Understanding and Utilising the Three Most Important Rules for Successful Conversion Rate Optimisation

It has become pretty standard knowledge that conversion rate optimisation is needed in order to maximise the profitability of websites. However, it is now time to take it a step further and optimise the existing optimisation practices. It’s no longer good enough to just test. You have to test the right things, at the right times. What does that look like? It means looking at the way testing is done, how tests are chosen and the frequency of tests- then you can drive the best results.

 

In this article, we will cover the win rate, testing frequency and average value of wins. When these 3 are multiplied together, they equal the annual revenue through CRO. Let’s examine what each factor is, and how you can improve on it.

Improve Your Win Rate

The first factor involved in creating a more successful conversion rate involves your win rate. It is the percentage of total experiments which make a positive impact on your conversion rate. For example, if you do 10 different tests, and 5 of them come out with positive results, your win rate is going to be 50%. The other 5 can be split into neutral and negative in any form, and your win rate will remain at 50%. When your tests result in a conversion rate improvement, you are increasing your revenue and improving the user experience for your customers.

So clearly the goal is to be aware of your win rate, and increase it to as close to 100% as possible. In order to do so, you need to run tests that are likely to be successful. To increase the likelihood of success, tests should be based on data from digital insights along with input from customers and any marketing departments. Testing just because someone told you that “testing is important” or a best-practice, will not be very helpful. It is also not efficient to test based off of opinion or feeling.

A strategic plan needs to be formed in response to data which will guide you to take action in response to where a website’s opportunities lie. For example, if one web page is showing a sharp drop off in sales, testing a variation of that page can make a substantial difference in plugging a revenue leak. By testing wisely, you can reduce any negative impact on your visitors, improve your win rate and make more money.

Optimise Test Frequency

Next up is the testing frequency, or how often you are running tests. In order to optimise your test frequency, you simply need to run more well-researched tests. By completing more, you are going to have better chance at getting positive results; the ultimate goal here.

There are several ways to optimise your test frequency. First, it can be done by testing different areas at the same time. This can be your homepage and your checkout page for example, but you want to make sure they don’t conflict with each other. By doing so, you can get more results, in a shorter amount of time.

Next, it is important to set deadlines for your tests so they don’t drag on forever. Ideally a test runs around 14 – 21 days, and each variation should see at least 150 conversions. This allows you to keep your momentum going, while also reaching a significant amount of people, which is needed for reliable results (read the 15 a/b testing rules here).

Lastly, jump in with both feet. You don’t want to be afraid to test something, which many companies surprisingly are. Just take some time to research the potential tests beforehand and then don’t hesitate. There is a fine line between taking a chance with a researched test (good), and running a test on a guess (bad). While you don’t want to sacrifice your win rate, if you don’t test frequently enough, you won’t make enough of the changes needed to truly optimise your site. Once you have you’ve your research, plan out several tests you would like to run, and do so consistently according to plan.

Increase Value of Wins

Last but not least is increasing the average value of your winning tests. Why is this important? The higher the increase in revenue earned due to a change, the more money you make. As a business owner or marketing manager, this is the ultimate goal. To find the annual average, all tests throughout a year would be added together and divided by the amount of tests performed. So, how do you increase this number?

First, look for places in your digital analytics where money is being lost. Put your focus on figuring out any reasons why the funds are dropping off. Whether this is your homepage, or any pages inside of the site, test to keep the flow of customers moving to the checkout.

Another tactic is focusing on your highest traffic areas. Figure out how you can increase value where customers are already going.

Lastly, upsell, upsell, upsell. However, do so tactfully. A great way to upsell in a way that is well received, is by making personally relevant recommendations based on customer’s shopping preferences. This can be anything from a free email newsletter, to an accessory or additional product at a discounted rate. For example, if a customer is purchasing a pair of shoes, offer them a pair of socks that go great with them. When a customer is already saying yes, they are more likely to say yes again.

All of these can be implemented to increase the value of wins.

Compounding Effect

Now that you better understand your win rate, test frequency, and win values separately, it is time to put them to work together. Sure each one can give you a certain amount of profitable results. However, when compounding them together, you are going to see the biggest impact. You will not only be testing based on data which shows what needs to be fixed, you will also be focused on increasing value and doing so on a consistent basis. With this approach, you are sure to see your overall revenue from CRO rise.

You now have the pieces you need to take action and improve your conversion rate. Optimisation can be broken down into a science with the help of analytics, and in order to stay ahead of the competition, you will need to be on top of your game. By delivering on these three factors of annual revenue through CRO, you have the equation for success.