Identifying & Interpreting The Key CRO Metrics

**Speaker 2 (00:02):** Business owners, do you want an unfair advantage over your competitors? Do you want to dominate in your area of expertise? You are listening to Business Life Hacks. Learn to influence consumer psychology and shortcut your way to business success with tips, tricks, and hacks from award-winning digital agency, J Marketing. I'm here today with Rafael Faleiro, Rafael, one of the world's leading experts in conversion rate optimisation. To get us started, Rafael, could you introduce yourself, tell us a little bit about your background and your role at J Marketing?

**Speaker 1 (00:45):** Sure. As time passes, you start to stop counting your days in the industry in years, and you start to count them in decades. I'm in my second decade in this area. Very passionate about things. So I started in 2008, which a lot has changed since then. But the basics are still the same. It's all about understanding people. And this is the part that I love the most about the job. In the end, we try to connect. We try to put ourselves in our client's shoes and understand how their head works, what are their true needs. And this is what I really love about it. And then we can provide solutions that are actually meant for them, that can give them the best experience possible. And conversion rate is all about that. So, removing the friction points, removing whatever is stopping them from moving forward, and giving them an easy way, easy next steps and things that they feel comfortable moving forward with. Instead of trying to force them to do anything, we simply provide a very clear path so that they can make their decisions. This is basically what I do at J Marketing as well.

**Speaker 1 (02:04):** Our objective is to meet the needs from when they're starting to do their search on Google or wherever, they're starting their journey and going through all the processes, the ads, the copy, the landing page, everything involved in their decision process will impact the conversion rate, and I touch all of those points.

**Speaker 2 (02:28):** Awesome. Glad to have you on the podcast today, Rafael. So briefly, I think that most people who are watching and listening to this podcast probably have a basic idea of what conversion rate optimisation is, but could you give a high-level overview of CRO and why it's so important?

**Speaker 1 (02:51):** Sure. Every business will have a conversion or more than one conversion. By conversion, we understand an important step in the process. Let's say that you have an e-commerce. An important step is people going to your website and adding things to the cart, or it could be the final purchase. If you are a service and you depend on people filling in a form, that could be your first conversion, could be what we call a soft conversion, like downloading an e-book and getting their email. And of course, the final conversion for most businesses is going to be the actual sale. So we have those intermediary conversions and the final conversions. The conversion rate is basically how many people you need to get one conversion. So let's talk about... Let's say that our focus is on increasing the number of people that fill in a form. The conversion rate basically states how many people you need to send to your website so that one of them is willing to give their phone number, address, and email address and start a conversation with you. Of course, the more people you need to send to your website costs money, effort, etc.

**Speaker 1 (04:09):** So the fewer people you need to send to your website to get the most conversions will make your business more cost-effective, will increase your ROI. And then there are several techniques that we can go deep into in this chat, but there are several ways for us to reduce the number of people that we need to send to the website to get one person that will start a conversation with you.

**Speaker 2 (04:35):** Right. There are a lot of different approaches to CRO. Most agencies, they just think CRO is about changing the colour of the website, changing the shape of a call-to-action button or whatever, and they just try a bunch of things, and eventually, maybe one of them works. They don't really know why, but whatever, as long as it works, it's all good. But at J Marketing, we approach CRO a little bit differently. We have our own system and methodology that's actually proven to work with CRO, and we know why it works. That makes us able to repeat the conversion rate optimisation. Could you tell us a little bit more about the J Marketing approach to CRO, how it's different from traditional approaches?

**Speaker 1

 (05:25):** Yeah. So, yes, our methodology is very different from what you will see in other agencies. Of course, the big guys already do it. So if you go to Amazon, Google, Facebook, they already have very precise ways and proven ways to increase their conversions. The basic difference is to rely on two big pillars before trying to guess what the solution is. So if you want to go down the guesswork path, it will cost you money, it will cost you time, it will cost you effort. And in the end, even if you eventually succeed, it will probably have cost you too much, even considering time is money. So, how can we reduce this process and increase reliability? The first pillar is to understand that humans, in the end, are humans, and we have a psychological approach to it. So we're probably going to get into the nine friction points that we address during our plan. And the second pillar is to rely on actual data. So designing an effective A/B test that will give us insights into how our audiences think, how they act, how they behave, and being able to design the correct A/B test, prove our theories and hypotheses quickly, and move forward to implementing the insights that we got from the A/B test, is a big differential.

