The ABC…Zs of Conversion Rate Optimization

7 minutes

Every CRO project should begin with a baseline measurement and benchmark of the key metrics. There are many tools available today to marketers for granularly measuring web and mobile traffic and user behavior, but the most common – Google Analytics and Adobe Analytics – should give you all the basic data you need to get started. Avangate has additional tools for tracking and analyzing the shopping cart that can help fill in the gaps, and give you a more complete picture.

When looking at what to measure and benchmark, it’s best to start with the basics, which include:

  • Website or landing page traffic
  • Shopping cart traffic
  • Orders
  • Revenue

All of these would give you the core data you need to calculate site, page and cart conversion rate, as well as average order value (AOV). With these in hand, you can now begin the work of optimizing for both transactions and average order value.

The following will take you through the steps and process for setting up and running a successful CRO program. In our model, we’ll focus on the purchase funnel and shopping cart, as they’re the most critical to reducing revenue leakage in the acquisition stage of the digital commerce lifecycle.

Step A: Analyze Your Purchase Funnel

As we’ve reviewed, you should now have a thorough analysis and audit of your current site, purchase funnel and shopping cart. Once you know your metrics and have benchmarked your conversion rate and AOV, you can identify gaps and areas that can be tested and improved. Here are some starting points for your investigation:

  • Look at the web design, UI and purchase funnel from the user’s perspective, e.g., how many steps or clicks it takes to go from the home page through to the order confirmation page. View the shopping cart and purchase flow through the eyes of the global buyer and note if they’ve both been sufficiently localized for language, payment methods, currency and even cultural preferences.
  • Time your page loads and how long it takes to go through the purchase process.
  • Examine if and how you handle errors and whether the actions required by the buyer are clear and easy to follow.
  • Test your site on all platforms, devices and browsers.
  • Analyze the conversion rate for both new visitors and returning visitors to see if there are differences in how they move through your funnel.
  • Look at your different marketing channels to see if visitors behave differently. For example, how does the conversion rate of a visitor acquired through paid search compare to a visitor referred by an affiliate?

Step B: Create a Test Plan

Knowing what to test and why is part art and part science.

After you’ve reviewed your pages and processes, you should have at least a dozen ideas or hypotheses of how you can improve them.

A good optimization hypothesis contains an IF/THEN statement to show cause and effect and is tied directly to the user’s behavior and the desired outcome. For example, “By adding a security icon on the cart page, the buyer will have less anxiety and, therefore, will complete the order.”

Once you have a list of hypotheses, you have to prioritize them. It is helpful to rank them according to impact and effort–what will move the needle the most with the least amount of effort to implement the test. The hypotheses with the highest impact and lowest effort should form the basis of your initial testing plan.

Sample Tests to Get You Started

Conversion Rate Tests

  • Removing unnecessary content and distractions
  • Adding social credibility statements, such as likes or downloads
  • Adding a customer support phone number
  • Localizing for each target country: translating text, displaying order of form fields correctly, and offering local payment methods
  • Testing different purchase flows (number of steps)
  • Testing different cart layouts or designs

Average Order Value Tests

  • Adding or removing upsell or cross-sell offers in the cart
  • Testing different price points for your product
  • Testing different price points for upsell/cross-sell products
  • Adding back-up media or download insurance
  • Testing display or placement of upsells, such as interstitial v. overlay or during purchase or post purchase

For instance, 123contactform, a SaaS provider of Web forms and surveys, managed to increase their conversion rate by 63%. They reduced the steps on the checkout page for yearly subscribers with high AOV products from two to one. Simple as that. Speeding up the process gave them a huge jump in conversions and an estimated 12 percent increase in revenue.

optimize cart conversion with ab testing

The test plan is your guide and blueprint for the testing, analysis and optimizations that come after it. It should include your hypotheses, the specific pages or objects that you are going to test against (the controls), the two to three test variations (depending on your traffic volumes), and your rationale for why those will perform better than the control. As you test, your plan will evolve throughout the process as you gather insights and apply them to the next series of tests.

Step C: Test Like You Mean It

Like all statistical exercises, conversion rate optimization requires a meaningful data sample in order to obtain a significant finding. Your test plan not only includes what to test, but also must consider how long you need to test for. Calculating your sample size and test duration is an important part of creating your test plan, and may affect how many variations you can “afford’ to test.

