The History Of Conversion Rate Optimization



Conversion rate optimization, or CRO, is a term used to refer to a system of growing the number, or percentage, of people visiting a web site that convert into customers.  Read on and learn about the origins, how it works, and how it has evolved and how it is done by many firms today.

If you or someone you know is the owner, manager, or stake holder in a marketing web site, this is one article you need to read and a subject you need to learn as much as possible about in order to complete in today’s tough, global marketplace.


The Origins Of CRO 

This system came about as e-commerce marketers having a need to improve the performance of their web sites after the 2000 dot-com bubble burst, and many online marketers went out of business entirely.  In order to survive in an increasingly competitive marketplace, more and more web site analysis tools became available.

During this time, the awareness of the concept of web usability also took root in those looking to survive.  As a result of these happenings, more and more internet marketers developed marketing tactics with more measurable results, and began to focus on the user experience of those visiting their web sites.

New tools to help come out in 2004, and these gave internet marketers the power to experiment with content variations and web site design. They could then determine which layouts, content, images, pictures, and offers would get the best results.

This work gained even more traction with the 2007 introduction of the Google Website Optimizer.  This free tool helps internet marketers to increase conversion rates and to design a web site that will please visitors.  It has the ability to test anything in HTML code.  More and more internet marketers have jumped on the bandwagon, as a 2014 poll showed that 59% of them thought that CRO was “crucial to their overall digital marketing strategy.”

Many  of the basic principles that are used by CRO are shared with Direct Response Marketing.  This means a strong emphasis on testing, tracking, and constant improvements.


Why Conversion Optimization Is Used

The more people that visit your web site that are converted into buyers, the more revenue a business has to work with.  It also means a faster return on investment, and increases in profits.  Just an increase in conversions rates from 2% to 3% means a growth in sales of 50%.  CRO is also valued greatly because it is more cost effective than search engine optimization (SEO).


The Statistical Significance Of CRO

It is very difficult to gauge customers, as online marketing response rates have been shown to vary wildly from minute to minute, and from segment to segment.  This makes it very difficult to measure just how effective an ad campaign is.  If you are wondering why this is the case, humans are known to have a difficult time in separating chance events, from real effects.

If you were to use the haystack process, you would find that at any given time, online marketers are limited to examining and drawing conclusions from what are rather small samples of data.  Studies have been done by a number of psychologists that suggest documented tendencies that find deceptive patterns in small samples.  Larger sample sizes are needed to resist the urge to see a pattern, when in fact one does not even exist.

Using these conversion optimization methods, better research can be done.  They can also be done in a real time environment.  This real time data yields more accurate results, and gets a larger sample size, so online campaigns can be gauged more effectively.


How Conversion Rate Optimization Works

The goal of conversion rate optimization is to increase the overall percentage of web site visitors that take action.  That action most often is the purchase of goods or services, but may also be submitting a form, or signing up for something.  This is accomplished by the testing of alternate version of a web page or process.

This works very well with your earned and owned traffic that a New York SEO company could drive to your site and is a proven method for getting more leads and more sales without extra investments in web site traffic, increasing return on the of their investment and profitability

There are testing methods that work to measure these conversion rates, which are defined as the percentage of web site visitors who complete a goal.  This goal is defined by the owner of the web site.  There are testing measures where web site owners can see which content, images, social proof elements, and headlines convert more visitors.  Split testing, or A/B testing is what is used to measure these.

There are several methods for getting more conversion optimization for web sites.  In the last few years, two main school of thought on this have emerged.  One is focused on using testing as the best approach to increase conversion rates for web sites, as well as ad campaigns, and landing pages.  The second is more concerned with the pre-testing stage in the conversion optimization process.

In the second approach, a lot of time is spent in trying to understand the target market, and then creating a message that appeals to them.  Only then it is used with testing mechanisms to try and increase the conversion rate.

Conversion Optimization Skills and Disciplines

Conversion rate optimization is a discipline with many professional roles.  These professionals will have an excellent grasp of the following tactics and strategies:

users surveys and feedback

landing page evaluation

split testing

A/B testing

multivariate testing

web analytics

internet marketing

conversion-oriented web design

usability testing


user experience

principles of neuromarketing

persuasive psychology

It is obvious that people in this field are jacks of all trades, with a good deal of experience in web page design, psychology, and a good command of the English language, they may have worked for the best SEO company Toronto has produced, along with considerable writing skills.


