Although conversion rate optimization benefits do include a massive ROI compared to similar investments in SEO, PPC, SMM or even Content Marketing, let’s get the bad news out of the way first:
Conversion Rate Optimization (CRO) Isn’t for All Sites and Won’t Always Generate a Great ROI
In fact, smaller sites with less than 100 unique visitors per day are probably not going to see a positive ROI from a CRO investment for 2 primary reasons:
- Total Sales Volume Won’t Increase Significantly Even with a Massive Boost in Conversion Rate
Let’s say Website A has a daily traffic volume of roughly 50 visitors per day and is selling a $40-$80 windchimes with an average sale price of $55 and a 1% conversion rate. That means they are generating 15 sales each month or roughly $825 in total sales. Now even if the conversion rate is doubled to 2%, then the gross revenue increase is only $825 each month. But, when you factor in fulfillment costs (their cost for each windchime), net profits might only increase $400.
Now over the course of a year, yes, that adds up to $4800 in additional profits but that doesn’t take into account the initial cost of optimization. And that brings me to my next point:
2. Professional CRO Services Aren’t Cheap
Yes, conversion rate optimization benefits can take some businesses to the next level, but at a fairly steep investment of both time and money. The fact is that optimizing a website for poor conversions can involve the services of a wide range of well-paid website experts, including:
- Direct Response Copywriters
- SEO and Social Media Experts
- PPC Optimization Experts
- Website Designers
- 1 or more Web Programmers (HTML, Word Press, MYSQL, and other specialized experts)
- Shopping Cart/Order Fulfillment Experts
- User-Interface Experts
- Website Analysts and Heat Mapping Experts
Now, not all these experts will be required on all CRO projects nor will their services be required for the full duration of the job. However, when you consider that these are all highly skilled experts and that most optimization projects take 4-6 weeks to complete and verify results, it does add up to a significant financial investment. For reference, however, a CRO project typically will be about the same investment as a serious SEO or Content Marketing campaign.
However, please don’t misunderstand: A smaller site can still enjoy conversion rate optimization benefits but the only catch is that they will have to optimize themselves to make the exercise truly profitable. But hiring a CRO firm with less than 100 uniques a day will almost always generate a low or negative ROI unless the firm happens to be selling high-priced products or services and have very targeted traffic. Otherwise, the numbers just won’t add up.
But for websites with more than 100 unique visitors a day, the ROI from CRO services quickly adds up and exceeds competing investments like SEO, PPC, Content Marketing or SMM. Let’s see why.
Here’s How Conversion Rate Optimization Benefits Blow Away Similar Investments in SEO, PPC, or SMM
#1: CRO Delivers a Growing ROI vs. a Static ROI
Let’s say you invested $1,000 in SEO, PPC, and Social Media Marketing respectively. Now the ROI from your investment will taper off almost immediately with PPC because the minute you stop buying clicks, your sales basically dry up. Sure, some will come back a few days later and thus drive up the ROI a little more, but that’s it–no more ROI and no more sales.
For SEO and Social Media Marketing (SMM), the ROI will continue to grow after ceasing investment and far exceed that of PPC–at least if the keyword targeting and execution are good. However, within a few weeks or less, the traffic will ultimately dry up along with the sales at which point the ROI stops growing.
But conversion rate optimization benefits like increased conversions continue driving up the ROI for months, if not years, after the job is complete for a couple of key reasons:
1. CRO Permanently Fixes Conversion Problems: A conversion rate optimization company uses website traffic analysis and heat mapping software like Clicktale to isolate the hidden problems that are suppressing your online sales. Just a few of the problems that are permanently fixed during an optimization project include:
- Shopping Cart Configuration Issues (improper calculation of shipping charges, wrong tax rates being assessed, etc.)
- Web Navigation Problems (too many links, wrong placement of links, etc.)
- Marketing Funnel Problems (no transitions on traffic generating content, poor home page design, etc.)
- Weak Traffic Sources and On-Site SEO Problems
- Weak Direct Response Copywriting Tools on Main Conversion Content (sales pages, product descriptions, etc.)
- Inconsistencies in Sales Funnel (offer changes on different pages of funnel)
- Poor Web Programming (slow load times, dead links, glitching UI features)
Once the problems are fixed, the conversion rate will increase for long after the project is done but things like new competitors and changes to your business model will slowly eat away at those gains.
2. Conversion Rate Optimization Benefits Carry Over to Your Other Traffic Generating Investments
Once you complete the CRO project, one of the biggest side benefits is that it will help make virtually all of your Internet Marketing investments more profitable. So if your PPC campaign generated $2,000 a month in profits, than a 30% increase in conversion rate could boost your revenues by $600 without investing another dime. The same is true for SEO, SMM, Content Marketing, and even Email Marketing campaigns.
#2: Conversion Rate Optimization Benefits Come with No Recurring Fees or Monthly Charges
The biggest thing that kills the ROI for SEO, PPC, Content Marketing and SMM is that all these options require you to invest in more traffic to generate more sales. So to increase your sales revenues by $5,000 a month, you might well have to spend $2,000 each month on PPC and similarly for most other Internet Marketing investment options. That takes a huge chunk out of your online profits and devastates the ROI.
But conversion rate optimization benefits keep rolling in long after the project has been done and paid for. There are no recurring fees, monthly management fees, or any other costs so all those additional conversions are sheer profit once fulfillment costs and overhead are covered.
#3: CRO Services Typically Reduce Marketing Costs
To be clear: Conversion experts boost online sales by fixing the problems that are suppressing sales, not by increasing your marketing budget. In fact, if the website has a significant percentage of paid traffic, one of the best conversion rate optimization benefits is a reduction in marketing costs which leads to even greater ROI.
So how do you get conversion rate optimization benefits like reduced marketing costs when the service is designed to boost conversion rates?
Well, during the website traffic analysis, CRO experts will review paid traffic sources and look at the individual conversion rates for each targeted keyword. In a big enough sample and depending on the number of targeted keywords, you can quickly identify which terms are converting and which are just wasting precious marketing dollars. Then, the CRO experts eliminate the non-converting keywords which lowers paid marketing costs without any negative impact upon sales. So technically, the conversion rate optimization benefits are indeed higher conversions but via the elimination of non-converting traffic.
Of course, the website must have their website analytics software configured to track conversions down to the keyword level but some platforms like Google Adwords will also provide this functionality.
Concluding Thoughts on Conversion Rate Optimization Benefits and Overall Impact on ROI
If traffic levels exceed 100 unique visitors a day, then CRO delivers far greater ROI than competing Internet Marketing options. By providing growing ROI by permanently fixing conversion problems, no recurring fees, and helping improve the conversions on other Internet Marketing investments, CRO services are one of the best investments any website can make. Companies like Facebook, Sony, Netflix, and even Google itself have all reaped the conversion rate optimization benefits by hiring CRO firms to optimize their sites–isn’t it time you at least looked into doing the same?