Updated November 14, 2022

Seo Optimization for website with mobile website and Landing page virtual diagram.hands using laptop and holding credit card as Online shopping concept

Every digital marketer knows that some marketing dollars perform better than others. The Pareto Principle is often applied in marketing to describe the fact that 80% of your results tend to come from 20% of your advertising spend. What if you could more than 10X your ecommerce revenue without spending an additional dollar on traffic by reallocating your marketing budget from your lowest-performing campaigns and applying it elsewhere?

Conversion rate optimization makes that kind of growth possible.

In this post, we’ll explain how conversion rate optimization works and provide an example of reallocating your budget to drive efficiency and high returns across your online and offline marketing spend.

What Is Conversion Rate Optimization?

Ecommerce conversion rate optimization is the practice of making incremental improvements to a website in order to raise its conversion rate. At ROI Revolution, we continuously test for opportunities to reduce friction points in the user journey. We ideate, build, and launch A/B tests that pit the existing website against a proposed new design treatment, feature, or verbiage by sending half of site traffic to the original version and half to the variant.

After running an A/B test using a platform such as AB Tasty, Optimizely, or VWO, we perform detailed data analysis and recommend only site changes that prove to have a statistically significant positive effect on the site’s conversion rate.

Paid Advertising + CRO: A Perfect Partnership

Conversion rate optimization is the ideal partner to your paid digital marketing efforts. If you are making investments to bring more traffic to your website through paid search, social media, email/SMS, and SEO, why not amplify that investment and increase your ROI by running A/B testing to convert more of that traffic?

Intelligently Reallocating Your Marketing Budget

Whether your marketing budget is stretched thin or you have plenty of resources to work with, a smart reallocation can pay dividends.

One tactic to consider is shifting some of your lowest-performing paid advertising dollars into conversion rate optimization. That same amount of investment will create much more growth when applied to A/B testing to drive conversion rate growth across your site.

For example, the starter level of ROI’s conversion rate optimization service includes full test ideation, development, launch, and post-analysis for two tests per month. If you took the lowest-performing dollars from the bottom of your paid search budget and devoted it to our conversion rate optimization service, you would see a multiplying effect on that investment. Those dollars will work harder and smarter for you when applied to A/B testing and making improvements to the site itself.

To illustrate this point, we analyzed actual data from ROI Revolution’s clients who are on both our paid search and conversion rate optimization services.

Within this cohort of clients, the average return on ad spend (ROAS) of the bottom $6,500 (as an example) of paid search investment was 68%. That small amount of spend on the low end of performance lost money, even in these well-optimized search advertising programs that are highly profitable overall. Across the same client group, the average conversion rate lift of their first winning test was 13% with an average projected monthly revenue lift of $72,706. That’s an average of 1,119%, or 11x, ROI on their first month’s investment with just one winning test!

The tests that drove this growth spanned a range of page types and test treatments. Some examples of the UX and messaging improvements we tested were making CTA buttons sticky, adding visual navigation to the homepage, and highlighting trust signals in the checkout flow.

Reallocating Your Marketing Budget to Drive More Conversions: A Win That Keeps on Giving

Looking beyond the first month of testing, conversion rate optimization continues to provide value since the improvements remain on your site. To project yearly revenue increase, we use a conservative model of decay that assumes the impact of winning tests will decline over time as users become accustomed to new features and your competitors adopt them.

Using this model, the average yearly revenue increase from our clients’ first winning test was $472,590, or 7,271% ROI. Compared to the one-time revenue generated by a paid search click, A/B testing’s 73X ROI on the initial $6,500 investment stands out as a better way to spend your brand’s marketing dollars if you’re looking for efficiency.

Getting Started With Conversion Rate Optimization

Are you ready to give A/B testing a try? The two prerequisites for a successful conversion rate optimization program are:

  1. Enough website traffic
  2. The developer bandwidth to permanently implement winning tests

To collect enough data for a statistically significant test result in a reasonable amount of time, you generally need to have a minimum of 100,000 sessions per month on your site. You’ll also want to be sure your dev team can prioritize implementing winning tests permanently on the site, so you can continue to reap the benefits of your wins once the tests have concluded.

If your business meets the requirements above and you’re ready to see the dividends of conversion rate optimization, the conversion rate optimization team at ROI Revolution is here to help. Connect with an expert to explore opportunities to convert more of your website’s traffic and maximize the return on your marketing budget.

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