The unexpected difference between conversions and ROI

An increase of conversion rate will result in more profit? We all think this is a universal truth. But it actually isn’t. Key numbers will finally decide whether your new conversions have generated enough ROI and your campaigns can be considered “a success”.

Getting more conversions is one of the best goals you can set for your website. But conversion optimization is an effort that needs investing in tools, taking the time to create and configure campaigns. So, take into account all costs and make sure that at the end of your campaign, you have gained more than you invested.

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When more conversions don’t necessarily lead to ROI

Let’s say you have a cosmetics e-shop and you deploy each month different tactics to get traffic. The campaigns are meant to bring you traffic, but concomitantly you run a conversion optimization campaign to retain more of these new visitors.

October

200 conversions
Traffic acquisition through Adwords: 1000 $
Average Value of a Conversion – 40 $
Total gains: 7000 $

November

250 conversions
Conversion Optimization Budget – 200 $ => a 25% growth in conversions
Traffic acquisition through advertorials: 1000$
Average Value of a Conversion – 32 $
Total gains: 6800 $

This is a case of doing conversion optimization without taking into account all the factors that influence revenue. When running a conversion optimization campaign you have to adapt it to the traffic you get and to its source, you have to aim not only to increasing the number of conversions, but also to increase the average value of conversions, and to choose affordable, yet highly effective tools.

If you want to know more about the increasing the value of conversions, check out the infographic about the Average Cart Value over the years.

The good news with conversions is that they are measurable and you can forecast the evolution of your sales and your ROI, and what you could do to use correctly your conversion budget.

By using the Conversion calculator, you can see how your profit grows when you increase your conversion rate. This gives you the ideal outcome, or what you should aim at. Don’t worry, it can be achieved, you just have to work for it, control your investments and their results, adapt your strategy, use your resources and your marketing ideas wisely and so on.

5 rules for increasing conversions and ROI at the same time

Prioritize

Identify what are the most successful conversion optimization tactics you could apply. Navigation is hindered by a too heavy architecture? Start by developing new filters. Your product images don’t accurately display the products? Insert professional pictures. You just have to identify what would have a greater and faster impact on your conversions.

Measure correctly your conversions

Define appropriate metrics. Track metrics that can provide insight into the process of your online sales. Sales may be your final goal, but there are other intermediary objectives who could contribute to the overall success.

Continually track site ROI by channel. Make sure you integrate a MultiChannel approach into your measuring system. It’s a proven fact that people are exposed to a series of channels before they actually buy something. Maybe they first become fans of your Facebook page, then they signed-up for the newsletter, but the occasion to buy something finally arose when they saw an Adwords ad.

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Focus on budget

Focusing on what you spend is critical to being profitable when finishing your financial year. It’s a little sad, but the success of your marketing campaign is not only about being liked or creating amazing things. It’s actually more about the money.

Test your marketing ideas

Regardless of what they’re about (design, copy, offers), your marketing ideas need to bring real results in terms of sales. The good news is that you can verify their power to convince people to buy more, by doing website and ad testing. Depending on your idea, and the available instruments, you can do A/B testing, multivariate testing, usability testing. Determine which combinations of design and copy favorite conversions the most.

Save up on time and money

An unavoidable question probably is: What tool can help you implement more conversions optimization campaigns, without being too expensive?

There are many tools available on the market that can help you apply various optimization techniques. By subscribing to optimization software you can test it and see if it’s what you need for your marketing campaigns.

Automation also saves you time and money. Recommendation engines that you can parameter according to your website’s needs, automation systems for emails, automation for website behavior and re-engaging leads… These are just a few of the time saving automated tactics you can integrate into your marketing campaigns.

If you’re trying to limit the costs, consider opting for a conversion SaaS. It’s the ideal solution if you want conversion optimization software that is easy to use. You won’t waste time on learning how to use. Also, it’s exactly the software that you need if you want something you can handle on your own, without involving too much other departments, like the IT, design etc.

If you drive more conversions, make them be good conversions: increase the average order value, chose the less expensive marketing channel and the tools that allow you to create easily more complex campaigns.