What is Conversion Rate Optimization? (+ Common Myths and Misunderstandings)

You’ve landed on this article for one of two reasons.

The first (most probable) reason is that you heard the term “conversion rate optimization” somewhere and want to know what exactly it means and maybe even want to find out how you can get involved in conversion rate optimization (CRO).

The second reason is that you’re a reader of my blog and want to know what *I* think about conversion optimization. More so, I’m guessing you want to know if my understanding differs from conventional wisdom, and if so, how. If you’re in this camp, you’re probably okay reading a couple thousand words, but the former camp probably wants 500, so I’ll tackle the simple definition first.

Then, latter group, let’s explore what I think conversion rate optimization is all about and why so many people seem to misunderstand it.

Table of contents:

Primero! The definition:

What is Conversion Rate Optimization (CRO)?

Conversion Rate Optimization is the systematic process of increasing the rate at which a digital population will take a desired action.

If you Google “conversion rate optimization,” almost very blog post about CRO says pretty much that same definition. What does it mean? Let’s dive into the individual components of that definition.

What’s a Conversion Rate?

A conversion rate is the amount of unique desired actions divided by the overall of visitors. In simple terms, let’s say you sell candles. 1000 people come to your web page per day to look at candles, but only 50 of them buy from you. Your ecommerce conversion rate is 5%.

Conversion rate is the number of conversions divided by the number of visitors. It’s a proportion, usually represented by a percentage.

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Things get a bit more complicated when you realize you can define your numerator (and denominator) differently. For instance, are you counting total sessions, total pageviews, or total users? Each produces a different conversion rate.

Similarly, in a lead generation system, you might be measuring the total number of unique visitors who hit a landing page for an offer, and you might consider it a conversion when they fill out a form.

However, you may want to track that conversion further down the funnel to when they buy your product. If you have 1000 unique website visitors, and 100 fill out the form and 10 buy the product, then your conversion rate could be 10% (visitor to lead form) or 1% (visitor to purchase) depending on how you define it.

How Does Conversion Optimization Relate to Conversion Rate?

If you know your average conversion rate (however you define), the next obvious question is, “how can I improve it?” A higher conversion rate means you make more money with the same amount of website traffic, so it’s a logical aspiration.

How you answer that question is, in essence, conversion rate optimization.

There are many ways to approach optimization, though it can typically be described or structured using a repeatable process or system instead of randomly trying different ideas. As Peep Laja put it, “Conversion optimization – when done right – is a systematic, repeatable, teachable process.”

What’s the CRO Process?

There are many different ways to visualize the conversion rate optimization process, but most processes boil down to these steps:

  • Identify your goals + implement data tracking
  • Conversion research and audit
  • Run experiments
  • Analyze the data and make a decision
  • Repeat

Again, there are many different ways to visual this process, but most look kind of like this:

conversion rate optimization process1

Image Source

The conversion research process could include many components (session replays, digital analytics like Google Analytics, heatmaps, customer surveys, etc.), but in most cases you’re just trying to ‘diagnose’ the problem areas and opportunities on your website that you could improve to increase conversions.

What Actually *Is* a Conversion?

By the way, your “desired action” or “conversion” can be any discrete event that occurs on your website (actually, it could be a continuous variable like revenue per visitor, too, but we’ll leave that out of the discussion for now).

For instance, if you’re operating a content-based website that monetizes via affiliate links, your conversion event might be signing up for an affiliate offer. It could also be signing up for an email list.

For an ecommerce conversion, an obvious “conversion event” would be “transactions,” but you may also want to optimize for a composite metric like “average revenue per visitor,” or “average transaction value.”

You conversion goals will vary based on the type of business you run.

Macro-Conversions vs. Micro-Conversions

There’s a debate around two types of conversions:

  • Macro-conversions
  • Micro-conversions

This debate is mostly a non-issue. Here’s what it boils down to:

Macro-conversions are basically conversion events that are actually important to the business, whereas micro-conversions signal engagement. These, of course, are up to you to specifically define in your own business. There’s no universal definition of a ‘macro-conversion,’ which in my opinion, makes the debate pretty trite.

