Convincing Your Boss to Invest In CRO

Speaker 1: 0:15

So if you've been following our podcast for a little while, you might be familiar with award-winning digital agency J Marketing.

Speaker 2: 0:26

So if you've been following our podcast for a little while, you already know how important conversion rate optimization is. It has a huge effect on your business's bottom line, but not everyone understands how directly increasing conversion rates can lead to increased profits for your business. There's a good chance that some of our listeners out there are in a position where they want to convince their management, their boss, to invest in conversion rate optimization, but they don't quite know how to go about it. So here to talk with us about that today is Rafa Feliz. Thanks for coming on the podcast, rafa, you're welcome.

Speaker 3: 1:09

Yeah, that's a very common issue. Sometimes we have some managers that need to convince themselves that they're taking the right step, so I'm here to provide some light into the issue. What is the math? What are the variables involved in comparing the CRO, optimizing the landing page and maybe investing on media? What's the perfect balance between both of them?

Speaker 2: 1:33

Yeah, absolutely so. I think, if we're trying to get across the importance of CRO as quickly as possible which a lot of times we do find ourselves in that situation because some people we're talking to they might have short attention spans or might have to make sure to focus on the most impactful stats to try and convince them. One stat that I found when I was doing research for this podcast is the average conversion rate for website traffic across all industries is only 2.9%. Some people might think well, by increased by conversion rate by 1%, what difference is that going to make? But if it's 2.9% and you increase it by 1%, that's like what a 35% bump. So what sort of stats would you use or arguments would you use when trying to convince people about the importance of CRO?

Speaker 3: 2:28

Sure. Well, thanks for the question. Maybe it's one of the most important points that you should look at when starting a campaign. If you allow me to briefly recap for everybody, what exactly is the conversion rate and the conversion rate optimization? Let's get a tangible example. Let's say that you take 100 people to your website every day through paid media. Right, If out of those 100 people, you can generate two leads, it means that your conversion rate is 2%. If you make it three, as you mentioned, it's now 50% higher. So, but what's the impact of that in your other KPIs, in your revenue, in your business? Well, to start with, if you spend, let's say that you could bring it up to four, which is, most of the times, not that difficult because the average is very low. Okay, so you have two. We're going to make it up to four Many times with most of our clients we're going to. I can bring some examples here. There are some examples that we can bring it up to 30% or even more, just to give everybody the possibilities, a grasp of the possibilities. But we'll start to bring it up to four. So, for every 100 people that went to your website, previously you had two people converting and now you have four. If you have the same traffic in the same period of 30 days or one day, you will have generated twice as many leads. So if you were generating 60 leads, now you have 60 quality conversations being started, so twice as many opportunities to generate business.

Speaker 3: 4:05

So my first question is what would change in your business if you had twice as many people interested in your solution? But it doesn't stop there, because there are more consequences. Let's look at some other KPIs. If it goes from two to four, and let's say that you're spending $10 per person that you send to you, you use paid media, you're using Google search or LinkedIn and you spend an average $10 per person that you send to your website. To send 100 people, you would be spending $1,000, right? So if you spend $1,000 a day and you can convert two people on average, you're spending $500 per interested person per conversation that you start. But now let's suppose that you could raise that up from two to four. Now you are spending the same $1,000, but now you're generating four business opportunities. So your cost per opportunity is now $250.

Speaker 2: 5:06

250. It's important to understand, like you were saying, just how massive increasing conversions from two to four per day can be. Not only can it massively increase your profit, but also it can take you from the point where you're basically losing money whenever you invest in advertising. So the more you spend on advertising, the more you lose, to the point where you're actually making a profit on your investment advertising. So the more you spend on advertising, the more you lose, to the point where you're actually making a profit on your investment advertising. So the more you spend on advertising, the more profit you make. Yeah, so absolutely. Of course, you know conversions are directly related to revenue, but there's also other ways that you know increasing your conversions can help your business. For example, you can get more customer insights and learn more about how to optimize the user experience, and get more feedback on your products and services and learn how to optimize them more. So is that an angle you take sometimes Not just talking about increased revenue, but also increased data for businesses?

Speaker 3: 6:02

Yeah, they work together. It's impossible to separate them.

