CRO Best Practices: all eyes on the customer lifetime value

Conversion rate optimization is hard work.

Whether I’ve been running my own business or helping other tech companies in marketing, the same issue persists: building a new campaign always attracts me more than improving dozens of other landing pages I’ve created in the past.

Which one is more likely to bring results? A completely new project or iterating existing ones?

Even if my mind is always craving for something new, I’ve got the best results by improving my website, landing pages, blog posts, email cadences, and any other marketing materials based on data and one step at a time. Quality over quantity.

How do you continuously optimize conversion rate?

An A/B test with two variations of a Google Ads landing page is one of the fastest to implement and most straightforward to measure. You’ll get a relatively cohesive audience compared to other traffic sources, and money provides a shortcut for ramping up the traffic quickly.

But creating a continuous and repeatable CRO process for everything you do is where the hard work begins and where you need tools, strategies, and a lot of patience and perseverance.

I recently interviewed several experts to reveal their conversion rate optimization best practices, and I’ve collected some of my favourite learnings and examples below.

Goals: Conversions or lifetime value?

I asked ChatGPT what the conversion rate means and received the following response:

“In digital marketing, conversion rate is the percentage of visitors to a website that complete a desired goal (a conversion) out of the total number of visitors. For example, if a website has 1000 visitors and 50 of them make a purchase, the conversion rate is 5%.”

While the statement is technically true, it doesn’t consider that a higher conversion rate can actually hurt your business.

For example, my grandfather sold products at a loss in his grocery store because it helped his business grow – a selected group of products was used to attract customers to visit the shop more often, and most physical stores used this tactic to increase sales over the long term.

But the same tactic doesn’t necessarily work in an e-commerce site or in a busy metropolis where you have an abundance of choice for providers and Amazon’s 1-day delivery of any product.

Just like in a grocery store, increasing an e-commerce site’s conversion rate is easy to do by cutting prices, but what truly matters is the customer lifetime value.

The customer lifetime value calculates the profitability of all purchases per customer – including a share of associated costs like post-purchase support, service maintenance, guarantees, product returns, and other similar costs. If a webshop or a SaaS optimizes its site just for conversions, it might attract the wrong type of customers.

When I was running another tech company in the past, some of our SaaS marketing tactics brought in quite a lot of one-time users who were either using our 14-day free trial or purchased the product for just one month. When calculating the amount of support work and marketing costs, those customers were not profitable – a higher conversion rate became meaningless and hurt our bottom line.

I learned it back then: always focus on the customer lifetime value when running a CRO process.

80% of the job is done in the CRO research phase

All experts I’ve interviewed regarding CRO best practices repeat the same: research is the most time-consuming part of the process.

It is not only time-consuming; if you fail research, everything else in the process is a waste of time.

What steps does the CRO research phase include?

Google Analytics, obviously. All the interviewees said they don’t specifically enjoy logging into Google Analytics, and finding any actionable insights is time-consuming. You can’t really tell in advance what you are looking for. I’ve always thought it’s just me who’s frustrated with the not-so-organized process of finding something relevant, but it seems that CRO experts feel the pain, too.

After reviewing Google Analytics data, most experts are keen to have a look at Hotjar’s heatmap data and user recordings – if they are available. Heatmaps and scroll maps help build a more precise picture around Google Analytics data, even if the data is not fully compatible between the two tools.

I’ve been using FullStory for user recordings in the past, and while recordings are super valuable and insightful, watching and analyzing videos is 100% manual work and takes a lot of time. Tools like June.so might help you get actionable insights faster and deliver them to you more consistently.

Finally, talking to customer service and sales teams and reading customer chats, surveys, reviews, etc., seem to be the favourite CRO research methods, and it’s easy to see why. Customer-generated content helps in all marketing activities – from website taglines to post-purchase emails.

Personalization drives conversions

Personalization increases sales and conversions on your website. One of the easiest tricks is to make sure you are showing prices in a local currency and that your users are directed to the most likely language version automatically based on their browser’s language.

I’ve sometimes built dynamic landing pages based on the traffic source, too. I must say they are a lot trickier to get right without proper 3rd party tools – making changes and scaling the same approach in multiple campaigns eats up time and resources.