**Speaker 1 (06:58):** So, a psychological approach and data-driven process.

**Speaker 2 (07:03):** Yeah, that helps us not only increase CRO effectively, but also we know exactly what we're doing every step of the way so we can repeat it effectively. You mentioned the nine frictions. Can you tell me a little bit more about what those are and how J Marketing uses that in its CRO efforts?

**Speaker 1 (07:26):** Sure. Friction points are basically questions that the audiences ask themselves during the decision-making process. And these questions often will stall them, paralyze them during the process until they can overcome them, if they do. So we can group them into three parts. The first would be the ones related to 'what'. So let's say that someone wants to buy a gift for their kid for Christmas. So the first 'what' is, what's the performance of this product? So if it's a toy, will it actually make my child happy? Will it actually deliver the deepest needs that I want to solve? The second one is durability. Will it entertain my child for just a week? Or is it something that's going to last for a longer time? The delivery. So for example, urgency. If I'm going to buy in an e-commerce, is it even going to get here before Christmas? Otherwise, it's useless. And there are other aspects to how it's delivered. Customer service. So, what if something goes wrong? Will I be able to call someone? Problems happen. People are used to that. The clients don't expect that problems won't happen. They know that things can happen, but they are really interested in what will happen if an issue occurs.

**Speaker 1 (09:03):** Will I be able to talk to someone, call someone, and things like that? So that's the customer service. This would be the first group of questions related to what is the solution that I'm looking at? The second is 'who'. So basically questions related to, can I trust the company that I'm doing business with? For example, first, expertise. If you're looking for a digital marketing agency, do you want to do business with someone who is just testing, starting in and trying to understand the process? Or do you want to talk with a real expert in the area? This is true for any solution, product, etc. that they are willing to do business with. The production capacity. So, is this person or company that I'm doing business with, can they actually... Do they have the capacity to address my needs, or am I too big for them, too small for them, too specific for them? Do they have a scalable solution? So do they have the capacity to actually deliver on my needs? The second is the similar clients' questions, or also known as social proof. The best way to describe this is imagine that you have a street with two restaurants.

**Speaker 1 (10:20):** One restaurant is empty and the other restaurant is full of people except for two or three tables. Where would you go? So most people would go to the restaurant that's full. But there's a catch there. It's only true if you have two restaurants, one of them is full of, let's say that you are 18 years old and you have a restaurant with people your age and another restaurant has people of a very different age from yours, you will probably go to the one that has clients more similar to you. So again, the social proof and similar clients. And finally, we get to the third group,

 which is the offer, which will include what's the price? Is the price fair? Are there any hidden costs on it? How's the return policy? What if something goes wrong? Can I return the product? Do we have any guarantee? So the offer in general. These are the basic steps. Of course, we need to ask these questions to the specific client, but those questions are true for any service, any product. The tailored part is to understand which of them are more relevant to the specific audience that we want to address.

**Speaker 1 (11:33):** But people are always people, again, and they are moved by very similar internal needs and very similar friction points as well.

**Speaker 2 (11:44):** Yeah, exactly. I mean, this is proven consumer psychology, so it's proven to work with a wide range of people. It's like you said, you just need to analyze the target audience to identify how we can address these nine frictions for members of the target audience. And this nine frictions system is certainly something that applies to all aspects of marketing and advertising, not just CRO. But coming back to CRO, specifically, so we have this system in place, now, say, a website's conversion rate isn't quite as high as you would like, how would you look at the numbers, the analytics, the stats, and try to determine which of these frictions that we discussed is actually stopping a visitor to the website from converting to a lead or a customer?