Speaker 2: 6:05

Yeah, exactly Exactly. It's impossible to separate them. Yeah, exactly Exactly. The better you understand your customers, the more you can increase your conversion rate, the easier it is to increase your conversion rate. And in addition to this data well, I guess this is another form of data, but things like heat maps and session recordings can sort of like an advanced way to analyze user behavior and increase conversion rates. I think it's important. When you're trying to convince someone, or helping someone convince their boss, to invest in CRO, you know you need to help them understand the process, right. So how would you try to help them, I guess, understand the data that you're showing them that shows CRO is really effective?

Speaker 3: 6:50

Let's start with the simplest one and then, once and then, we can get to some of them that could add to the claim. First of all, of course, if you're not generating enough leads for me, this is the number one data that you have to bring to your boss, or even to yourself. If you're not generating as many leads as you need to meet your goals and you don't change anything, why would you expect something to change in the near future? Or let's say that you might even be generating all the leads that you need, but they're simply too expensive and they're not even profitable. So your business is not even profitable anymore because you're having to invest too much in Google.

Speaker 3: 7:35

So, again, the one KPI that you have control of and you can change in your campaigns and in your efforts is conversion rate. So how much you will pay for the click on Google and on Meta, linkedin, et cetera. In general, it's an auction, so your competitors will be bidding and it's very difficult, and the ultimate price will be determined by the market. So it's very difficult for you to reduce how much you're paying for the click without downsizing. So the part that you can actually control is not the market, it's what you have inside your business, and the first step is your website, for example, you're wondering, does my forum have too many fields?

Speaker 2: 8:20

And you're looking at like a heat map and it shows that people you know complete the first four fields of the form but not the last several fields. So you just make the form shorter. It's the sort of a lot of this data. As long as you can keep it organized, know exactly what insights you're looking for, you just have to take a few simple actions and it'll drastically increase your CRO. That's it. We've talked about how it's important to help people and whatever managers understand CROs, they understand how important it is. I know another big thing when you're talking about CRO, trying to push CRO project is CRO project is especially the high level managers. I'll come back to okay, what does this mean for the bottom line of my business? How does this relate to my business goals like revenue, higher customer satisfaction, reduced churn? So is that like an angle you take when trying to sell a CRO related service?

Speaker 3: 9:17

For sure. So, yes, that's certainly the point. We are generating authority. People when they see our website, they think, well, I could say that there's a serious company here. This is a serious company and this will help in other areas of the business. As you mentioned, people will start to see you in a different way, even your own customers. We have a lot of statistics that show that. Your clients they go to Google. Even those that you think are the most loyal clients they go to Google, they look at competitors and then they compare it against your website. So having a website that is always increasing the authority, increasing how much they trust on you, increasing the connection that they have with you, is super important, definitely so yeah, I mean there are a lot of business objectives that CRO can help with, not just increasing revenue, but like increasing brand awareness, like you were saying.

Speaker 2: 10:13

So sometimes the hesitation that businesses will have is, if they want to spend on a CRO project, they have to reallocate some of their marketing budget from something else. So how would you overcome that objection?

Speaker 3: 10:26

Yeah, that's the lumberjacks paradox again, right? So, oh, should I waste time sharpening my axe when I could be cutting wood? If your axe is super sharp, the easy answer is no, but that's really rare. Even the giant companies as Amazon, Google, facebook, all of those, they spend all of the secondary advantages and benefits that we just talked about, but ultimately, you are reducing the amount of budget required to generate the same result.

Speaker 2: 11:10

Yeah. So a lot of people say you know, CRO is too expensive, I'd have to take money away from my marketing budget. I have to take money away from my marketing budget but, as you were saying, unless your conversion rate is totally optimized, unless your axe is very sharp, it's more than worth it to reallocate those resources. I know another common objection is that people are like well, I'd have to make some changes to my website and it's doing okay now and I'm worried that it would totally stink and I would get no leads at all if I made those changes. So how would you handle that objection?