Depending on the traffic to your page and/or cart, 15 days (e.g. two 7-day business cycles) is usually sufficient to reach statistical significance with a confidence level of 95%. Any less, and you won’t have the data to support or disprove your hypotheses. Any more, and you’ve lost time and money to put your findings into play. Like everything else with testing, finding the right balance is something that only comes with experience, and more testing. There are best practices, but they are only general rules and are often proved wrong by the exception.

As a general rule, the winning configuration or model should be able to attain a 95% level of confidence before it can be declared permanent. You can get a handy calculator here. That will help ensure that the results you received during the test are repeatable in your production environment.

Remember, too, that testing is an iterative process. Test number two should be built on the results of test one, and so on. With testing, you’re always working in parallel, with your eye on your next text, even before you’ve completed the one in progress. Even when tests fail or have inconclusive results – and they do 25% of the time – they typically provide some insight that can be applied to the next test or live campaign.

Step D: Put Your Findings into Play and Confirm Your Conclusions

Once you’ve conducted your test and determined the winner, it’s time to put them into play. Running the new configuration(s) outside of the test is the best way to confirm the validity of your conclusions, as well as your test plan and methodology. The before and after analysis can also be a humbling experience if the results don’t hold up over time. If they don’t, then you’ll need to consider additional testing. Even if they do, there is no such thing as the perfect shopping cart, page or purchase flow.

Preferences are always changing and evolving, and you’ll never know with certainty what users will react to next. A best practice is to validate tests by repeating them, for example, in another season or with a different customer segment. The only thing you can do is continue to test and look for ways to optimize, which brings us to the last and final step.

Steps E-Z: Go Beyond Testing

You can complete a test, but the testing and optimization is really never over. Not if you want to continue to recover the additional 5-20% of lost revenue. Revenue leakage can occur at anyplace within the Acquisition stage, and there are numerous things you can do, beyond the testing cycle, to source and stem it.

Of those, the most effective, if not also most satisfying, is the recovery of revenue lost during the purchase process. Strategies for recovering lost revenue typically fall into two categories: abandoned cart recovery and unfinished payment recovery.

  1. There are any number of things that can cause a buyer to abandon the cart. That’s why it’s a mistake to look at an abandoned cart as anything but another – and very good – opportunity to close the sale. Individual tactics for recovering abandoned carts range from the simple – single email notice – to the more sophisticated – a redirect to a targeted offer. Your situation and goals will dictate which to use, but both generally average attach rates of 10%. Avangate’s platform includes an abandoned cart email campaign, and also supports more specialized 3rd party solutions that can be seamlessly added on a pay-for-performance basis.
  2. As with abandoned cart recovery, unfinished payments present an opportunity to close a sale. Most unintentional unfinished payments are caused by errors or oversights made by the buyer during the buying process. An incorrectly entered card number or expiration date, or a declined credit card, is the most usual culprit. Many valid unfinished payments can be recovered immediately at checkout through one means or another. One of the most effective is the unfinished payment screen. Another common method is the follow-up email, which is sent at a pre-defined frequency until the purchase is made. That is very effective in countries, such as Brazil or Japan, where many online purchases are completed offline at a bank or convenience store.

The most accurate definition of Conversion is “a progression from one state to another.” When the buyer makes the decision to purchase, to upgrade or renew, it is rarely or ever a random, spontaneous act but instead the result of a cumulative process that was possibly days, weeks, months and even years in the making.

The progression from prospect to trial, trial to customer, customer to renewal or upgrade, and renewal to evangelist doesn’t happen by accident. Instead, it typically is the result of careful planning and, in most cases, significant investments. As the customer moves through the commerce lifecycle they are converted from one stage to the next as the result of your efforts. Or they leak away in between the cracks as unwitting casualties during the commerce lifecycle.

CRO, like anything worthwhile, requires patience and experience to master. It is not impossible, but nor is it something that can be done easily, or in a day. What it is really is an ongoing process and commitment, one that with constant experimentation and hypothesis testing can lead you to greater insights and more effective results.

Want to Learn More?

This post is part of a comprehensive eBook on customer acquisition. To learn more about the digital commerce lifecycle, conversion rate optimization, get examples of marketing strategies from digital leaders and much more, check out our Customer Acquisition eBook.


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