**Speaker 1 (12:40):** Okay. The first step is that the best way to get useful data is to plan a test. If you simply install your Google Analytics on your website and a posteriori, only after you try to look back at data and try to get insights, you might learn something from there. There's always insights to extract from there. But the best way is to design a test. So for example, we specifically want to know if urgency is a factor. There are tests that we can make to specifically get this answered. Let me bring a case of an IT client of ours. They solve issues of companies in the IT segment. And let's say that if you are a company and you have some urgent IT problem and your boss asks you to get this sorted as soon as possible, you go to the internet and you find five possible providers, and you see a form over there in each of them, and all of them require you to fill in the form. How would you feel? Probably a little bit of anxiety, right? Yes. I mean, yes, please, Alex. How would you feel in this situation?

**Speaker 2 (14:03):** Yeah, I would definitely feel anxiety. I would be confused. I wouldn't be sure what option to go with. Yeah.

**Speaker 1 (14:12):** Are they even going to reply to me on time? I need this urgently solved. And it's not just the company's needs, it's also the decision-maker's needs. So the person directly involved there, they promised their boss that they would look into it. So they also want to come back with a reliable and quick solution. And this is the psychology side of it. But we cannot simply assume things, otherwise, it would be guesswork. So our approach to specifically understand if addressing the urgency would be a way to increase the conversion rates, the number of people starting conversations with us. So we designed a test that would go the following. We know there's even a very good Harvard research about this that tells us that if we reply to people in the first one hour, we can increase by seven the chances of making business with them. Other research says that if it's below five minutes, it's even higher. So we wanted to know if this is also true for the form. And the company didn't have a way to reply to the customers in less than five minutes. So we got them to agree that for one week, we would do a test.

**Speaker 1 (15:33):** And during the working hours, they would have one person just to answer the leads in less than five minutes, and they would have a human resource dedicated to this. And we created an A/B test where we would send 50% of the traffic to the previous landing page, to the original landing page, and 50% to a very similar landing page, where the only change was that we added on top of the form a promise that we would reply to them in less than five minutes. We ran this test for a week, so we designed the test. This is going back to your question. Instead of simply trying to look at data and getting insights out of nowhere, we designed a specific test for it, and we discovered after this week that we were generating more than double the initial amount of leads. And then they made the internal changes. They hired someone to become dedicated to

 replying to the leads in less than five minutes. And the landing page now has this headline where we promise to reach back to the clients in less than five minutes. Imagine as a business from one month to the other without having to invest more in media or anything like that, the same amount of traffic, but generating twice as many useful leads, twice as many conversations to you.

**Speaker 1 (16:53):** Imagine the impact of this on any business. Back to the question then, one big difference in the approach of analyzing data is that we design the test to get the data that we want and less on trying to find the data out of a chaotic sample.

**Speaker 2 (17:16):** Yeah, exactly. So you have to design a specific test with a specific goal rather than just looking at all the data and trying to come up with some insight based on whatever your intuition. That's the way you have proof exactly what is causing the CRO to not be as good or what is leading to having a really good CRO. And of course, when you're designing these tests and analyzing the data and stuff, you have to use tools like Google Analytics. So can you talk a little bit more about how we use Google Analytics and other tools to collect CRO-related data and do tests and stuff?

**Speaker 1 (18:02):** Sure. Google Analytics, it has competitors, of course, but it's one of the major options. It will deliver a lot of data to you. And if we look today, we live a moment of abundance of data, and sometimes very little insights, very little knowledge, and actions that we can extract from this data. So the first point when setting up Google Analytics or any similar tool is to, first of all, ideally, we want to know the questions we want to answer in advance. So keeping the same logic, the same rationale. With these questions, we have to set up Google Analytics to be able to deliver those answers to us. So we do that by, first of all, understanding what are the steps that we want to measure, the triggers that will give us the conversion points in the decision process. Could be, for example, if it's a blog, could be time reading the page, could be if they are scrolling down until a certain point, could be the bounce rate, how many people leave the website. And it could also be the soft conversions like downloading an e-book, subscribing to a newsletter, watching a video for X amount of seconds.