Speaker 3: 11:44

Yeah, there's a possibility. This is how it works, right, so it's also a risk to stay how it is. So not optimizing is also a risk, see, since most of the paid channels are in auction, so your competitors are bidding for the same customers. There's a limited amount of customers. Most of the times, the pond or the lake is bigger than people imagine, but it's still finished, right, so there's a limited amount of people that are interested in your solution at this moment. If you consider that, if you can generate business, let's say that you have a competitor whose business, whose average ticket, is similar to yours. So let's say that every client can generate $10,000 in business on average. It's just a number, you and your competitor but they can generate leads at 20% of the price that you can generate. So you're basically spending four times more on media than they can generate because they have a high performance landing page online. This means that they can be way more aggressive on their bidding than Because they know that whenever a client lands on their website, they have four times more chance of becoming a business opportunity. So, basically, you're going to be driven out of the arena. You won't be able to generate traffic in a profitable way, in the long term, you're basically killing yourself. So there's also a risk. It's important to understand that there's more than a risk. There's a certainty that if you don't invest in CRO, eventually your leads will become too expensive for you to compete with your competitors, direct or indirect competitors. So this is the first point. Second point we don't have to measure the deepness of the lake with your two legs. It is possible for you to put just a stick there and see how deep it is before you jump in. How does it work? It is totally possible for you to create a landing page alternative to your current homepage or wherever you're sending your traffic, and do an A-B test. If you have an honest agency running the campaigns, they will have a scientific approach to it. What's the scientific approach? They are not rooting or cheering for any of the results. They have a scientific stance to it. And if your current website is performing better, great. We've learned it. In two or three weeks, we already have enough data to make the changes. Three weeks we already have enough data to make the changes. We will be able to pinpoint what exactly people prefer in their current landing page and then we will come with another version of it.

Speaker 3: 14:24

The biggest problem with CRO is that people think it as a one-off project. Optimizing your landing page is an ongoing process. If you're in doubt if this is a good strategy, just look at every single big company. This is a major part of their strategy. For a reason they don't like wasting money. They do it, they invest a lot on it because they know that they will get their money back many times. Every dollar that they put in CRO comes back many times. This is the reason why they invest so heavily and this is the reason why the smaller businesses should simply look at the bigger ones and mimic their strategy. So those I would say that are the biggest points. So you don't have to get rid of what you currently have. You can compare both of them and only switch on the new strategy if you can see that the new strategy is better than whatever you have you can see that the new strategy is better than whatever you have Exactly.

Speaker 2: 15:21

So when you do that A-B testing process, there's not really any risk of messing up your current site, because it really is better than the page you're testing now. You can just stay with the current site and it's like you were saying. I mean, user behavior is always changing. Your competitors are always getting better and better, so it's a certainty that if you don't work on increasing your conversion rate, you'll fall well behind and it'll damage your business.

Speaker 3: 15:43

Yeah, customer behavior is changing. So let's say that you sell software, you're a software company and last year one competitor brought a new feature to your or maybe it's a feature that you already have, but it wasn't important before and all of a sudden, because of some change in the market, some change in the compliance or rules or laws or anything, suddenly this specific feature became more important than the other ones. Whatever study and whatever test you have from last year is no longer valid this year. This is why you need to continue doing the test. It's an ongoing process.

Speaker 2: 16:23

Yeah, it changes consumer behavior, especially these days. It seems like it's changing more quickly than ever, so you've got to stay on top of that.

Speaker 3: 16:31

Yeah, not just technology, all segments, All segments are changing rapidly. Not just I mentioned software, but it's true for health, it's true for education, Every single segment that we work on. We can see a very rapid change in the recent years.

Speaker 2: 16:46

So can you provide like a quick example of a client that JA Marketing has worked with that has improved their conversion rate and really, you know, increased the success of their business?

Speaker 3: 16:56

Sure, yeah Well, I mentioned, mentioned software. Let's stick to this one. I have a major player in the we call it identity verification segment, which basically provides ways to verify that people are real. So whenever you download an app, for example, and they need to know that you are actually you, then you have to take a selfie or something like that. You have to to use one of these softwares. One of these software providers I cannot open the specific name of the client, but they are on NASDAQ. Okay, they are a public company, a giant in their areas, and they already had a very.

Speaker 3: 17:33

Their website could explain very well what they did, what they do. They could provide a lot of information, but it was not focused on persuasion. So this is a very common mistake. People think that the better they explain stuff, the higher the conversion rate, and that's not necessarily true. So what we can?

