where a web visitor lands —typically like your website’s home page, only this time, this is tailored to a specific audience to address a particular problem. With a landing page, the copy and images focus on a specific type of audience facing a particular problem or wanting to achieve a specific goal. By addressing this, you make your brand one that puts customers first and is a better choice than the others. However, don’t confuse your home page for a landing page even though they do the same thing. You will hardly ever change your homepage unless the need arises, but landing pages are usually temporary because once their goals are achieved, they can easily be scraped off. To better understand this, let’s go directly to Semrush — A Keyword Research and SEO Tool.
A search for Semrush on Google provides two similar results:
The first one is a Google ad, but with its landing page. This means this ad is tailored to a particular audience. As you click on the ad, it takes you directly to a landing page with a critical headline:
“Grow your online visibility. On all key channels. From just one platform.”
The goal of this landing page is to show the audience how they can grow their online visibility from just one platform without having to integrate multiple others. The CTA (Call to Action) used for the landing page is also specific to the aim of the landing page.
And all they require from the audience on this landing page is to give it a try—no commitment. There’s no point going for the hard sale when your audience is still trying out other options; instead, your goal is to show them why they should choose you. Remember, conversions take processes, not a single-click, fix-all strategy. On the other hand, if we look at the second result, we can see it’s the default homepage.
Unlike the landing page tailored specifically to a single audience, the homepage captures the general audience in its industry. Also, the CTA used is different from the one on the landing page. The type of CTA used on your landing pages and other parts of your website dramatically impact your conversion, especially in the consideration stage.
- Modify your Call to Actions
You’re now in fierce competition with other businesses for the same customer’s attention. Words create actions, and your business’s choice of words is aligned with your conversion rate, whether increasing or decreasing.
Each of these CTAs means different things, and using them in the wrong way can mislead your audience. Your CTA should align with your goal on the landing page or anywhere else. This means you should shy away from using the generic CTA almost everyone uses.
Modify your CTA to highlight the primary goal of the page it’s on. For example, your audience is still contemplating if going with you is the best idea, help them make that decision easier.
The Preference Stage
Goal: To see if you’re a fit
The best way to improve your conversion is to understand that you can’t help everyone. Once that is figured out, the priority is to focus on the ones you can help. The preference stage works both ways in helping you vet the audience as much as they do you. You might have won the battle of being their best choice—or perhaps customers were convinced that you were. However, you have to pre-qualify a potential customer to see if they tick all the boxes in your buyer persona.
If they don’t, it’s best to cut them off as soon as possible. Doing this doesn’t put you at risk as you’re saving time and money that would have been spent serving a customer that wouldn’t enjoy your product. Your goal here is to maximize conversions by focusing on the customer who is the best fit.
Let’s take our buyer persona at Edgemesh, for example:
We know who qualifies as our ideal customer, and we know how to approach him or her. Meanwhile, getting an HR lead wouldn’t be worthwhile to pour resources engaging or nurturing that lead. This is what this stage is for—and drip email campaigns are the best.
- Drip Email Campaigns
Getting customers to take action in the consideration stage means they trust you—to an extent and are also convinced that you’d be of help. That’s why you now have their personal information. Note: Without having customers pass through the consideration stage, no preference stage will happen.
Drip email campaigns are a set of emails you send out to a specific group of users based on specific timelines or user actions.
Here’s a visual example from Snov.io on how email drip campaigns work:
These emails come in batches depending on the way your audience moved from the consideration stage.
The way it’s set makes up for aligning each email according to a user’s actions when they open, close, or try to unsubscribe from the list.
Here’s another example from Send Pulse on how Homeboy Travel Agency does its email drip campaign.
The purpose is to help you identify who needs your product/service and who doesn’t. You’ll track metrics such as bounce rate, open rate, and opt-outs to understand how your audience reacts to different types of emails.
The Purchase Stage
Goal: Get a paying customer/Make the final push for a sale
This is the stage where your hard work finally pays off. It’s where you’re rewarded for all micro-conversions that have happened in all other stages. To make any of this happen, you have to ask. Yeah! It’s time to ask for the sale. If all the other stages checked the box and are in line with your customer journey, making the sale shouldn’t be difficult. But even still, you shouldn’t do it in a salesy manner —but rather with a cost-benefit approach.
Why use the cost-benefit approach?
The average customer needs to hear about a business at least seven times before making the purchase.
Before making the purchase, they think “what benefit does this product or service bring, and at what cost?”
The famous marketing saying, “people buy emotion and judge with logic” comes into play here in the purchase stage.
Your customers care about themselves, not your business. Focus on making sure your product or service solves their problem.
By using cost-benefit as an approach, the strategies to improve your conversion now revolve around how much benefit your potential customer gets. The purchase stage can’t exactly be grouped under one main strategy that makes customers convert. It’s dependent on how the other stages work together—but there are few strategies to seal the deal.
