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Conversion Rate Optimization (CRO) Dictionary — Top Definitions & Metrics

CRO is an acronym in marketing you should be familiar with.

Conversion rate optimization (CRO) is the process of increasing conversions on your website. The goal is to get your website’s visitors to take specific actions, whether it be buying a product or signing up for your mailing list.

CRO is a must for any business looking to grow and establish its client base. Any website can benefit from the practice, especially when considering 78% of companies are not satisfied with their conversion rates (1).

If you are new to CRO, all the terms might be confusing. Understanding the fundamentals will be beneficial whether you implement the practices yourself or hire a CRO agency.

Below, we explain some of the most common CRO definitions and metrics.

Conversion Rate Optimization Definitions & Metrics 

By understanding CRO definitions and metrics, you can effectively target your audience and get them to take action on your website.

CRO Definitions

Let’s start by taking a look at some of the most common CRO definitions:

Behavioral Targeting

Advertisers use behavioral targeting to target audiences based on their online behaviors. They analyze browsing habits (visited sites, purchases, search terms) to display ads to consumers likely to buy. This allows you to maximize conversions by showing ads to relevant audiences.

Behavioral targeting is a relatively new CRO definition. In years past, businesses relied on contextual targeting. This involves marketing products on relevant websites (like placing ads for strollers on a mommy blog). While the contextual method is effective, behavioral targeting is much more tailored.

Some of the biggest companies take advantage of behavioral targeting. Amazon, for instance, uses technical tools like cookies and a pixel computer code to track user behavior (2).

Call-To-Action (CTA)

A call-to-action prompts a visitor to perform a specific act. Desirable actions can include anything from adding a product to their cart or downloading a resource from your page.

Effective CTAs are essential to your CRO campaign. They are a way to get your visitors to convert by merely asking them to do so. “Buy Now” or “Sign Up Today” can convince a user who is on the fence to follow through.

There are many methods for creating successful CTAs. Some of the most common include:

  • Use the “why not?” approach. If visitors see that taking action is easy and will benefit them, they will think, “why not?”
  • Create a sense of urgency. Take advantage of people’s attention while you have it. You want to convert a user while they are already on your site. They may not return later, resulting in a lost opportunity.
  • Be direct. You do not want to leave visitors with any confusion about what to do next. Be straightforward with your CTAs to inspire action.

Click-Through Rate (CTR)

A click-through rate measures how often users click a link compared to how many impressions the link has. This was once a marketer’s most prized metric, but many now seem to be prioritizing CRO.

CTR, however, is just as important as it once was. You need to get users to your page first before they can convert. Having a good CTR will increase the likelihood of customers taking action on your page.

Two key ways marketers improve CTRs include:

  • Offering value. The copy of an ad should provide users precisely what they are looking for. This will compel them to click through and take action on your website.
  • Targeting the right audience. In most cases, an individual won’t click on an ad if it’s not relevant to them.

Eye-Tracking

Companies use eye-tracking to determine where a user directs their focus on a website.

An eye-tracking device directs near-infrared light towards the eye. It then uses its infrared sensors to detect reflections in the cornea and pupil (3). You can use this data to determine where a subject is looking.

Eye-tracking is beneficial because it allows businesses to get a better understanding of consumer behavior. They can tell where a subject unconsciously looks first, allowing them to design their pages in a way that drives conversions.

Form Conversion

Websites use forms to interact with their customers. Some of the most common functions of forms include:

  • Signing up to receive emails/newsletters
  • Requesting quotes
  • Further inquiring about a company’s services

Form conversion is valuable in that it will help you establish a relationship with customers. Companies optimize form conversion in some of the following ways:

  • Creating an appealing form. You want to have forms that are clear, easy to fill out, and aesthetically pleasing.
  • Giving them something in return. A free quote or a useful download are great incentives to get a customer to fill out a form.
  • Using fewer fields. Research suggests that forms with fewer than ten fields drive conversion rates up by 120% (4).

Micro-Conversions and Macro-Conversions

Micro-conversions are secondary actions such as adding a product to the car or signing up for a newsletter.

Macro-conversions, on the other hand, are primary goals. Examples include getting a visitor to buy a product or submit a lead generation form.

Micro-conversions may seem less relevant but are just as crucial to a website’s CRO. They facilitate a relationship with customers and ultimately lead to macro-conversions.

Personalization

Personalization is a general term that involves making each customer’s experience unique to them.

Visitors expect personalization from businesses. They want their experience to be as smooth and user-friendly as possible. Prime examples include showing relevant recommendations and giving the option of reordering frequently bought products.

Personalization has many benefits. Perhaps most important, it provides users precisely what they are looking for, leading to more conversions. It also establishes a positive association as the customer feels seen and heard.

Sales Funnel

Sales funnels track your customer’s experience with your brand. They usually start with how they first became aware of your company and end with a purchase.

Advertisers use sales funnels to understand how a user interacts with your website. While you lose prospects at each stage, the idea is to maximize how many people end up converting.

Let’s consider a sales funnel that consists of the following clicks: home page > product recommendations > product page > checkout page > order confirmation page. When you analyze your website traffic, you realize that the product page has a high exit rate.

You have to figure out why this page is preventing your consumers from making it to the end of the sales funnel. Maybe it’s poor design or otherwise offers a poor user experience. Regardless, by tweaking it, you will likely see an improved conversion rate.

Type 1 and Type 2 Errors

Advertisers implement tests to improve their conversion rates. Like with any kind of experiment, there is the possibility of getting type 1 and type 2 errors. These errors may prevent you from improving your CRO.