**Speaker 1 (19:28):** So for each process, for each occasion, we would have to plan the exact points that we want to... That would be the milestones in the customer journey. And with that, we will be able to count and even attribute value to each of them. So we know that when someone watches a video for 90% of the video, we know that they suddenly have... They are three times more likely to start a conversation with us. So instead of going to the end of trying to get more people to start a conversation, we first need to see how can we improve the video to get people to watch at least 90% of it, and then, automatically, we are already increasing the lead rate. So summarizing. One, we want to know exactly in advance what are the questions that we want to get to answer. Two, we need to set up properly so that we can attribute conversion points and even conversion value to each of those points. And then, when we look at the process, it's very clear and obvious where we need to put more effort. If we have a certain step where we are already converting 90%, we would need to put a lot of effort to get it to 99% while there's another step where we only have a 10% conversion rate from one step to the other.

**Speaker 1 (20:55):** And whatever effort we put there would actually move the needle in the final results.

**Speaker 2 (21:04):** Yeah. So Google Analytics is pretty much the centre, I guess you could say, of our CRO efforts as far as collecting data and getting insights when it comes to websites. It's like you were saying, these days, getting the data isn't the problem. You can get tonnes and tonnes of data, but you have to make sure you set up your tools so you can get insights from just the data you need. Otherwise, you're going to be overwhelmed with a tonne of data and you won't know what to do with it. So obviously, Google Analytics is a very well-known and important tool for CRO for us and many other agencies. Are there any other tools related to CRO that you think are really important, maybe that aren't quite as well known as Google Analytics?

**Speaker 1 (21:56):** Yes, for sure. So there are tonnes of them. Of course, this

 list is always getting updated. We could mention tools that track the mouse movement, for example, and we know exactly where the attention is. There are other tools and processes for us to measure the quality of the lead. So something that a lot of clients come to us saying, "Oh, I do get a big quantity of leads, but not the right lead. So I have a very small conversion rate from leads to sale." And the action there is to be able to objectively qualify the lead. So it is possible with the correct setup to understand which campaigns and channels are generating the best leads and the best leads so that we can go back and say, "Well, this campaign is not working as it should. Let's adjust it or even reduce the budgets to it. This other campaign is going super well. It's generating not just a good quantity, but a good quality of leads. So let's invest more." And so being able to connect what happens before the client goes to the website, basically the channels, the traffic channels, what people are doing on a website, which is the focus of Google Analytics and other tools.

**Speaker 1 (23:19):** And then we can also have tools that are connected to what happens after they start a conversation. So in general, it's going to interact with the CRM, things like, say, Salesforce and other tools. So having methodologies to connect the three steps or the three phases of the lead is going to give us additional intelligence.

**Speaker 2 (23:43):** You've got to have a full stack of CRO tools and technologies to get an edge, especially now that everyone essentially knows CRO is incredibly important, everyone's putting a lot of effort into improving CRO, so you do have to have tools integrated with Google Analytics to keep improving your CRO as much as possible.

**Speaker 1 (24:06):** Segmenting your strategies is also super important. A very common mistake is to treat results on average. So there's a funny way to look at it. Imagine that you have your head in a very high temperature and your feet in a very low temperature. On average, you're good, maybe, but that's not telling the full story. So it is super important to segment your different strategies using Google Analytics and other tools to be able to pinpoint. Well, I'm happy on average, but you might discover that some channels are doing super well and other channels are just wasting money. And with this, you can take the correct action. So in your tracking tools, remember always to segment and break down the results and the individual results per strategy, per channel, per phase of the decision-making process.

**Speaker 2 (25:01):** Rafael, what are some key metrics that businesses should track to evaluate their CRO performance? I mean, obviously, beyond just how many visitors become leads, what are some more in-depth metrics that they should track?

