Marketing is tough.
Particularly in today’s world. The pressure to deliver sales and ROI through your digital channels is high and is continually increasing.
I use to compare monthly targets to that movie The Imitation Game where, just as you think you’ve cracked the code, a new month starts. Your stats reset and you have to achieve a new set of targets.
It was this feeling of 30-day performance windows that really caused me to pause and look beyond the current month. I wanted to find some tactic, some strategy that could create long term value for the companies I was working in. Some type of exercise where a single unit of input today could deliver output for years to come.
In my high school days I learned about the principle of compounding interest. If you’re not familiar with compound interest it’s basically the snowball effect of money invested that’s earning interest. It’s a virtuous circle. Your initial investment creates interest earned. Your interest earned increases the total amount of money in the account. The more money in the account the more interest you earn, and so on and so on into a hopefully comfortable retirement.
When thinking about input versus outputs, an amount of money invested today, all things going well, delivers increasing returns to you for decades to come.
With the increasing pressure for Marketing to deliver returns to companies, I wondered if there wasn’t some kind of ‘compound interest’ in the marketing world. Some effort or exercise that could iteratively and predictably improve the returns of marketing spend.
Then I discovered Conversion Rate Optimisation (CRO).
The heart of the tragedy of how unknown conversion rate optimisation is as a discipline in South Africa is the fact that it’s the one marketing activity that every business operating in a competitive market absolutely has to be carrying out.
The reason I believe so deeply in conversion rate optimisation is because it holds that same magic of compound interest: a virtuous circle.
The virtuous or self-heightening circle of conversion rate optimisation.
Starting at 12pm on the above cycle. Those that embark on a journey of optimising their website conversion rates (or allow us to assist them in doing so through our approach) see an iterative and provable increase in conversion rates.
Increasing revenue per visitor
When your conversion rate increases, simply put, you may go from having 1 in every 100 website visitors purchase your product (1% conversion rate) to having 3 in every 100 website visitors purchase your product (3% conversion rate). This is the goal of conversion rate optimisation and what we help our clients do at Conversion Rate Pros.
The effect of this conversion rate increase is that your revenue per visitor, as an average, increases.
If your product costs R10 ad you have a 1% conversion rate:
100 visitors = 1 sale = R10
After improving your conversion rate from 1% – 3%:
100 visitors = 3 sales = R30
Thus, your revenue per visitor has increased from 10c to 30c.
So without increasing your marketing spend or website traffic, you have increased your revenue.
I’m tempted to act like a preacher and say that again, for effect.
So without increasing your marketing spend or website traffic, you have increased your revenue.
It’s a pretty unbelievable outcome that is so ‘magical’ for marketing professionals that most assume there’s no real way of achieving this. Often we believe the only way to scale our revenue is through scaling top line marketing budget. This has never been the only way, and it certainly isn’t even the best way during the covid-19 pandemic.
Lowering your cost per click
Generally, when your conversion rate increases it sends a clear signal to your advertising platforms (Google, Facebook etc.) that users are finding what they are looking for on your site. This will cause your quality score type metrics on your ad platforms to increase. Organic and advertising platforms like to know that they are sending users to a site where they are likely to find what they’re looking for. Your improving conversion rate sends a good signal back in this regard.
With increased quality score you generally have lower cost-per-click. This is the advertising ecosystem’s way of rewarding websites that are providing value to the users they send over.
With lower costs per click you can now afford more traffic.
Afford more traffic & a higher data rate
One of the key elements of conversion rate optimisation is website traffic. The more you have, the easier it is to collect the necessary data we need to ascertain whether one version of your page is better than another. Because your CPCs have decreased, you can now buy more clicks for the same marketing budget.
The volume of clicks we have is equivalent to the amount of data we have to work with (data rate). With more clicks, it’s easier to test and get results from those tests.
With faster and easier results it becomes easier to increase conversion rates through AB testing. As we discussed at the beginning of this blog, with higher conversion rates comes higher revenue per visitor and so the cycle continues.
This iterative process and self heightening cycle allowed us to 3x one of our clients’ Google ads conversion rates:
Predictable, low risk conversion rate and revenue growth is the outcome of a well designed research and AB testing programme.
We’re currently giving away 1 hour free consultations to see how you might be able to start your conversion rate optimisation journey.
Why not start today?