- Follow up on Social Mentions
Following up on where your business gets mentioned or that of your competitor is a complete deal-breaker. The term used for this is social listening—and it’s the process of tracking and monitoring media channels for the mentions of your brand, competitors, product, and anything related. By following up on mentions on social media related to your business, you’re directly in front of customers who already know what they want. These customers have already crossed the other stages and are now in the buying phase, making the sale easy. All you have to do at this point is engage. a company like Xbox—a video game company, makes the best use of social listening in influencing customer purchase decisions.
You can also use social listening on your competitors by monitoring when they get mentioned. Here’s an example from Brand24, a Hootsuite competitor.
If you’d like to try out some other social listening tools for your business, below are 7 we’d recommend:
- Tailor Promotions to Multiple Channels
At the end of the day, getting your audience to the final stage makes no impact if they don’t purchase. Customers won’t simply whip out their cards and buy from you. You have to be un-annoyingly persuasive in your ask. A way to do this: tailor your promotions across multiple channels.
Let’s say you have the data from your Google or Facebook ad detailing users who already showed interest in your business. This data can be anything from email opens to users who add your product to their cart, depending on the purpose and goal of your ad.
All you’re after is people that have shown interest to a certain point. Creating a new ad focusing on those sets of people from your data gives you a better chance at making the sale. Spread this ad on the channel you used for the first ad, and repurpose it across other media they might be on. A duo like Facebook and Instagram or Google and YouTube are perfect combinations for this.
Here’s how Agorapulse combines Facebook and Instagram:
Both ads are the same, targeting the same audience, but on different channels. The primary goal of this ad is targeted toward an audience that has already shown interest in understanding the reason behind Instagram banning 3rd party tools. This ad aims to address potential customers who have already decided to use a 3rd party tool to manage their Instagram account. However, they are having doubts due to the news coming from the Instagram ban. This ad clears the doubt of the potential customers—and in turn, pushes them to become customers of Agorapulse.
And you can do the same.
Goal: Turn your customer into fans
The cost of getting new customers is higher than the cost of retaining the ones you have. Statistics from Harvard Business Review show that acquiring a new customer is anywhere from 5 to 25X more expensive than retaining new ones. And when you look at the success rate of selling to a customer you already have, it’s between 60-70%, while selling to a new customer is around a 5-20% success rate.
As a result, it makes sense to focus on customers who already bought from you instead of chasing those who haven’t. But keeping them as customers isn’t enough; you’ll want them as fans instead. Fans are what makes your customer base, which in turn creates a pillar on which your business stands. It’s why 65% of a company’s business comes from existing customers and why loyal customers spend 67% more compared to new ones. So how do you use the loyalty stage? By creating loyalty programs that increase the loyalty of your existing customers. The aim of creating loyalty programs stretches beyond increasing your retention rate. It also helps in other areas such as:
- Increasing customer lifetime value
- Building better customer-business relationship
- Improving customer satisfaction
- Boosting revenue
- Reducing customer acquisition cost
- Encouraging word-of-mouth marketing
And 2 of the best loyalty programs that provide excellent results for many businesses are point rewards and game-based programs.
- Create a Point Reward Program
Point rewards are by far the most popular loyalty program because they work. They work by giving customers redeemable points based on the amount they spend on your business. So, for example, if you purchase $200 sneakers from an ecommerce store, and you get rewarded with 50 points which might be equivalent to $20. If you purchase more of these sneakers from these stores and get rewarded every time, you can use the points accumulated to buy from that store—this time without having to spend cash. Although the terms used for these reward points differ depending on the business involved, they are mostly the same.
A typical example is The North Face, an online retail store for exploration gears and fits.
For The North Face’s points reward program, customers get 10% off their first online purchase.
They also went ahead to give a detailed breakdown of why you should buy more of their gear for your next adventure.
By rewarding customers with points, you’re increasing your average order value and, at the same time, making them feel like they are part of the brand. Doing this reduces the chances of that customer switching to a competitor.
- Initiate Game-Based Programs
The recent introduction of a game-like reward program into loyalty programs adds an element of fun for customers and businesses.
Starbucks is a good example.
Coming from the default point reward program, Starbucks rewards customers with one point for every purchase, regardless of spending. This means that even low spenders get to partake in the reward without having to spend much. Starbucks understands that some customers spend more during shorter periods and reward them with two stars for every dollar spent. Starbucks further introduced a tier component that expands the point program in a way that allows all types of customers to redeem their points beyond just a cup of coffee. This time, customers can go for other things such as an espresso shot or merchandise of their choice.
On a Final Note
Now you have all you need at every stage of your customer journey to make the best of your conversion rate. Remember, the concept of conversion is by making smaller conversions at every stage until it builds into a complete one. This means taking conversion as a journey and carefully walking your potential customer through every stage. By doing this, you get good conversion and a loyal fan base.
If you made it to the end of this article, that means you’d be interested in the rest of this series.
Below are related articles we think you’ll find helpful:
- What are the steps of Conversion Rate Optimization?
- What is CRO Marketing?
- All You Need to Know About Conversion Rate Optimization.
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