A macro-conversion could be buying something from your ecommerce site, and in this context, you might define a micro-conversion as something contributing to that ‘final’ conversions – click throughs on a promotional banner, viewing a product page, adding an item to a shopping cart (add to cart conversion rate), completing a checkout step, etc.

Anyway, here’s what you should know about macro and micro-conversions: optimize for what matters. No one gives a shit how many people added items to their cart if they don’t purchase, so just avoid time-wasting conversations and optimize for business metrics that matter to your bottom line.

Does the term “Conversion Rate Optimization” Accurately Describe What We Do?

The “conversion” part of “conversion rate optimization,” then, isn’t so straightforward.

That, in fact, is the gist of most social media debates on the terminology of conversion rate optimization.

Many argue that the acronym “CRO” isn’t actually ideal, as most optimizers aren’t only optimizing for conversion rates (and actually, it would be rather myopic to do so in many circumstances).

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Despite the lossiness the term “CRO” entails, I find it’s a mostly appropriate denomination that at least provides an envelope for what we all do.

Sure, we optimize more than conversion rates. But SEOs work on more than just search engines (optimizing, in many cases, similar real estate that CROs work on). And God only knows what a growth marketer does…

Again, what we do is build systems to increase the rate at which a population completes a desired action. The fact that this definition is simultaneously vague and specific is its power, but is also why so many people are confused about the term.

Confusion about the term goes in two directions – either people have a far too specific idea as to what CRO is, or it is far too expansive and starts to creep into purposefully-delineated business units.

For the pedantic among us, here’s a list of things conversion rate optimization is *not*

CRO Myths: What Conversion Rate Optimization Isn’t

Sometimes, the best way to define something is by what it’s not, via negativa style.

CRO is not a list of tactics or best practices

Most crafts have their informally ordained set of ‘best practices.’

In SEO, one might run through a checklist when auditing a website to look for proper internal linking structure, descriptive meta-descriptions, and title tags that are shorter than 60 characters. Copywriters can follow formulas like AIDA and audit copy for vapid gobbledygook and meaningless jargon.

Conversion rate optimizers, then, are expected to have a heuristic-based framework they can apply to any given landing pages, a veritable toolkit of “things that work” they can use anywhere.

This myth is pernicious and damaging for a few reasons.

First, while there are certainly patterns that work more often than not, there’s clearly heterogeneity and variance in how they apply.

Even if the median uplift of, say, removing social media share icons from product pages is positive, that doesn’t mean it’s positive in all cases. In fact, that median uplift could be balanced out by some massive losses on some sites. You’ll never know unless you test it for yourself.

Second, one must question *where* these best practices come from. Many of them are backed up by substantial qualitative literature (usually originated via psychology research or from a usability company like Baymard). This is great and a lovely use of research to form the basis of hypotheses.

Sometimes, however, best practices originate from hyperbolic blog posts and BS case studies (“How we increased conversions by 923% with this one tactic”). These are often based on faulty statistics and are more similar to a PR campaign than peer-reviewed evidence.

Finally, if you’re always chasing the median, you’ll always be behind the leaders.

Looking at historical data only tells you what worked in the past (among the total data set of what has been tried). Net new ideas don’t often show up in historical data, so if you’re chasing a list of best practices, you’re never likely to lead or innovate.

CRO is not the application of persuasion tactics

Similarly, CRO isn’t a synonym for digital persuasion. Lots of SaaS companies have popped up that claim to be “CRO software,” because they allow you to easily sprinkle social proof on your landing pages.

This belief, I think, originated because of the thought leadership and prominence of Booking.com, one of the world’s greatest experimentation companies.

They test everything. They run thousands of tests per year, allowing everyone at the company to run experiments. They’re a model of what a good experimentation program should look like.

