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Conversion Rate Optimization

A Qualitative Approach to Identifying Optimization Barriers

Written by Marina Jensen

Paper category

Bachelor Thesis


Business Administration>Marketing & Sales




Thesis: Conversion rate optimization Conversion rate optimization (CRO) is a structured and systematic method used to improve the performance of an organization's website. In contrast to search engine optimization (SEO), which focuses on generating more traffic to a website, a CRO focuses on capturing current traffic and persuading them to take the required action. (Miikkulainen, o.a., 2018) To understand CRO, we must first understand the concept of conversion. The conversion itself represents the behavior that occurs when a passive visitor on a website "converts" into an active customer. These actions may be registering members, downloading, purchasing products or services, depending on the company's goals. Conversion occurs when a person enters an e-commerce website and then purchases a product or service. The percentage of visitors who complete the desired action is called the conversion rate. Most companies’ websites usually have multiple conversion goals, each with its own conversion rate. The conversion rate is calculated as follows, see Figure 4. An example is if an e-commerce website receives 100 visitors and has 10 sales in a month, the conversion rate will be 10 divided by 100, multiplied by 100 to get the percentage, which will result in a 10% conversion rate. (Jarnvall, 2015) Measuring conversion rates helps companies discover whether their web pages are persuading visitors to take the expected actions they want to achieve. A higher conversion rate may increase revenue. Conversion rate optimization (CRO) is a strategy for marketing optimization to analyze, understand, and improve a website. CRO focuses on the behavior of visitors and what motivates them to participate in specific content in a certain way. It uses a variety of techniques, including persuasive design. By arranging, constructing and optimizing the website, more visitors can be convinced to take the required actions on the webpage, website or event. (Shukairy, 2017) Jarnvall (2015) described CRO as a collective concept, and for conversion, a website must combine user experience (experience design), data analysis (scientific method), and psychology (persuade marketing). CRO is a complex process, and like other marketing strategies, it is a long-term commitment. However, it does require anticipation and understanding of visitors. Wider Funnel (2019) explained that CRO is a combination of art and science. -Itisa is scientific, because people cannot simply guess and hope for better changes on the website. CRO is about developing hypotheses and running controlled tests and analyzing the results. Therefore, Itisart cannot act alone to create visual effects and messaging that interact with visitors. 2.1.1 Benefits of CRO Conversion rate optimization (CRO) is essential to ensure an effective website and a profitable business. With the rising cost of advertising, high-performance websites have become the key to online success. CRO helps to take advantage of current network traffic and focuses on getting visitors to interact with the website (Jarnvall, 2015). Compared to attracting more visitors, it is more cost-effective to convert a higher percentage of visitors who have already visited the site. Actively cooperate with CRO to achieve the following business goals: Theoretical background 13•Increase in conversion rate = higher return on investment•Reduced customer acquisition costs•Permanent increase in conversion rate•Increase in ad page views•More user participation Successfully converting more visitors into customers can increase revenue and profits. The company will have access to comprehensive statistics and data on how its visitors move and act on the site, which will help the continuous development of its products and services. (Hellesmark, 2018) 2.2 Scientific method Several companies started to optimize without actual plans or clear structures. CRO is a comprehensive process based on: 1. Identify the pages on the website that should be optimized. 2. Follow the repeated process to optimize these pages. CRO is a process of diagnosis, hypothesis and testing. Croxen-John and Tonder implied in their book "E-Commerce Website Optimization" (2017) that most CRO systems use the tried-and-tested scientific method shown in Figure 6. The core of the scientific method is to rely on measurable evidence, hypotheses and theories. TheoreticalBackground14Step 1 & 2: Define the question and collect evidence. Everything done in the optimization process is to answer the defined question. The second is data from various sources, which are the key to finding out how to improve the CRO strategy. Relying on guesses, opinions, and so-called best practices is not a viable approach. Following an evidence-based approach, the company will collect a large amount of data that is essential for making long-term plans. This requires a process that prioritizes which work should be addressed and which should be ignored. Steps 3 and 4: Make hypotheses and experiments Make hypotheses based on observations and make reasonable predictions. It should explain why the test was performed and how to measure the results. And understand the expected effect of the test. Whether the hypothesis is correct or not, it must be tested. Since the test results will support or refute the hypothesis, Steps 5 and 6: Analyze and interpret the results Even if the hypothetical results show a failure or victory, it should not be regarded as a failure, but should be interpreted as a learning experience. The purpose of scientific research is often to contribute additional knowledge. Read Less