Article

Ada Okoli
Ada Okoli 9 February 2018

Conversion Rate Optimization Is Not A Long-term Strategy For More Customers or Sales

Does your company designate a lot of time and resources to Conversion Rate Optimization? CRO can be an extremely effective measure to drive desired user behavior, but it’s short-term. As such, it has little impact on long-term revenue drivers such as customer loyalty and customer lifetime value.

Matthew Campelli of SMARTASSISTANT explains why obsessing over conversion rate optimization won’t bring you more customers and won’t make them come back.

Conversion rate is traditionally accepted as a crucial measure when analyzing the success of an e-commerce site. And, as such, organizations dedicate lots of time and resources to optimizing conversion. With executives understanding that a good customer experience can have a major impact on their bottom-line, we see some businesses making the mistake of equating the two.

But, it’s important to note that conversion rate does not equal customer experience.

Say that an e-commerce store has a 50%-off sale. This will cause its conversion rate to rise dramatically. Good news! But what happens when the sale ends? Customers will leave, and the conversion rate will return to its former level.

Increasing conversion rates like this in the short-term has no impact on longer-term revenue drivers, such as customer loyalty and customer lifetime value. This is because conversion optimization focuses on driving more immediate instances of desired user behavior. It is persuasion-centric, not customer-centric.

Though it is related, the conversion optimization process is not directly focused on delivering better digital experiences.

In the report, “Achieving Digital Experience Transformation”, Decibel Insight notes that pure conversion optimization is not a long-term strategy.

This isn’t to say that there’s no place for conversion rate optimization. It can be an extremely effective short-term measure when applied to targeted landing pages or calls-to-action. But it’s not a sufficient strategy for optimizing the customer experience on your website – and driving growth.

Obsessing over conversion rate optimization won’t bring you more customers, and it won’t make them come back. To win and retain customers you have to look at the entire customer experience and accept that not every visit will lead to a conversion.

To solve CX the puzzle, you have to keep the bigger picture in mind

…and not focus only on the pieces with the flat edges.

In a world where consumers have so many options and so much choice, keeping the overall picture in mind is critical. Anything you do to enhance your relationship with your customers will eventually increase customer value. Focusing on conversion rate optimization is simply not enough.

Because of today’s fragmented customer journey with its multiple touchpoints, shoppers come to you from different sources and with different intentions. By only looking at and tweaking the “flat edges” of the purchase funnel – the desired sign-up or a purchase – you’ll miss out on all the other opportunities to educate, convince and delight visitors to turn them into loyal customers and solve the puzzle.

Truly customer-obsessed companies commit to complete digital transformation and use digital technologies to eradicate friction from their shoppers’ experiences at all stages in the purchase journey and on all channels. They are the ones to increase sales, revenue, and customer lifetime value.

Take Canon, for example. Realizing that visitors required more guidance when exploring its extensive product range, the manufacturer integrated several Digital Advice solutions on its brand websites, such as an interactive Camera Selector. It offers real-time support and education to help shoppers navigate and explore Canon’s product line based on their unique interests and needs. And by going in early, being supportive, showcasing their expertise in a customer-driven way, and proactively guiding a visitor who may just be “looking around”, Canon increases its chances of building a loyal customer in the future.

It is a way in which Canon uses customer experience to build a loyal customer base, as highlighted in the key takeaways and learnings from Canon’s Thought Leadership paper: “Align Customer Experience to Meet the Expectations of Today’s Multichannel Customers”.

Another example is Amazon. They’re probably the best example of a customer-obsessed e-commerce store that relentlessly removes friction from the customer experience. Customer experience – not conversion rate – drives everything it does. Jeff Bezos is said to have said, “If there’s one reason we have done better than of our peers in the Internet space over the last six years, it is because we have focused like a laser on customer experience. We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and we work backward.”

It’s clear that if your company concentrates solely on conversion rate optimization, it’s missing several opportunities to engage with customers and give them the experiences they crave. It’s a short-termist and risky strategy that will fail to foster long-term loyalty – particularly if your competitors commit to creating the digital experiences customers enjoy.

Ada Okoli
Ada Okoli

Hi Peter. Cheers for your feedback. But you might be surprised how "not obvious" this is in some cases. So we thought we'd write about it.

Peter Harvey
Peter Harvey

Why write about the obvious?

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