But on the surface, if you’re a consumer, all you see are their (sometimes frustrating) persuasion triggers that play on FOMO, urgency, social proof, and the fact that dumb-old-you is about to miss out on the deal of the century because you hesitated for too long:

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Tactics like this can be an emergent property of the conversion rate optimization process. But by themselves, isolated, they are not CRO.

And just because you work in CRO doesn’t mean you know, at a glance, how to apply persuasion methods like social proof in a way that will actually work better than the control. Expertise can help form better ideas, but we still need to test them. Better yet: open the floor to let *anyone* submit and test their ideas.

A CRO professional doesn’t have a monopoly on web persuasion insight, and your best ideas are probably going to come from unexpected sources.

CRO is not adding a CTA to a blog post

Content marketers have begun using the term “conversion rate optimization” to mean building out a conversion funnel: land on a blog post, click CTA, sign up for ebook → converted.

Adding a CTA button could be an action item that comes up during the CRO process, but adding a CTA by itself isn’t CRO. It’s just good online marketing practice. It’s just inbound marketing. If you don’t currently have a call to action, adding one will quite likely increase conversions.

Now, if you had a hundred blog posts of varying conversion rates, dug into the data to figure out which ones could be optimized, and tested out various conversion pathways….that would be CRO!

But just planning to put some CTAs or pop-ups on blog posts is just an extension of a content marketer’s job.

CRO is not SEO

For some reason, people confuse CRO and SEO, but they’re different. SEO seeks to drive traffic via search engines. CRO seeks to improve the rate at which traffic – from any source – converts.

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There’s overlap, but they’re obviously different functions. Additionally, I look at SEO as a channel and CRO as a methodology. CRO can be applied to SEO, but SEO cannot be applied to CRO.

CRO is not A/B Testing

Experimentation is the gold standard of quantitative research, but it’s one of many tools in the CRO toolkit. Often a testing roadmap is the centerpiece of one’s efforts, but A/B testing (or multivariate testing) and conversion rate optimization aren’t synonymous (if only because you can do CRO without running A/B tests).

That said, conversion optimization strategy generally includes experimentation as a central research tool. Split testing helps take the guesswork out of which different versions of your site work better.

CRO is not an ever expansive set of optimization related prerogatives spanning an organization and beyond

Concept creep is a psychological phenomenon where slowly and unconsciously, the boundaries that define concepts and categories erode and expand. I’ve seen this happen in the CRO community.

‘Our role is valuable in pricing, go to market, value proposition definition, and positioning, so the name “CRO” should really be “business strategy optimization.”’

‘Your job as a CRO is to root out analytics implementation errors, fix technical bottlenecks across digital properties, write stunning copy on landing pages and Facebook ads, connect our offline and online data, and perhaps even optimize our sales process and scripts.’

Oof.

When I hear expansionist definitions like this, I get anxiety.

I get that a role like CRO is cross-functional and the insights gleaned through experiments and conversion research can help other teams, but a CRO is not some all-encompassing digital jedi that touches every part of one’s online business. That’s a recipe for burnout and a half-assed job in the million places you try to apply the process.

CRO isn’t the only sphere where this happens. I’ve heard thought leaders and gurus proclaim that growth marketers should be experts in everything from finance and accounting to HR and of course every marketing channel plus SQL.

Maybe you should just pony up to hire more people?

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If you have the above skillset, you’re a founder, or at the very least a VP – not an individual contributor.

I’m all for learning and growing and being ambitious, but let’s reign ourselves in a bit, yeah?

CRO is not updating a web experience or copy

Redesigning your landing pages and changing your website copy to reflect a new product launch isn’t really conversion rate optimization. Business priorities change, so of course the content of your website and your website design will change.

However, you can indeed perform a website redesign using a CRO methodology. You can definitely update copy and positioning using a CRO process. And you definitely should!

How is CRO Different From UX (or Growth Marketing/Growth Hacking/Web Strategy/Experimentation/Product Management/etc)?

User experience design and conversion rate optimization are super similar: both use user research to inform digital experience decisions. Both disciplines seek to improve the shopping experience.

The main difference is tautological: a conversion rate optimization professional seeks to optimize conversion rates and the user experience professional seeks to optimize the user experience.

