BY MICHAEL MCCAN, HEAD OF CRO
We’re lucky at Response One in that we get to deliver interesting work at each stage of the customer relationship with a brand – from the point at which they begin researching the thing they are interested in through to them buying it, and (hopefully) buying it again. We get to talk about the large media campaigns and the detailed, but no less exciting, analytics that dissect campaign performance and customer behaviour which helps predict what is likely to happen next.
Our story is all about how the joining together of these various disciplines are required to work along this consumer lifecycle.
One thing that surprises me however is the relative infrequency of conversations in our industry that link CRO (Conversion Rate Optimisation) to media plans. Given how a successful media campaign will almost certainly drive people online to a specific site, it seems odd to me that the media planning conversation doesn’t more naturally flow towards asking the obvious question: “Well, we’ve got them there, how do we make sure they actually buy something?”.
CRO is, admittedly, not likely to turn many heads in the shallow catwalk of marketing disciplines, but like many of life’s under-appreciated services it punches well above its weight. If you are reading this the chances are you are agency side or work in marketing brand side. It’s likely that whatever you do has a retail element to it. So let’s look at some numbers. If your site attracts 10k visits a day, currently converts to a sale at 3% and has an Average Order Value (AOV) of £50 then the incremental benefits driven by CRO improvements can add up staggeringly quickly. If we take the 20% increase example from the table below that equates to conversion increasing from 3% to 3.33% and ales increasing by 60 per day – giving an incremental uplift of £3000 per day. This equates to over £1m per year in additional revenue. (Even if we assume that this impact is only delivered 75% of the year the figure still comes in at £821k).
Increase in site conversion:
The figures above are illustrative only – clearly a big assumption is that as the number of sales increases the AOV remains static. This may or may not be the case. Regardless, the message should be fairly clear – for a relatively insignificant outlay (typically single figure ‘000s per month), the upside is significant.
Now, let’s make the message even more powerful by adding in the impact of improved media buying drawing more people in to the site. The first table below illustrates the impact of increased site traffic, while conversion remains the same. The second shows the incremental impact of both increased site traffic and conversion.
Increase in site traffic:
Increase in both site conversion and site traffic:
The argument for the whole being more than the sum of the parts is fairly clear when comparing the data. While a 20% increase in either site traffic or site conversion delivers £3000 incremental revenue for each metric (£6000 total), delivering both at the same time delivers £6600. Now, if we roll this out over a year that equates to £2.4m (or, if as above we assume it only delivers this uplift 75% of the year, the figure is £1.8m).
The above calculations only cover a small part of the full customer lifecycle – our approach at Response One identifies the incremental impact of activity across the full range of customer interactions with a brand – but for the purposes of this blog hopefully the argument is clear: CRO should be an integral part of every media schedule; it helps make everything else work that much harder.