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Although the emphasis on the importance of conversion rate has increased today, many companies still neglect conversion rate optimization. Suppose you want to ensure your business is one step ahead of your competitors. In that case, you must prioritize conversion rate optimization because if you fail to convert your prospects into paying customers, you won’t profit. The next problem companies are struggling with is that they don’t know how to set a budget for CRO. In this article, we answer all your possible questions about CRO budgeting process.
Note: Improving conversion rate is a never-ending process. No matter how many obstacles are in your customer’s journey, you must try your best to identify and fix them. Using a behavior analytics tool like WatchThemLive makes the process easier. Continue reading to figure out how.
Why Is Conversion Rate Optimization Important?
The purpose of conversion rate optimization is to increase the number of users who complete your desired actions. These desired actions can include making a purchase, signing up on your website, or clicking the ‘add to cart’ button. You need to focus on CRO because it helps you improve your website to increase revenue. Although CRO and SEO should go hand in hand, you need to invest more in CRO to improve your website’s conversion rates. This is why CRO is important.
To improve your conversions, you need to understand how customers interact with your website. Imagine your prospects reached the end of your conversion funnel but encountered a problem during their sign-up process and suddenly dropped off. So how could you know that there was a problem in their journey?
Besides the other CRO tools, we highly recommend WatchThemLive, which lets you identify your website’s pain points in no time. It has all the features you need to improve your website performance. One of its helpful features is session replay software. With session replay, your team can see all user’s activities on your website; so they can easily find and fix their problems. Sign up to get instant access to WatchThemLive’s session replay.
Remember, finding your funnel leaks and fixing them doesn’t mean you’re done with CRO. As the picture below shows, CRO is not a quick fix; it’s an endless process, so if you want to be successful, repeat the process over and over.
Should You Even Pay for Conversion Rate Optimization?
All of us know money talks, and I don’t think anyone could underestimate the value of time and money, especially in marketing and business. CRO specialists still discuss how much one should spend on CRO. It’s not enough to just push your prospects toward the end of your sales funnel without investing your money and time. For example, you can spend more time creating high-quality content and powerful CTAs to make sure that your prospects complete your desired action.
A digital marketing optimization survey by Enconsultancy in 2013 shows that companies spend “less than 5 percent of their entire marketing budgets on conversion optimization activities.” By putting little but focused effort into your CRO, you can increase your revenue by millions.
A survey by Trust Radius in 2014 shows that “44 percent of companies surveyed spend more than $10,000 a year for A/B testing products.” It means little by little, companies have come to understand the immense power of CRO.
How Much Should You Spend on Conversion Rate Optimization?
Remember, you get what you pay for. It means how much money you spend on conversion rate; you get so much in return. One of the purposes of conversion rate optimization is to reduce your customer per acquisition. According to Unbounce, the best amount of money you can spend on your conversion rate optimization is $3000 – 30 percent of your marketing budget – so you get 17,500 visitors, a 1.75 % conversion rate, and 306.25 new customers.
How to Set a CRO Budget
The first step you need to take is to talk to your manager and convince him to prepare a budget for CRO activities; then, start calculating your lead value to set a CRO budget. For example, if your average lead value is $5, it means you’re generating 5000 leads every month, so you can invest $25000 in setting up CRO tools and a team. The more lead values you have in your pocket, the more you can invest in CRO budget. Next, set budget for your conversion goals, calculate your present conversion rate, and set benchmarks to build a CRO test that aligns with your goals.
What Are the Benefits of Creating a Dedicated CRO Budget?
In order to create a CRO budget to increase your conversion rate, you can hire CRO agencies or use an in-house team, depending on your company and your needs. In the next part, we will explain the benefits of each option.
As Harry Cederbaum says, “To us, it’s just as important to spend on CRO as it is to spend on our advertising or our creatives”, so creating a separate CRO budget enables you to hire a CRO agency or an in-house team to create an effective CRO testing roadmap and helps you align your CRO strategies with your goals.
What Are the Benefits of Working with a CRO Agency?
When you work with a CRO agency, you can get a better result, and it’s not out of mind, but first, you need to consider the CRO skills of your existing marketing team. Sometimes, your marketing team already understands your CRO, and you can put your focus on the process instead of spending time hiring an agency or a new person.
In contrast, many marketing teams might not have enough skills to understand CRO; in that case, you can ask for help. So it highly depends on your company and your needs. Here are some reasons that demonstrate working with CRO agencies is better:
1. Better Experience Equals Better Results
Since the CRO agencies work with different clients, they have more experience and know the ropes of the business, so they can create a unique CRO strategy that can confirm the purposes and values of your business.
Moreover, working with a CRO agency can be a time-saving alternative in comparison to hiring a new team member since it takes more time.
2. Better Use of Budget
It’s unrealistic to expect one person to focus on all conversion points of your funnel, no matter how talented they are. Since the two heads are better than one, working with a CRO agency with different experienced members is better because how much you pay to one in-house person can be split among the team members. And you will get better results.
3. Receiving Consultation
Due to the cooperation with different clients on different platforms, a good CRO agency can guide you to make decision easier and help you avoid making the same mistake twice.
What Are the Benefits of Bringing CRO In-house?
Regarding the conditions within your business, first you can work with CRO agencies and then shift into working with an in-house CRO team because one of the aims of CRO agencies is to help companies build their own in-house CRO program and increase the collaboration among team members. Moreover, an in-house team can solely focus on your company and get to know it better because they don’t deal with other clients.
Conclusion
In this article, we discussed why it is important to invest in conversion rate optimization, even though many companies still underestimate the immense power of CRO and prefer to use their budget for traffic acquisition. As investing in your CRO highly impacts your revenue, ROI, and customer lifetime value, why are you still hesitating?
Remember, AN OUNCE OF PREVENTION IS WORTH A POUND OF CURE. Before budgeting for CRO, make sure that you don’t waste your marketing budget. Besides, WatchThemLive helps you understand at which point of your conversion funnel you may lose customers. So you can fix them, boost your conversion rate, increase your lead value, and ultimately set a separate budget for your company. Act before it’s too late and sign up.
