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What is conversion optimization?

Did you know that almost every big online company practices conversion optimization? This profession has been around for a while but more and more companies are using it to grow their business. 

A 2017 study by Econsultancy shows that companies find that conversion optimization is more important every year.

Importance of conversion optimization

It’s less crucial but that makes sense because it isn’t the basis of a company. Before you start optimizing you need to make sure the crucial parts of your company are in order. In an e-commerce organization, this would be your customer service and logistics for example.

Some people fail to grasps the importance of conversion optimization because they don’t understand it’s meaning. What follows is a company that doesn’t improve its service and stays behind in the market until they are finally extinct.

In this article, I will start by describing what conversion optimization is and how it is defined. Then I want to describe why conversion optimization is important and the goal of practicing it. 

Furthermore, I want to describe how to achieve those goals and why data-based decisions are important.

After that, I will describe what kinds of results you can expect and when you should consider starting conversion optimization. I will also describe if you are ever done optimizing and what kind of people are conversion optimizers. 

Finally, I will talk about the skills that conversion optimizers possess and where you can start learning about becoming a conversion optimizer yourself.

What is the definition of conversion optimization?

CXL defines conversion optimization like this: “Conversion optimization is the systematic process of getting more visitors to take a specific desired action”

An important word here is the process. Conversion optimization is ongoing and follows a strict process to have the highest chance of getting results. Which is getting more visitors to take a specific action like buying products or clicking on a specific element. The action depends on your test and will require to be tracked by testing software for analysis.

You could say that conversion optimization is done by a conversion optimizer. But there are a lot of similar terms for conversion optimizer. CXL made a great list of names that people use to describe a conversion optimizer:

  • Analyst
  • Conversion Optimizer
  • Conversion Specialist/Consultant/Strategist
  • CRO Specialist
  • Director of Optimization
  • Director of Marketing
  • eCommerce Manager
  • Digital Marketing Analyst
  • Growth Hacker / Head of Growth
  • Marketing Manager
  • Online Marketing Specialist
  • Optimization Specialist
  • UX Analyst
  • Product Manager
  • Web Analyst

Econsultancy asked a bunch of companies what the most effective conversion optimization strategy was for them and generated a word cloud based on the results. This can give you an idea about all the subjects that surround conversion optimization.

Wordcloud about conversion optimization

Want to learn more about conversion optimization? Then check out this guide on Udemy about growth hacking & conversion optimization.

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The NEW 2020 Complete Growth Hacking & Conversion Course

  • 5x your existing growth and conversion rate
  • Add 1,000s of leads and subscribers to your list
  • See where your visitors are dropping off and how to fix it
  • Bring cart abandoners back to your site and guarantee 10x ROI
  • Introduce virality into every aspect of your marketing campaigns
  • Price your product or service using 30+ rare techniques
  • Optimize the 1 goldmine on your site you probably pay no attention to
  • Create high-converting landing pages and CTA buttons
  • Test every element on your site for performance
  • Use sales psychology to increase transactions and your prices
  • Write copy that gets attention, clicks, and generates sales
  • Use screen recordings, heatmaps, and your visitors’ actions to increase profit
  • Make your pages load faster and improve your rankings in the search results

GrowthPenguin is reader-supported. When you buy through links on our site, we may earn an affiliate commission.

Why is conversion optimization important?

Conversion optimization is important because it can lower the costs of getting customers to your product or website. It does this by increasing the value of users on your platform by improving the user experience. This makes a company able to grow and generate even more revenue.

Another reason is that you can carefully test and manage changes that could otherwise have the risk of dealing a lot of damage to your revenue.

“Ten years ago, we believed that eventually, all companies would realize that CRO is crucial. This is turning out to be true but not in the way we expected. It’s not that all companies eventually see the light; it’s that the ones who don’t get pushed out of existence, Darwin- style.”

Ben Jesson, CEO of Conversion Rate Experts and author of Making Websites Win

What is the goal of conversion optimization?

The goal of conversion optimization is to get more visitors to take a specific desired action as the definition of the terms describes it. These actions can vary depending on the company that you are working for but are usually getting more sales, leads & clicks.

By testing the hypothesis, you want to reach a significant result that will generate more revenue than the costs of running the process. By targeting big drop-off pages with a lot of traffic you can do this very easily when you reach a statistically valid positive result.