**Speaker 1 (25:16):** Sure. So being redundant here, but I can't stress enough that it all starts with the questions. So determining the metrics will happen after we know exactly what are the questions that we want to ask. And the metrics is the how. The initial questions are the why. I'm going to give some examples, but with this in mind. So let's say that we want to track if we're sending the correct audience to our website. Maybe we're paying for campaigns that are sending the wrong people to our website. I'm going to give one example. We have a client which is a nursery, and we discovered it's a global client, and we discovered that in some regions, there are a lot of people searching for plant nurseries while our client is a child's nursery. And we were simply sending completely wrong people to the website. In this case, one big metric that we could use is the bounce rate. People that leave the website without even interacting at all. They don't read the page, they don't scroll down, they don't click in any place. So looking at the bounce rate is a very good KPI to know if we are even sending the right people to the website.

**Speaker 1 (26:39):** Another metric. Let's say that we want to know if our messaging is correct, if our selling point is correct. So we can look at the ads, something that will happen even before they arrive at our website, and we can look at the click rate. So for every 100 people that we show our ads, we are going to get how many to actually click on it and engage with it. So this way we should continuously A/B test and continuously get, let's say, three headlines. We are going to have three very different approaches to it. So in the nursery case, we could say, "Well, this is the best one. This is the nearest to you. And this is a government-certified one." Just three random examples.

 We test those and we can see for each specific audience. So this is something that if you have a global brand, for example, it's going to be different in different regions. So again, the fact that you know the one that's best for the average doesn't mean that it's going to be the best one for the different niches. So we break it down in a way that makes sense. So that's another metric, KPI.

**Speaker 1 (27:53):** We have the form-filling conversion rate. So how many people are... So let's say that a lot of people come to our website, they stay very long, they visit multiple pages. In other words, we have a very engaging website. We are actually delivering value. They're visiting our blog, they're watching our videos. They're just not giving their contact. So then we need to look at the specific KPI that will see for every 100 people that stay longer than 30 seconds on our website, how many of them fill in the form. So in summary, we do have a very long list of KPIs. The one big tip that I would give is start with the correct questions. If you can get the correct questions right, the metrics will be obvious. It's very easy to come with the best KPIs for this specific case if you start with the correct questions. If I could group them, they again would be things that happened before they come to the website. So the segmentation, you can see if metrics related to the audiences and segmentation, metrics related to the messaging, metrics related to the engagement inside the website, metrics related to starting conversations with us and showing a real interest.

**Speaker 1 (29:18):** We have some of them related to e-commerce, like actual payments, and we have the final ones related to the quality, which are, in general, extracted from the CRM. Exactly.

**Speaker 2 (29:31):** So it takes a certain level of expertise, not just to identify the key metrics, but also to see how the key metrics interact with each other and how to interpret the key metrics and take action. That's why businesses will, instead of trying to do this themselves, at least if they know enough to know that's not usually a good idea, that's why they'll hire experts like us at J Marketing, because it's not just about tracking data. You also have to be able to interpret how the data relates, different data points related to each other and how you can improve these metrics, right?

**Speaker 1 (30:14):** Yeah. There's a considerable amount of factors that we need to take into consideration, and it does sound tailored, and to an extent, it is. But in the end, there's not an infinite amount of KPIs. We do have a playbook, a process that it's almost like a conversion table that says this high combined with this low means that we need to take that amount of action. So it does sound and feel tailored, but in the end, there's a proven process behind it in very specific ways that we analyse the KPIs that are true for almost whatever business that we look at. So at the same time, expertise is super important. It's the starting point of anything. But also it's not scalable to do that without a strong and proven process that you can simply follow from the beginning to the end. And this is something that we focus a lot on in J Marketing. As they say, when you want something well done, don't do it yourself. So if you want to fix your bathroom, you really want it well done, don't try to do it yourself. I don't know what's your business exactly, but I'm sure that sometimes your clients will think that they can solve it by themselves.

