E-Commerce Marketing: 9 Ways to Optimize Online Checkout for Conversion
Here are nine tips that will help optimize online checkout and guide your customers to a mutually beneficial outcome.
In today’s uncertain economic environment, advertisers and agencies are under pressure to justify their budgets quantitatively, reduce ad spend, or both. Improving the efficiency of ad campaigns helps teams respond to this pressure and get a bigger bang for their advertising buck.
Last month, guest blogger Kevin Brkal, Founder and President of KNB Online, shared three tips for optimizing return on ad spend (ROAS). Now that you know how to leverage retargeting and bring shoppers back to your site, you should also know how to help convert them through improving conversion rate optimization (CRO).
Advertising is one of those industries that produce an abundance of acronyms. Here are brief definitions of the four most commonly used advertising campaign metrics, which are often confused with each other:
CRO – Conversion Rate Optimization – A conversion occurs when the viewer of an ad performs a specific desired action—such as making a purchase, completing a form and/or signing up to receive more information. Optimizing the conversion rate equates to optimizing the number of viewers who convert divided by the number of total viewers exposed to the ad.
ROI – Return on Investment – This equals the amount of money a company earned from an initial investment. If a company invests $100 in an ad and earns 20 sales with a profit of $7 per sale, the ROI is $140 or 40%.
ROAS – Return on Ad Spend – ROAS measures the amount of money a company earns from funds spent on a single ad or advertising campaign. If a company spends $1,000 on an ad campaign and earns $4,000 in revenue, the ROAS would be 4x. It differs from ROI in that ROAS focuses exclusively on the ad spend, while ROI measures the company’s profits after deducting all expenses associated with that investment. You can calculate your ROAS using our ROAS Calculator here.
ROMI – Return on Marketing Investment – This is similar to ROAS, but can include other marketing initiatives, such as email marketing campaigns.
The CRO definition above is a basic one, and there can be different ways to determine conversion rates depending on a company’s business and the products or services offered.
For example, one variable for determining conversion rates is whether a shopper can convert more than once. If the company sells multiple products or repeat services, a given shopper can convert more than once. Here, the conversion rate is typically determined by dividing the number of unique conversions by the total number of times the ad is viewed. Suppose the shopper can convert just once, such as by subscribing to a magazine. In that case, the conversion rate is calculated by dividing the number of unique conversions by the number of unique views of the ad, i.e., how many people viewed the ad, not how many total times the ad was viewed.
Focusing on CRO is essential when aiming to increase conversion rates—whether the conversion is a sale or a step to move a user along a sales pipeline. Small changes in an ad, such as slight changes to color or shapes, can often make a big difference in conversion rates.
Here are five tips to improve CRO:
Companies think they know their customers, but do they really know them? Knowing your customer is much more than knowing what they bought and when. Five factors to understand at a minimum include demographics, geographic location, purchasing behavior, psychographic reasoning and economic status. Learn about audience segmentation here.
Understand the customer’s complete journey from when they first research a product to when they finalize a sale. In D2C situations, heatmap software can inform marketers about a customer’s journey through the website by measuring bounce and abandon rates, and helping marketers better understand, streamline and improve the purchasing process.
Despite the demise of third-party cookies, it’s still possible to execute highly personalized ad campaigns and customer journeys. Think about searching for new shoes online. One retailer pushes ads about shirts and sweaters, and another pushes a new line of shoes they’ve just stocked and offers a 10% coupon. Which retailer would you select? Here are more resources on personalization strategies to help you get started.
Frequently test your ad campaigns using A/B or multi-variable testing to better understand which media, messages, frequency and other factors tend to optimize results. More blogs about testing are available here.
Periodically ask your customers which elements of your ad campaigns motivated them, which ones didn’t and their opinions on the purchase experience. Not only will you gain additional intelligence to complement ad testing, but they will also appreciate being asked!
CRO is important because it helps companies lower their customer acquisition costs by helping them gain greater engagement from the visitors and customers they already have. By optimizing CRO, you can improve your revenue per visitor and gain more customers.
It’s important to understand the many metrics utilized to evaluate ad campaigns and what that data tells the advertiser.
Building strategies around these five tips will help ensure your CRO efforts yield strong results. But, for each tip, there are many details to master. Now that you know more about CRO and have a roadmap to improve your CRO strategy and results, it’s time to get started! Check out more of our resources and guides below!
Last updated on February 24th, 2023.