That’s one of the problems. Reaching this kind of result can be extremely challenging when you don’t take the correct steps to maximize the chance of getting it. On average only 10 to 15% off all the tests will reach statistical significance according to Invespcro. So it’s extremely important that you at least match this percentage because tests can take 2 to 4 weeks to complete.

But don’t worry because most companies have seen improved conversion rates because of running this process as seen in this study by Econsultancy.

Increase in online conversion rate

By optimizing your process and proper user research into the actual problems and struggles that users have with the platform you will be able to come up with a winning hypothesis more frequently and increase the growth rate of the company.

Structured approach to increasing conversion rates

Most companies don’t have a structured approach to improving conversions rates as shown by a study from Econsultancy and this is one of the problems. Most companies need one if they want to be more effective.

Structured approach by level of performance

The same study by Econsultancy shows that most of the top-performing companies have adopted a structured approach to conversion optimization.

I was able to manage a success rate of 15% by following strict rules and guidelines I collected and used from online resources like CXL. I was also assisted by someone that had more experience with conversion optimization to help me get started in the right way. This helped me a lot and I would recommend people to do the same because conversion optimization is harder than most people would initially think.

How can you achieve this goal?

Achieving this goal will require someone who knows a lot about conversion optimization to guide the process. You will need to research to get insights for testing and developers for creating and implementing changes to your platform.

Another important aspect is time. Conversion optimization is a long term strategy that requires a lot of patience and money to see results. Usually, the results will pay for the costs when you are preparing your tests in the right way.

Be prepared to fail a bunch of times but keep trying to run tests and reaching statistical significance. The rush of winning tests is incredible and one of the reasons this trade is so exciting.

You are changing a product based on research and the effect of the change will have a measurable effect on the revenue of a company. This makes this kind of work very gratifying for the optimizer and easy to keep doing for years. So keep at it and you will eventually increase your conversion rate.

Why should you only base your decision on data?

You should base your decisions within conversion optimization based on data because you want to increase the chance of getting successful results. By basing every action on real-world data you have a way bigger chance of getting these results than just testing a couple of best practices. 

You could test the sizing of your prices for example because you have seen a best practice where bigger sizing gave an increase in conversion rate. This does not mean this will work for your website because the target group and the visuals of the website will be different. You need to test changes that are made for your target group and your website.

Another big reason is the risk of making a change that negatively affects your conversion rate without you realizing it. You want to test all your changes and base the implementation decision on your results. 

There have been companies that made changes without testing them and this has cost them a fortune. I know this because I have had results where the effect would be significantly worse and you could see exactly how much money you would lose if it was implemented. 

By testing, the change only had an effect on 50% of your target group during the test duration which is usually acceptable but something to keep in mind when evaluating your costs.

This means that opinions don’t matter in this field because you can base everything off data. Don’t let anyone tell you otherwise to push their personal needs above the company’s performance.

What can you achieve for companies?

This really depends on the size of the company and the potential of a significant test. You can easily calculate what a potential test could yield by using the CXL pre-test calculator.

CXL AB test calculator

By inputting your weekly traffic, conversions, and variants you can see the minimal detectible effect needed for a significant test. With our dummy data here you can see that you will need an increase of at least 10,96% with 4 weeks of testing to reach a statically valid result with acceptable risk.

If you want to find out how much extra money that would be for an e-commerce organization you could fill in fake test results based on this increase in the test analysis tool of CXL. 

In this example, this would be 6200 a month based on 248 extra transactions. This number becomes bigger and bigger when you have more traffic to test with. It will then be a lot easier to reach a significant result because the change doesn’t have to be as big.

When should you start optimizing?

You should start optimizing your website when the potential extra revenue is a lot higher than the costs of developing your tests. Remember that only about 10 to 15% of your tests will be successful on average so keep that in mind when looking at the revenue. 

It will probably take a growth hacker a couple of days to set up a test. Imagine that cost of that would be around 500 euro’s to set up the whole test. Compare that to 10% of your potential revenue of the test and if this is higher you can start optimizing. 

In the first example calculation, you can see that 10% of 3000 is a potential of 300 euro extra per 10 tests. This means the cost(500) would be higher than the potential revenue per 10 tests(300). 