**Speaker 1 (31:33):** And I do think that it is important and it can bring value to get the client involved, but we can make it way easier and even cheaper and faster because when we already bring history and expertise to the process.

**Speaker 2 (31:50):** Exactly. And of course, part of expertise is staying current with whatever evolution and trends. So obviously, digital marketing is constantly evolving. What do you think will happen in the future of conversion rate optimisation as far as new tools, new metrics, new strategies, etc?

**Speaker 1 (32:14):** Okay, so maybe before I talk about what's going to be new, I could start with what I don't think will ever change, which is that in the core of everything is human behaviour. As long as we continue to be humans, maybe if in the future AI takes over, then we can change this. But as long as we are humans, we are still driven by the same anxieties, the same needs, the same psychology and behaviour. So in the end, conversion rate is all

 about understanding humans, how they think, how they feel, and this will never change. But now moving to what will change, of course, we have some trends. AI is a buzzword. Wherever you go, wherever you watch, you'll find people talking about artificial intelligence. And this will probably play a major role in the near future. I can see that people that are not using, companies that are not using AI, will probably have a very hard time keeping up. But at the same time, companies that only rely on that will have more or less the same end. So being able to use AI as a tool, but continuing to be human-centered is for me the secret for the near future.

**Speaker 2 (35:02):** Yeah, I totally agree because you can use AI tools to help you collect data and analyse data, but I don't think any AI will ever understand human psychology as well as another human being.

**Speaker 1 (35:18):** We hope, right? Yeah, hopefully. I don't see it happening in the short- If we do, then we're in deep trouble.

**Speaker 2 (35:25):** But anyway.

**Speaker 1 (35:26):** It won't happen in the near future, I can say for sure. I'm an enthusiast. I know that you are as well, Alex. And yes, it's progressing super fast, but the human mind is still a closed box, a very complex box and just too many things to consider. And this human level, I still think that being a human to understand a human is a crucial part of the process.

**Speaker 2 (35:53):** Yes, totally agree. So before we sign off, do you have any final tips for businesses that want to improve their CRO?

**Speaker 1 (36:04):** Well, using the cliché, be a human being, put yourself in your client's shoes. Things that you don't like as a customer, probably your clients don't like as well. Don't overestimate your offer. Don't overestimate your solution. I think I've seen in the past clients that think, "Oh, I'm so awesome. My solution is so unique that I don't have to worry about conversion rate." This is a very basic mistake. So don't overestimate your offer or your solution, your product, your service, etc. Try to think as a user. Number two, when you do that, it will guide you to making the correct questions. And with the correct questions, then you're able to connect with an agency or an expert that will be able to help you get those questions answered. So this is maybe also a summary of the chat today. And a guide that I think that's a nevergreen way of looking at it. It's always going to make sense for you to be... It sounds like a cliché. So putting the client in the first place as their main focus. But seeing this and actually implementing a strategy that can effectively do that, there's a big gap between these two points, and trying to shorten this gap is certainly a winning strategy.

**Speaker 2 (37:27):** Right. And especially when you're specifically talking about conversion rate optimisation, the cliché of putting the user first. It's okay, people believe that, but to actually implement the actions that effectively put the user first, that, again, goes back to expertise as we were talking about, which is why it's difficult for businesses to improve their CRO as much as possible themselves. Because it has such a huge impact on the bottom line, it's definitely worth it for businesses to hire an agency like J Marketing, for example. Say the listeners are interested in working with you and your team at J Marketing to improve their CRO. How can they get started on that process?

**Speaker 1 (38:16):** So wherever you're watching this video, you will probably find the link, or if you're already on our blog, you can find the contact button here on the website. And we love talking to people. If you want to let us know a little bit more about your current situation, feel free to book some time with us. We have a team that's capable of listening, understanding, and together moving towards a solution.

**Speaker 2 (38:43):** Awesome. Yeah. Well, I think that wraps up our conversation. Thanks for coming on the podcast today, Rafael.

**Speaker 1 (38:49):** Thanks very much, Alex, and for everybody who's watching.