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5 conversion rate optimisation findings retailers should know

By Robin Nichols

In April 2018, the CRO (Conversion Rate Optimisation) platform AB Tasty commissioned Forrester Consulting to conduct a study exploring conversion rate optimisation methodologies in five key industries, including retail/ecommerce. The aim was to identify forward-thinking firms that gain more than their peers from their CRO programmes.

To this end, Forrester Consulting administered a survey to 163 CRO and UX decision-makers in the UK, US and France, which dealt with their organisational, budgetary and methodological challenges and successes.

Below are 5 findings from the survey and final study that anyone working on CRO in the retail sector should know about.

1. Retail appears to lag behind in terms of CRO organisation

According to the final study, there are two defining characteristics of forward-thinking firms: the first is that they use a centre of excellence team to pilot CRO initiatives, and the second is that they adhere to a highly formalised process throughout their CRO programme. These firms reported better CRO results than their peers, including in average visitor value, lifetime customer value, and average order value.

Process is important to create guide posts so that organisations can work together. A process has to be designed so that it has enough flexibility so that creativity can still happen. So, process shouldn’t be structured so much that it restricts people from having creativity to come up with new ideas, but it should allow people to understand how to get those ideas tested and implemented properly.”

- Chris Goward, Founder of WiderFunnel (June 19, 2018 at the AB Tasty Conversion Summit)

However, when asked how their firm organises for CRO, only 12% of the retail/ecommerce respondents said they had, ‘a centre of excellence team, which manages and espouses best practices and coordinates programmes.’ Indeed, they came in last compared to the other four sectors surveyed: 25% of media, 24% of finance/insurance, 19% of eServices and 19% of travel/hospitality firms stated they used a centre of excellence team.

On average, 20% of all the firms surveyed used a centre of excellence team:

Base: 163 decision-makers responsible for conversion/experience optimisation

Source: A commissioned study conducted by Forrester Consulting on behalf of AB Tasty

So how are most retail firms organised instead? The majority (41%) say they work on CRO by ‘sharing of key internal resources between teams.’ Perhaps the average marketer who works in retail knows their CRO in and out, making a centre of excellence team redundant - but this could be an organisational approach to explore for firms looking to increase gain from their CRO programme.

2. Retailers overwhelmingly see the value of CRO

91% of retail/ecommerce respondents said their CRO program was either ‘extremely valuable’ or ‘valuable’ to achieve their organisation’s strategic goals.

This was in line with other industries, making the average across all five sectors an impressive 90%: 

Base: 163 decision-makers responsible for conversion/experience optimisation

Source: A commissioned study by Forrester Consulting on behalf of AB Tasty

Why were these firms so favourable in assessing their CRO program? Take a look at one of the charts from the study, which illustrates increases in key performance indicators thanks to CRO:

Again, we see above the bump in ROI experienced by forward-thinking firms (defined by their top-notch organisation and process).  Another key finding of the study was the impact of CRO, not only on business results, but also on client satisfaction. Indeed, according to the study, ‘94% of firms say their CRO initiatives have increased customer satisfaction.’

This just goes to show that the final goal of any CRO programme should be customer satisfaction. Especially in an ecommerce context, it’s tempting to use CRO tricks to boost KPIs like transaction rate or average order value in the short-term. Often, these tactics are perceived as ‘manipulative’ by the end user. Instead, CRO specialists should balance out short-term tactics with a long-term CRO strategy focussed on improving the customer experience. If done right, this creates a virtuous cycle which facilitates cross-sell, upsell, and client loyalty.

I really believe that conversion optimisation goes hand in hand not only with higher revenue, but also customer satisfaction, because for me, that really is the end goal of conversion optimisation or digital growth or whatever you want to call it. It’s not just getting the money now, because sometimes we can trick users in to buying something, but then we don’t have a happy client. The end goal should be a happy, loyal customer, customer retention.”

- Karl Gilis, UX Comedian and the ‘G’ in AGConsult, (June 19, 2018 at the AB Tasty Conversion Summit)

3. CRO budget is on the rise

Unsurprisingly, given the above finding, retailers reported that their overall budget for CRO (technology, support, services and staff), is on the rise for 2018: just over half retail/ecommerce respondents think it will increase in 2018 from 1% to 10%, and 33% say it will increase by 11% or more.

The big question then becomes, just how do you allocate this budget? Do you opt to build out your in-house team, or go for external consulting services from a vendor or agency? How much should you spend on technology solutions vs human resources? The final study delves into these questions in more detail.

We can also shed some more light on these issues by looking at a similar 2017 study conducted by ConversionXL (their survey sample included 333 optimisation specialists from around the globe). Many of their questions centred on budget and remuneration:

Source: 2017 State of Conversion Optimisation Report, CXL and Sentient Ascend

Source: 2017 State of Conversion Optimisation Report, CXL and Sentient Ascend

4. CRO has a direct impact on revenue

15% of retail/ecommerce respondents said that the top benefit from their CRO programme was increased revenue - compared to 12% for finance, 9% media, and 3% eServices. They were only narrowly beat out by travel and hospitality at 16%.

This is encouraging news for anyone working in CRO. Digital marketers sometimes get caught up in micro-conversions - tweaking a CTA, landing page copy or product spec. Decision-makers need to see that these efforts lead to visible increases in revenue down the conversion funnel. This finding helps legitimise the day to day work of CRO and UX professionals, as well as justify the increased CRO budget on the horizon.

5. Integration is a major CRO challenge

When asked, ‘What challenges do you experience in operating your CRO program?’, 33% of all those surveyed answered ‘Our CRO technology lacks integration.’ Retailers were just shy of the average, with 26% stating this was a challenge.

Integration between different digital assets like websites, mobile apps, and social media, but also between data sources such as DMPs, CRMs, or analytics tools and CRO platforms, means firms can better create a seamless customer experience.  Lack of integration naturally leads to a fragmented picture of the customer and their multiple touchpoints.

Takeaways

So, if we sum it up: though retailers seem to lag behind in terms of CRO organisation, they nonetheless recognise the strategic value of CRO, both in terms of producing business results as well as client satisfaction. This recognition is matched by an increased budget allocated to CRO for this year.

Finally, retailers, along with other industry specialists, recognise that CRO integration is a challenge, especially in order to create a unified vision of the customer.

Want more details? Download the full study: Maximise customer value through strategic conversion rate optimisation.

Robin Nichols, Content Marketing Manager, AB Tasty

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