Conversion Rate (CVR) is one of the most powerful levers marketers have to generate revenue more efficiently. While conversion rate optimization (CRO) has an entire suite of options, marketing teams can also improve conversion rates to improve efficiency.
Read more below or listen to Ben walk through Low Conversion Rate (CVR) and its treatments:
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Low CVR Symptoms
Conversion rates below vertical averages (ecommerce average is ~2.5%)
High cost per order (CPA)
High cost per new customer (CAC)
Small share of revenue coming from new customers
Customers prefer to buy on other retailers (Amazon, Nordstrom, etc)
Treating Low CVR
Many of the treatments in the High CAC section are applicable here.
CVR vs LTV analysis: to determine whether or not the CVR dip has a net negative impact on the business. If the dip in CVR is due to a price increase or higher AOV the increase in LTV may actually result in either a neutral impact or increase. If the result is an increased LTV that is at a higher ratio than the loss of new transaction volume then you can discuss increasing the CAC threshold to offset the volume loss and capitalize on the higher LTV.
Dedicated conversion rate optimization initiative: complete a conversion rate optimization audit and assessment.
Improve traffic quality: identify and audit all sources of traffic. Is traffic from one channel particularly poor in quality (low time on site, high bounce rate, low conversion rate, etc)? Diagnose if there are bots or fraudulent spam traffic coming to the site and filter out in CVR calculations. Ensure that traffic channels are driving to a relevant landing page for that audience and creative.
Focus audience on ideal customer profile: reduce broad exposure or mass reach campaigns, and narrow down to customer sets that are most likely to convert. Be careful that this does not invalidate larger business objectives, such as mass awareness or retargeting engagement campaigns.
Post purchase up sells: deploy a “customers who bought that also bought this” at the end of conversion journeys. These have no negative impact on CVR but can increase the AOV and get an immediate “second purchase” in the same session.
Clear bottom funnel creative: don’t use vague, brand-focused, or education-focused creative for driving direct response. Ensure that creative is built and optimized to call to action with a conversion oriented message. Continue to test and optimize creative by funnel stage for conversion rates.
Optimize for conversions: don’t optimize toward pROAS or revenue if the goal is to improve conversion rate. Initial AOV or ROAS might go down, however if conversion rates increase then retention marketing might also improve. At times, optimizing toward a “higher funnel” conversion, such as an Add to Cart, can help improve overall conversion rates.
Media testing and optimizations: focus on media that incrementally drives customers to the business. Deploy a testing roadmap with specific question, hypothesis, and structure to glean results. This can be done in conjunction with CRO to determine what efforts in marketing actually drive the best blended CVR.