In the second example, this potential revenue per 10 tests is a lot higher(2600) for the same costs so optimizing would then start to be interesting.

The increase in revenue is a monthly extra so if you wait long enough it will most likely yield enough to justify the cost anyway so that’s something to think about.

It’s also important that you have the basics of your product or service in order before testing changes. If you know that certain pages will change drastically in the future then all your testing efforts will be in fain. You should be well established online and have developers to support you if things go wrong.

When are you done optimizing?

You are never done optimizing because you can’t have the perfect website. The world, people, products, and competitors change and this will affect your website. You need to make sure you keep optimizing and trying the newest technologies and changes to stay ahead of your competitors and making your product better for your target group.

What kind of people practice conversion optimization?

People that drive change and get excited about trying new things that could have a positive effect on the product. They love sharing their results and always keep a critical view on business affairs. 

Optimizers are analytical and technical because they are working with new tools and software to test their changes. It’s important that these people read about user experience trends and are good at listing to other people because they are changing the product for real people. 

They are a bridge between the designer and the developer. Usually, these people are good at both professions because they need to combine them. Some optimizers are interested in the way a human mind works and how you can use that to remove user frustration and increase conversion rates.

Some people that could fit this description would be on the CRO personality of the year shortlist:

  • Kathryn Harriman (The Recount)
  • Tom van den Berg (Online Dialogue)
  • Johann van Tonder (AWA Digital)
  • Prof. Dr. Tobias Aubele (University of Applied Sciences Würzburg-Schweinfurt)
  • Sandeep Shah (Webtrends)
  • Ricardo Tayar (Flat 101)
  • Marianne Stjernvall (TUI)
  • Enrico Pavan (Analytics Boosters)
  • Elise Maile (Survey Monkey)
  • Matt Dawson (Brandwatch)
  • Guido Jansen (CRO Cafe)

What subjects do conversion optimizers have experience with?

  • HTML
  • CSS
  • JavaScript
  • Google Tag Manager
  • Google Analytics
  • Google Optimize
  • Psychology
  • Design
  • User experience
  • Writing
  • Presenting
  • Project management
  • Online marketing
  • SEO
  • Personalization
  • Testing methodologies
  • User research methodologies

And this list can go on for a long time but to summarize it you could say that conversion optimizers have experience with front-end development, user experience design, and online marketing.

Where can you learn about conversion optimization?

A lot of places because most optimizers consider themselves to be really good at what they do so they start teaching other people. This doesn’t necessarily mean they don’t give good advice but you can be taught the wrong way (me included). None the less, my website has a bunch of topics to get started with conversion optimization for beginners and can help you without spending any money.

That will only get you so far so it might be a good idea to follow some kind of course from a good institution that can help you get ahead. Two obvious choices I would urge you to consider are CXL and GrowthTribe.

You can also check out this guide that has been followed by almost 10.000 people on Udemy.

Udemy logo

The NEW 2020 Complete Growth Hacking & Conversion Course

  • 5x your existing growth and conversion rate
  • Add 1,000s of leads and subscribers to your list
  • See where your visitors are dropping off and how to fix it
  • Bring cart abandoners back to your site and guarantee 10x ROI
  • Introduce virality into every aspect of your marketing campaigns
  • Price your product or service using 30+ rare techniques
  • Optimize the 1 goldmine on your site you probably pay no attention to
  • Create high-converting landing pages and CTA buttons
  • Test every element on your site for performance
  • Use sales psychology to increase transactions and your prices
  • Write copy that gets attention, clicks, and generates sales
  • Use screen recordings, heatmaps, and your visitors’ actions to increase profit
  • Make your pages load faster and improve your rankings in the search results

GrowthPenguin is reader-supported. When you buy through links on our site, we may earn an affiliate commission.

Conclusion

Conversion optimization is a broad subject and arguably not able to defined within a single blog post because there are so many aspects to it that I have not covered.

I still hope that this article gave you an idea of what conversion optimizers are and piqued your interest in finding out more. If you liked this article you can consider sharing it on social media or with your colleagues.

Any questions can be left down in the comments below. If you want to start setting up your first test you can check out my other guide about Google Optimize.

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