Speaker 3: 17:54

There are two points on that. First of all, a statement that I like, and I know it's true Information you give. It will be measured by the average of the quality of the information you give to the user and not the sum of it. So it's better to just give the most valuable information and the most persuasive information than to give a lot of information, because the importance how much the information that you're giving to the client is measured by its average and not its amount right. So sometimes a single headline can be more effective than a whole page if it's the right headline, and this was the opposite of what you're doing. So they have a product with a lot of nuance, a lot of information required and they would explain in a very detailed way to the client, but not in a persuasive way.

Speaker 3: 18:43

We got the data, we analyzed, we ran some initial tests and then a full A-B test comparing their previous page with a new campaign, and it's now four times higher rate in a very small we're talking about the same fiscal year we were able to quite triple the amount of leads that they were generating with the same budget. Okay, so, talking about it's not a company that was starting yesterday, they already had a profitable campaign, but still, as we mentioned in the beginning, the average in general is very low, way below of what it could be, because people still don't have. It's incredible, but a lot of companies still don't have the mindset of ongoing testing, ongoing improvement, ongoing optimization, and with these changes we had an instant growth and now it's not growing as rapidly as it was before, but it's still constant. We can constantly improve, every single month, the growth of this client and they're super happy. They're meeting all of their expectations. Their stocks went up last year, so we're in a very good place with them.

Speaker 3: 19:55

But this is one example of how to apply the process. It's basically how it works. With every single new client that comes to us and I can probably say that there wasn't a single client that we couldn't improve the conversion rate in the span of at most six months, which can look like too much. Most of them will have results way before. But even if it takes four or five, six months at most, compared to the years that you spent without optimizing and simply wasting money on media, without sharpening your X, without optimizing your landing page for conversion, absolutely.

Speaker 2: 20:38

Yeah, it goes to show how not just how important CRO is, but how quickly you know experts can improve CRO even if you already have a decent campaign. So say, the hypothetical person's boss, or maybe just the person themselves, has agreed that they should invest in CRO, but they're like oh well, I'll do it at some point. So how would you create a sense of urgency to try and get them to make that investment as soon as possible?

Speaker 3: 21:05

Yeah, there's no urgency if spending money is okay, if wasting money and donating money to Google or whatever paid media you have is not urgent. It's also not urgent if you are not being pressured for results, but otherwise, the sooner you. So let's remember that it is a process you have a very high probability of getting considerable improvement in the first months, even in the first month, if you haven't been doing it for a while. So the sooner you start, the sooner you start getting the benefits, and the way I like to look at it is that the money doesn't have to come from a new budget. I even like to say well, you spent hypothetical numbers that say that you spent $10,000 on media on Google. Get a percentage of that over time and invest in CRO. Let's think of an average improvement of your conversion rate is going from 2% to 4%. Only only this improvement.

Speaker 3: 22:00

If you're investing $10,000, all of a sudden you have $5,000 free because you need only half of the budgets to achieve the same results.

Speaker 3: 22:11

So you don't have to pay for the CRO. Google is paying for the CRO. Meta, linkedin, whatever media you're using is paying for the CRO because you won't have to spend as much money on the media to get the same results. And then, after a while, if you say, well, now that we're generating cheaper leads, we also want to increase the quantity Great, then you can have twice as many leads, twice as many opportunities. But in the short term, if budget is a problem, you can simply use it from the media budget that you have, because CRO will certainly reduce how much you have to spend on media. The amount will depend from client to client, from scenario to scenario, but there's no way that eventually, the investments that you're doing CRO won't be paid by the reduction you can do on your media budget. So get a share of what you are wasting on media and invest on an actual plan for you to permanently be able to invest less and get more results, or invest the same and get even more results.

Speaker 2: 23:14

Yeah, exactly. And, like you were saying, you need to invest this budget in an actual plan, because trying to understand everything that goes into CRO and make every improvement that'll help your CRO rate you know yourself is almost impossible. That's why it's worth going to the experts, like SOJ Marketing, where we have a scientifically proven system to, you know, improve CRO rates that's worked for many clients in every major industry. So to get started with that, I would encourage listeners to sign up for a $995 comprehensive digital marketing audit. We'll review your whole marketing setup, we'll see where your marketing is letting you down, reducing your conversion rates, and we'll provide some recommendations for how you can improve your conversion rates. So with that, I think that concludes the podcast. Thanks for coming on today, rafa.

Speaker 3: 24:15

Thanks Alex, thanks everybody.