With tools like Intellimize, you can add some dynamic features to any website, removing some of the manual work. For example, you can allow AI to recommend related products automatically, personalize the page based on the audience segment and user behaviour, and create rules to show different content based on the traffic source.

Effective personalization doesn’t happen only on websites, of course. A great example is an email sent out to you after abandoning your shopping basket right in the middle of the purchase journey.

Another example is the Spotify app, which builds you a playlist of new releases based on your previous listening history and taste. I love finding new artists from Spotify’s personalized “Release Radar” playlist every week.

Use social proof to drive sales

A fantastic conversion rate optimization example is to use social proof.

Social proof appears on websites in many forms – product reviews, testimonials, customer interviews, and user-generated social media content are the most common formats.

Recently, I helped a tech company create a Google Ads landing page for software that saves time streamlining business reporting. They’ve managed to catch a fantastic quote combining the customer’s struggle and pain when using the previous solution and the time-saving benefit of the new solution. All are included in one short sentence.

The quote should probably show up on all their pages.

Most webshops have customer reviews embedded on product pages. I like the approach where reviews include more than just the star rating and comment. For example, a furniture retailer might ask how easy it is to assemble the product and if the product page content, images, and videos match the reality of the delivered product.

If you run a B2C company, customer-generated social media posts embedded on your website are the most powerful social proof. With tools like Flockler, you can effortlessly embed Instagram images and videos on any webpage and tag them with your products. When customers click the embedded social media posts, they’ll immediately see the matching product.

Find new audiences via Google Ads and SEO data

Google Ads and SEO are my favourite marketing channels for B2B. Improving SEO brings new audiences to your website, increasing customer requests and feedback, which you can use in website optimization.

Search engine marketing has always felt much more predictable and measurable than many other marketing tactics. Of course, a fashion webshop owner might prioritize something different, like social media ads.

But suppose you are running a service – software or physical – and serving a broader market than just the local community. In that case, the chances are that you can use these three search engine marketing tactics to improve your conversion rates and go beyond the standard search engine optimization.

Firstly, when I run Google Ads campaigns, one of my most valuable reports is the search terms people used when the ad was shown. Because Google’s algorithms will find searches matching or related to my chosen keyword, the search terms list will always show phrases I’ve never thought of.

How closely related the search terms match my chosen keyword depends on my Google Ads campaign settings, but I sometimes use Google Ads as a research tool and validate if there’s search traffic at all.

Especially if I’ve just started working with a new company or if we have new features and services, Google Ads gives me an opportunity to quickly test the market before doubling down with my content creation.

Secondly, I use Semrush to explore related keywords and phrases. I type in a keyword related to my product or a new feature I’ve been working on and then see what other terms Semrush suggests.

Next, I look at the top search results to learn how others talk about the topic and if there are content ideas that would potentially resonate with my audience.

Thirdly, I use various SEO tools to compare my website against competitors, see where there are content gaps, and which search terms direct traffic to their websites. I’m not looking to copy any of my competitors’ work, but I’ll seek inspiration on content ideas I haven’t paid attention to just yet.

For example, I realized the other day that 'SaaS marketing' could be a relevant term for our blog – based on competitor analysis.

Never stop testing

CRO is not a one-off task, and I need a handful of content optimization tools to keep me on track with my progress.

Recently, I came across a tweet regarding CTA buttons. The author has been testing if the conversion rate improves when they change links to CTA buttons in a regular customer email.

And the buttons do increase the conversion rate quite substantially.

But even if something works for another company, it doesn’t mean it will work on your website. Therefore, it’s essential to build a process where you always keep testing and reviewing your CRO metrics.

Automate all parts of the CRO process – if you can.

For example, some website builders allow you to set A/B tests effortlessly and run variations of your landing page. They won’t run the CRO process for you, but at least you can automate the test’s data collection and analytics.

Conclusion

If I had to summarize the key learnings from the CRO expert interviews in one sentence, I’d say conversation rate optimization is challenging work, but with the right tools and persistently following the best practices, you’ll find more customers with a high lifetime value.