The Value Equation: How to Predict if People Will Convert
In this installment, Greg and Mark from Think Around Corners discuss a basic equation in conversion rate optimization. You will learn why CRO is just as important as SEO, and how you can start seeing better conversions by using this equation on your own website.
CRO is the Next Evolution of
What You Should Be Focusing On.
In the past, many have focused on the benefits of strong SEO and acquisition. While we don’t advocate shunning SEO, as conversion rate experts, we do encourage business owners to focus on the bigger picture:
CRO focuses on keeping people on your website, while SEO focuses on getting people to your website. And although everyone loves traffic, we’ve found that most business owners enjoy seeing conversions even more.
Conversions themselves can be defined in a variety of ways:
• Calling you on the phone
• Filling out a form
• Sign Up for newsletter
• Download a whitepaper
• Visit social media sites
• Making a purchase
If people don’t stay on your website, getting them to your website is a time and money cost investment that doesn’t pay off. -@thinkocorners
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Why Should I Care About
Conversion Rate Optimization (CRO)?
When trying to sell someone on social media, SEO or PPC, the question of ROI always comes into the conversation. Why? Because businesses must make money. Without money, the business will fail. Therefore, seeing a strong return on investment is of paramount importance.
Conversion optimization makes a pathway for ROI. It keeps people moving through your website and down the sales funnel. You can attract as much traffic as you want, but all the efforts are in vain if you don’t convert the audience. As Greg says in the video,
“If people don’t stay on your website, getting them to your website can be a time and money cost investment that does not yield results.”
So, simply put: You should care about conversion optimization because it makes everything else you do worth the investment.
Using the Value Equation to
Make Conversions Out of Traffic
Everything offered on websites and in business leads a prospect to the ultimate goal of converting. However, if the benefit of your offering does not outweigh the cost, customers will not perceive it as valuable enough to make the conversion.
You must outline your conversion offerings in a way that prospects understand that it is worth the cost investment.
Something important to note here: “Cost” is not alienated to a money value. In fact, there are many things customers see as a cost that many website owners overlook.
How Customers View Cost
TIM (time, information & money) are things customers value high enough to be considered a cost investment. As a consumer, you can certainly relate to this understanding.
1. You value your time, because you can never get it back.
As people living in a very busy world, we are constantly looking for ways to save time or use it more wisely. Many have invested money into tools, books and programs that help them use their time more efficiently.
Because of this, we must realize that there is a level at which a person’s time becomes more valuable than even money itself. For example, you could initiate a sale for 70% off one of your leading products. However, if it takes a erroneously long time for your site to load due to poor website optimization, there will actually be a percentage of those people that leave without ever taking advantage of the deal.
Why? Because they value their time very highly.
Some other elements of time cost that play into a website:
• how long it takes to fill out the form
• how long it takes to find the product
• how long it takes to find product specifics
• how long it takes to go through the conversion funnel
It’s all about how long it takes. The more time investment a specific thing requires, the more cost you must add into the Value Equation.
2. You value your information, because you know how giving away too much can lead even more cost.
People are very careful with the information they give away.
They know that when they hand over their email address, they will likely start receiving emails from you on a regular basis. If these email benefit them, that’s great. However, they may view the potential of receiving emails as a cost investment (of time) that they aren’t willing to make.
There is often a high price for a cost investment (of information), because it may lead to a further investment of time. And, as we’ve already discussed, people highly value their time.
A cost investment of information also correlates with time investment based on the amount of information you ask for on a form.
If you ask a person to fill out several fields for a newsletter signup, for example, you may find conversions low simply because people aren’t willing to make the time investment of giving you all that information. And it also raises the question, “What are they doing with all this information?”
3. You value your money, because you worked hard for it.
This one is pretty self explanatory.
Q: Why should someone hand over their hard earned cash to you?
A: Because the value of what you’re offering outweighs all the time, information and money investment they’re about to make.
If it’s not valuable, it’s not going to convert. Plain and simple.
This basic principle of conversion rate optimization lays the foundation of every campaign initiative you create. There is plenty of science to making your products convert better. That’s what we do as a leading optimization company, and that’s what your website must include to succeed.
However, one of the best things you can do starts with asking yourself,
“Will my customers see this as more valuable than the cost investment required?”