Some Of The Elements Of The Test Focused Approach To Conversion Optimization

The following items need to be present in a conversion optimization platform for content, delivery, and campaigns:

Data collection and processing

This platform must handle hundreds, or even thousands of variables and find out which subsets have the best ability to predict behavior.  This includes any multivariate relationships that may exist.  Pre- and post-screening methods are used in combination, the dropping of any data that is found to be redundant or irrelevant is done.

Collection of data can be done by a flexible data warehouse that accepts data from customers as well as data from third parties.  This data can be numeric, ordinal, or text-based, and bad or missing values are handled to ensure integrity.  This data can be geographical, customer-based, related to behaviors, contextual, demographic, or based on the frequency of a behavior.


After data is collected, a hypothesis will need to be formed based on that data.  This process helps those form a foundation on which changes may be based.  These hypothesizes are made much as they are in the scientific world, as they are based on observation and deduction.  Any hypothetical situation  analyzed must be able to be measured, as without that, one cannot draw any conclusions on it.

Optimization goals

Optimization defined is the application of analytical methods to help one make better decisions.  Using this as a framework, the goals of a business are defined, and then decisions are made to optimize those goals.  This method has a long history of use and success in a wide variety of industries including military logistics, telecommunications, airline scheduling, and supply chain management.

The goals are what you would expect, getting the maximum number of conversions to increase revenue, profits, and exposure if you are recruiting for a goal or cause.

Business rules

Business rules must be handled under the framework of optimization.  A few examples are pricing strategy, bundled offers, maximum or minimum weights for specific offers, and up-sells, down-sells, and cross-sells.  Other examples include mutually exclusive offers, the share of voice among all offers, and a specified holdout sample.

One must understand these and other business rules in order to use this platform.  Then, targeting rules can be applied.

Real time decision making

Once all of the mathematical models have been constructed and are in place, content or ad servers can use an audience screen method.  These methods will place visitors in any number of segments and let them select what they feel are the best offers in real time.  The goals of the business are optimized, while the business rules are enforced.  Take note that the mathematical models can be changed at any time in order to reflect any changes that occur in business goals.

Statistical learning

Methods such as variable testing, control groups, simulations, and validation testing can help those doing research to tell between true effects, which one is seeking, and chance events.  It must be ensured that results are repeatable by using as many statistical  methods, including these, as is possible.

A framework that uses a champion – challenger approach can help to ensure that the best mathematical models are always deployed to get the results you are looking for.  Performance is always greatly enhanced by the ability to use and analyze very large sets of data, or big data as it is known today, and to retain historical learning.


How Many People Approach Conversion Optimization Today 

As we took note of before, in 2007 Google introduced the Google Website Optimizer.  This is still one of the best ways for small to medium-sized businesses to do conversion rate optimization for their sites, as it has always been available for free of charge.  It can also be of use to larger businesses as well.

In June of 2012, Google announced that the Google Website Optimizer would be retired as a product in August of 2012.  Now, the functionality of this product has been integrated into Google Analytics.  It is now known as Google Analytics Content Experiments.

You can still do many of the things you could do before with Google Website Optimizer, such as test elements that have HTML code, including fonts, calls to action, product copy, product images, product reviews, and any forms used on a web site.

Testing alternative versions of entire pages can still be done with A/B testing, as well as multivariate testing.  These have always been a part of Google Analytics, but they must be accessed from a different user interface.

If you look, you will find other tools that can help you to do conversion rate optimizations on your pages.  Having tools like these is just one of the reasons that Google has some of the highest priced stock in the world, and is one of the world’s most valuable companies.

Since conversion rate optimization is rather new, less than 20 years old actually, it is just now being refined to the point where it is coming closer to actually being scientific in nature, with results that are more consistently correct than they were even just a few years ago.

If you are just starting out in the cruel and highly competitive game of internet marketing, and have limited resources, you are most likely best served by using Google tools to get you started in conversion rate optimization.  If you are more established, and like most people, and are lacking in the skills needed to perform a more complicated form of this method, you may be best served to hire a 3rd party to do this for you.  It may be costly, but the benefits may be something you simply cannot pass by without giving into the competition.