Conversion Rate Optimisation (CRO) is the process of transforming more of your site’s visitors into conversions (usually a purchase or an enquiry). It works on your existing site traffic, so you don’t have to pay for more traffic to generate more revenue.
But, and this is a big but, if your site starts converting at a higher rate, it can make sense to increase your traffic too. You see this is what we call the compound effect of CRO. The compound effect of conversion rate optimisation is pure magic, well maybe not quite magic, but it can do magical things for your company.
Starting point
Let’s look at an example where 5,000 users are converting at 2% with an average order value of £150 then you would generate £15,000.
The impact of conversion rate optimisation
If through CRO you were able to increase this to 2.5% (a 25% uplift) then you would generate £18,750 from the same 5,000 users. That’s £3,750 extra without spending anything more to acquire the traffic.
That’s pretty great, and you could walk away happy that your profitability has increased. But let’s say that instead of being content with what you have, you decide to reinvest that £3,750 into more traffic.
The impact of compound conversion rate optimisation
This investment generates you 2,500 new users. So, you now have 7,500 users converting at 2.5% with an average order value of £150. This generates you £28,125, an extra £13,125 over what you were originally generating.
This process can then repeat itself until the quality of traffic begins to dry up, resulting in extraordinary growth potential, just by shifting the conversion rate needle by 0.5%.
Unlocked potential
As profit will be baked into every sale, your company will also see a huge increase in profit as a result of the increase in revenue generation. This opens the door to opportunities that you could only have dreamt of before CRO. You can explore that new product launch, venture into a new market, or simply give yourself and your team a huge bonus! And that is the magic of the compound effect of CRO.
See the magic of compound CRO for yourself by starting your CRO journey today.
Hi, I’m Charlotte. I love writing about user psychology and tips I’ve picked up from leading user research and CRO projects. Get in touch if you’d like to work with me to improve the user experience on your site or click here to learn more about your future CRO team.