The rub? How you define “conversion rate” and “user experience” can and should converge in many contexts. Here enters the importance of defining our north star metric (or the Overall Evaluation Criterion). Where we set our aims defines the tactics we use to accomplish it.

If we’re seeking to maximize business value, there may be a trade-off in the utility of a great user experience. As my friend Chad Sanderson put it, you could increase the user experience of Bing by removing all ads, but that wouldn’t be a very good business decision.

In the end, UX and CRO are typically two intertwined systems that can act as a push and pull on each other, but they both use research-based systems to improve digital experience.

I won’t touch heavily on growth marketers, because I think that’s one of the most useless designations in marketing today (I’m saying that with “growth marketer” on my official job title).

“Growth” is a function that overlaps product and marketing, but “growth marketing” in practice is usually either your run of the mill performance marketer (running paid, direct response campaigns at scale) or is sort of a blend between a generalist marketer who uses experimentation and ideas from CRO to accomplish their goals.

I think the term is bloated and has mostly lost its initial value at this point.

Finally, I believe the closest role-based relative of a conversion rate optimization professional is a product manager, specifically a “website product manager” or a “web strategy manager.”

This role typically blends SEO, UX, and experimentation into a product management skillset to apply the CRO methodology to a website. Instead of building a product feature roadmap, you’re building a testing roadmap. It’s basically the same skillset applied to a different context.

In the end, these roles tend to goal themselves on similar things and use similar systems to get there: capturing and utilizing data in order to make better decisions that improve business metrics.

Now, for some more contrarian CRO opinions:

  • It’s not something a specific person *does” but rather something that an operations team enables
  • The best organizations build this into their culture instead of stapling it on top of things they already do.

CRO is an Operating System (Not a Tactic)

Alright, if you’ve made it this far, you’ll spare me a few paragraphs to dive into the minutia: I don’t believe a “CRO specialist” should be a singular role at an organization.

I believe CRO is a methodology or an operating system, something that a centralized team can and should enable, but not something that should be the exclusive domain of a centralized team or especially of an individual.

Typically, CRO in an organization is either structured as a centralized or decentralized function:

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In a centralized function, you have one team who owns the infrastructure, the program management, and the tactical execution. They run the research and run all the tests.

In a decentralized structure, there’s not center – everyone conducts their own analyses and runs their own experiments.

There are clear pros and cons to each, but the best model is a “Center of Excellence” model. This blends the best of both worlds, and instead of controlling all CRO and experimentation, the function acts as an enablement, education, and infrastructure system. Here’s how Ronny Kohavi describes it:

“A third option is to have some data scientists in a centralized function and others within the different business units. (Microsoft uses this approach.) A center of excellence focuses mostly on the design, execution, and analysis of controlled experiments. It significantly lowers the time and resources those tasks require by building a companywide experimentation platform and related tools. It can also spread best testing practices throughout the organization by hosting classes, labs, and conferences.”

In essence, I don’t think that a single person can or should “own” CRO at a company. Rather, CRO is a system designed to input data and feedback and output better decisions and more money.

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I’ll admit this is sort of an idealistic vision. CRO, instead of being layered on top of your existing tactics, channels, and roles as an additional action, should simply be a part of the culture and company operating system. CRO isn’t a channel or a tactic, it’s a way of performing your job.

I wrote a full article on this topic on MarketingLand if you’d like to further explore this idea.

Conclusion

Conversion Rate Optimization is the systematic process of increasing the rate at which a digital population takes a desired action.

It’s not only fun, but it’s efficient. You take the same number of traffic or users or ad spend, and squeeze out more results using the scientific method.

If you want to get really good at CRO, the best place to go is CXL Institute. They’ve got a CRO mini-degree that will make you a master of the craft.

Further reading and resources:

Alex Birkett
Alex Birkett is a Growth Marketer and Content Strategist based in Austin, Texas. He's a proud UW-Madison graduate and enjoys craft beer, lifting weights, and sailing.

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