Type 1 errors (also known as false positives) occur when an experiment affirms a correlation that isn’t there. This can happen due to sheer chance or because of poor data collection.

For instance, let’s say you test to see if a new “Buy” button drives more conversions than the one you already have. After experimenting, you notice your purchases go up and decide to implement the new button. Months later, however, your purchases go down. This would be a type 1 error since the new button didn’t have the effect the experiment affirmed it did.

A type 2 error, on the other hand, is a false negative. It happens when you fail to find a correlation that is present. Let’s use the same example as above, but you instead find that both buttons produce the same results. You decide to leave the original button, but you would’ve gotten more conversions with the new button.

Unique Selling Proposition (USP)

Your USP is what sets you apart from the competition. Even if your industry isn’t overly saturated, it’s crucial to stand out from the crowd. A good USP will convince customers to go with your brand over others.

If your USP isn’t evident to your visitors, then you could be missing out on many potential conversions. You want to convince them that you are worth investing in.

Once you establish a USP, you want to ensure it resonates with your audience. Advertisers who gather feedback can appropriately optimize their messages to drive even more conversions.

Website Readability

Website readability refers to how easy it is to understand online content. It depends on the presentation (colors, spacing, fonts, etc.) as well as the structure of the text.

Users come to your website with a mission in mind—to buy something and leave. If your pages are hard to scan and read through, your audience will get frustrated and move on to the next website.

Businesses implement many practices to improve their website’s readability. For instance, they use larger fonts and appropriate color schemes. When your audience can easily read and absorb the information on the page, you can successfully guide them towards conversions.

CRO Metrics

It’s not enough just to implement a CRO campaign and hope for the best. Companies must track their progress and make the necessary adjustments. This will allow them to optimize their efforts and see real results.

A/B Testing

A/B testing (also known as split testing) is one of the more straightforward experiments you can run to improve your CRO. The practice involves testing a new element against a control to see if it performs better.

So, let’s say you think a video will drive more people to buy your traffic. You set up a campaign where half of your traffic will divert to a landing page with the video. The other half goes to another page that’s the same but doesn’t feature the video.

Use this calculator to determine a statistically significant sample size (5). Once you have enough data, you’ll see which option leads to more conversions. Then, you can implement the appropriate changes on your website.

Multivariate testing (MVT)

As opposed to A/B testing, MVT testing involves changing multiple variables. It is slightly more complicated as it requires you to test numerous combinations. In the end, you will still analyze the pages to see which one resulted in the most user actions.

To determine how many pages you need to test, multiply the number of variations of the first element by the number of variations of the second element.

So, let’s say the two elements you are experimenting with are the header banner and header font color. You choose red, yellow, and blue for the header banner. You choose Times New Roman, Helvetica, and Calibri for the header font.

There are three variations of each element, meaning you need nine different pages. One will use red and Times New Roman, one will use blue and Helvetica, etc.

MVT testing is interesting because you get to see how elements work together. A red banner on its own might not drive conversions, but when paired with Helvetica, you suddenly have an explosion in sales.

Personalization

To create meaningful personalization for your audience, you need to do your research. Conduct surveys and talk to customers to get an idea of what they expect from your company.

Not sure if your company needs personalization? One source recommends waiting until your business is more established (6). Having resources such as a dedicated marketing team will ensure your efforts pay off.

 

Statistical Significance

In an A/B test, statistical significance refers to the chance that the correlation you found aligns with reality. So, if the experiment you ran has a 90% statistical significance, there’s a 10% chance your findings are inaccurate.

With any experiment, anomalies can throw off your results. Statistical significance is important because it makes you aware of the risk of being wrong. A large sample size can help prevent random chance from skewing your results.

Website Readability

When considering website readability as a metric, you’ll find user testing and feedback helpful. These practices can help you determine if your content is easy to understand. You can also use tools like readability software to simplify your text for the average reader.

Bounce Rate

Bounce rate measures how many users visit your website and leave without interacting. Sites don’t want their audience “bouncing.” The goal is to have them stay, browse, and take meaningful action.

However, a high bounce rate isn’t necessarily a bad thing. Let’s say you have an informative article, and users click on it looking for an answer. Once they get the information they need, they’ll move on to the next website. The company that puts out the page gets some exposure that will help it establish its brand.

The Importance of CRO Definitions and Metrics

Now that you have a better grasp of conversion rate optimization, you can feel confident and educated when speaking with someone about the CRO of your site.

Even better, you have an understanding of the metrics that need to be measured and the vocabulary that should be used when conducting a CRO campaign.

Don’t forget to bookmark this page so you can use it as a marketing resource in the future.

Not sure if your site will benefit from CRO? Work with us to CRO your website. Send your details over and we’ll be back in touch shortly.

References

  1. https://www.hubspot.com/marketing-statistics 
  2. https://www.nytimes.com/2019/01/20/technology/amazon-ads-advertising.html 
  3. https://imotions.com/blog/eye-tracking-work/ 
  4. https://www.searchenginepeople.com/blog/150450955-how-many-form-fields.html 
  5. https://www.hotjar.com/poll-survey-sample-size-calculator
  6. https://useproof.com/personalization-guide/measuring-the-success-of-personalization
Author: Kurt Philip

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Increase Conversions
by
30-100+%

from the same traffic, rankings or ad spend.

on your Affiliate, Lead Generation
or eCommerce Website.

Get a FREE CRO Audit today
Our team will identify some quick wins on your website

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