Is Conversion Rate Optimization Cost Effective?


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Conversion rate optimization (CRO) promises to improve the effectiveness of landing pages, websites, and other opportunities for customer interaction. But how expensive is this strategy to practice? And how do you make sure it remains cost effective?

The Potential ROI of CRO

Let’s start by examining the potential return on investment (ROI) of this type of strategy.

“The ROI of CRO is easy to conceptualize, but many people underestimate the total benefits. There are some obvious immediate benefits of improving the conversion rates of your webpages, but people sometimes neglect the exponential value increase as your company grows,” says Alexander Svensson of

To calculate ROI, we need to consider both sides of the equation: costs and benefits. If the benefits of a given strategy outweigh the costs, even slightly, we can consider the strategy cost effective, since it’s providing a measurable net benefit. The more lopsided this equation is in favor of benefits, the better it is for your organization.

In terms of benefits, CRO is incredibly powerful. Let’s imagine a scenario in which your website is generating 100,000 monthly visitors, and it’s currently converting about 1 percent of those visitors. Those converted visitors make an average purchase of $50 each. This leads to monthly revenue of $50,000 for your website.

There are many things you can do here, such as pushing the average purchase price higher, generating more visitors, or monetizing your website to increase the value of each visitor. But it’s hard to beat the benefits of CRO.

With proper optimization, you could easily push your conversion rate to 2 percent or higher; some organizations are able to see conversion rates of 15 percent or even more, but we’ll remain conservative and estimate a new conversion rate of 2 percent.

At this point, that $50,000 of monthly revenue turns into $100,000. And beyond that, any new traffic you generate for your site is going to similarly benefit from your higher conversion rate. If you double the traffic going to your website on top of optimizing your conversion rate, you could see monthly revenue of $200,000; with your original 1 percent conversion rate, that would only be $100,000.

So the benefits are pretty nice. But what about costs?

Costs are going to vary depending on the nature of your organization, your conversion optimization needs, and the partners and resources you utilize for CRO. At the most basic level, you can try practicing CRO entirely on your own for free, but this is usually unwise.

There are two major phases of CRO execution. First, there’s a phase of analysis and recommendations; here, you’ll typically work with an outside specialist, take inventory of your current digital assets, and devise a plan for how to boost conversions. Second, there’s the implementation phase, in which you’ll put the plan into action (typically with your in-house dev team, though you can use an outside specialist for this as well).

If you have a huge undertaking and you work with agency partners, you could pay a few thousand dollars per month for your CRO efforts; but even at this extreme end of the spectrum, if it helps you multiply your revenue substantially, the investment is well worth it.

How to Increase the ROI of CRO

Here are a few strategies you can use to make sure your CRO investment pays off:

  • Don’t be complacent. The average conversion rate, across all industries, is around 2.9 percent. Sometimes, people who invest in conversion optimization get complacent when they reach a certain target. If they triple the conversion rate of a landing page, they might determine that this increase is good enough and stop optimization efforts. But if they do this, they could end up leaving even more value on the table.
  • Hire true experts. The value of conversion optimization depends heavily on the person practicing it. This is both an art and a science, so it requires genuine expertise for the highest cost effectiveness. A CRO agency, equipped with multiple talented, experienced optimizers, is going to bring you much more value than a random person on your marketing team tasked with learning the basics from free online content.
  • Work to better understand your audience. Better market research can dramatically improve your CROs results. Different audiences require strongly differentiated approaches, so the better you understand the values and perspectives of your target demographics, the better you’ll be able to facilitate conversions for them.
  • Experiment relentlessly (and keep pushing). Experimentation is the true heart of CRO. While there are some best practices and fundamentals that can lead anyone to greater success, it’s also hard to tell which tactics, exactly, are going to pay off most for a given brand. The only way to find out for sure is to try something and see how it works with a controlled, objective experiment. The more you experiment, the more you learn, and the more you learn, the higher your return will be.

The Bottom Line

The bottom line here is that yes, CRO is usually cost effective. Like with any sales or marketing strategy, it’s possible to implement CRO ineffectively, or in a way that loses money. But as long as you’re working with competent partners, and you’re focused on pushing your conversion rate ever higher, your investment will likely pay off many times over.

Larry Alton
Larry Alton is an independent business consultant specializing in social media trends, business, and entrepreneurship. Follow him on Twitter and LinkedIn.


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