What is Conversion Rate Optimization?

If you have traffic flowing to your Shopify store, but no one is buying, you have a conversion problem. You can increase sales - and your profit - with a little conversion rate optimization. 

In this guide, we break down conversion rate optimization. You’ll learn what is, how it works, and how to use it to boost sales and profit. 

If you have traffic flowing to your website, but no one is buying, you have a conversion problem.

What is Conversion Rate Optimization?

Conversion rate optimization (CRO) is the process of increasing the percentage of visitors and users who take a particular action on your Shopify store. Conversion rate optimizers study their users’ goals, needs, and behaviors to find ways to entice them to convert. If more people convert, you’ll meet your goals faster. 

In practice, CRO involves studying the things that motivate, persuade, and stop your customers and users from taking action so you can create a better user experience. When we think about conversion rates, we have to look at as much quantitative and qualitative data as we can to understand why visitors take action. 

You’ve seen this in other formats. A supermarket uses coupons and sales to bring people into the store (the traffic). But once the customer is inside, the store uses CRO techniques like merchandising, in-store messaging, loss leaders, and helpful associates to increase the likelihood that you convert to a customer. 

CRO is not a “one and done” operation. It’s something you should be doing all the time. There’s always more to learn. Besides, a tiny conversion rate bump - even just a half of a percent - could represent a lot of money. 

Before we can dive deeper into conversion rate optimization, you first need to understand conversions and how to calculate your conversion rate. 

What is a Conversion?

A conversion is the term for an action a visitor or user takes on your Shopify store. Conversions can be any action the site owner finds desirable. 

Your most important conversion is called a macro-conversion. But you may have less important – but still desirable – conversions called micro-conversions. For example, an ecommerce (i.e. Shopify) store would consider a purchase to be their macro-conversion and a newsletter sign up to be a micro-conversion.

Furthermore, conversions aren’t limited to your website. They pop up all over your marketing activities. You can study and improve the conversions of your paid ads, newsletters, banner/display ads, social media posts, press releases, or anywhere else you want your audience to take an action. 

Here are some other examples of common conversions: 

Examples of macro-conversions:

• Purchasing a product
• Making a donation
• Requesting a quote
• Subscribing to a service
• Clicking an affiliate link

Examples of micro-conversions:

• Subscribing to the newsletter
• Creating an account
• Following you on social media
• Completing a survey
• Adding a product to the cart

What is Conversion Rate?

Your conversion rate is the percentage of people who take the desired action out of the total group of users or visitors. You can calculate it by dividing the number of conversions by the number of sessions/visits. 

Conversion rate = conversions / sessions

Let’s use a fictional ecommerce store to help you understand conversion rate. 

Acme Apparel is an independent clothing store that sells streetwear. In the month of May, they had 15,617 sessions on their site. 621 of those sessions resulted in sales. 

521 conversions / 25,617 sessions = 0.033 or 3.3%. 

It’s important to note that this rate refers to sessions, not people. If a person visits your site on three separate occasions, they create three unique sessions but only convert once. 

If you wanted to know how many people converted, you could use the number of unique visitors instead of sessions. You can find the number of unique visitors in your Shopify admin under Analytics or in Google Analytics. 

For instance, let’s say Acme Apparel had 11,955 unique visitors. 

521 conversions / 11,955 unique visitors = 0.043 or 4.3%.

The conversion rate is slightly higher here because some of those unique visitors navigated to the site multiple times. They needed a few visits to make the decision to buy. If these numbers are far apart, you might ask yourself why visitors need so many touchpoints to take action. 

Ideally your conversion rate would be 100%, meaning everyone who visits your site takes the desired action on their first visit. That isn’t realistic, of course, but we still want to use conversion rate optimization to boost that percentage as high as possible. 

Admittedly, your conversion rate can be complicated to calculate depending on the nature of your site or app. For instance, if you produce lots of blog content (guides, how-to resources, tips, etc.), customers may return to your site for information after their purchase. These visits will inflate your sessions, thus reducing your conversion rate. So you may need the help of an advanced analytics tool or a CRO consultant to help you identify your true conversion rate. 

Benefits of Conversion Rate Optimization

The main benefit of conversion rate optimization is obvious: more sales. A higher macro-conversion rate means more people are buying. Higher micro-conversion rates means more people are entrenching themselves with your brand, which should lead to more sales as well. 

But that isn’t the only benefit. A CRO campaign helps you learn about your customer. You learn what they like and don’t like, what adds value to their lives, what triggers and solves their pain points, and what they need to make buying decisions. 

This information is useful everywhere, not just on your website. It can inform how you deliver customer service, how you package your products and deliver your services, and how you speak to them in person or over the phone. The value of this knowledge is endless. 

What is a Good Conversion Rate?

According to Growcode, the average ecommerce conversion rate is between 1% and 5%. It varies widely by industry, of course. Plus, some businesses take CRO more seriously than others. 

That said, don’t get hung up on averages too much. If you’re under 1%, there may be perfectly plausible reasons for it to make sense in your industry, sector, or vertical. It’s also possible that your website’s ability to convert is fine, while the traffic that reaches your website isn’t appropriate for your store. 

On the other hand, don’t think your job is done just because your Shopify store converts at 5%. Notice in the chart above that lots of sites claim to convert at much higher than that, so there’s always work to be done to boost your conversion rate. 

Averages are useful benchmarking tools, but we have to be careful. We can’t rely on them confidently. Forcing as many conversions as possible to hit an average is usually disservice to your business and your customers. Instead, focus on developing a better understanding of what actually matters to your customers and then creating an experience that matches. Conversions will follow. 

Conversion Rate Optimization Process

A successful CRO campaign has three important phases:

1. Gathering Data

This is where you use a variety of qualitative and quantitative tools to learn more about your customers. Do not make decisions based on your gut feelings or instincts. Your data will show you where to experiment as well as the results of those experiments.

Your data gathering stack might include some or all of the following:

• General analytics tools
• Heat map tools
• Funnel tools
• Feedback/customer satisfaction tools
• Session recording tools
• Usability tools

2. Running Experiments

In practice, an experiment is simple: You make a change that only a portion of your audience can see. For instance, you might make your call to action button red for half your traffic and blue for the other half. Then you measure which converts more. This is called A/B testing. 

3. Implementing the Results

Once you know what improves conversions, your final step is to roll it out to your entire site so all of your traffic is exposed to the improved element. 

Conversion Optimization Best Practices

In digital marketing, best practices are strategies and techniques that work most of the time. They’ve been successful for enough people that they become standard. 

CRO best practices are a little more complex, however. While there are definitely some things that tend to work everywhere and all of the time, you should always test them on your specific audience. What works for most people may actually hurt your conversions. 

Plus, conversions aren’t the only metrics you care about. Profit is more important, obviously. A particular CRO best practice may boost conversions, but fail to boost your profit. 

For instance, it’s generally considered smart to make your forms short and simple. Smaller forms equals more form conversions. You will read that advice everywhere. 

But what if you have to ask some key questions in order to provide your product or service? Sure, they make the form longer, but they’re essential. If you remove them, you might be forced to offer a poorer product. This is one of those cases where the best practice isn’t right for your business. 

Best practices are good places to start, but don’t accept them blindly. If you want to be truly successful, you’ll need to run your own experiments and test the results. You may discover a technique that we’ll all recognize as a best practice in a few years.

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