Combatting Competition With Better Conversion Rates

Combatting Competition With Better Conversion Rates

In the world of paid search marketing, increasing click costs year after year is a common trend in many verticals. The behemoths with the biggest media budgets continually spend whatever they need to fend off competitors and maintain their dominant impression share metrics. Other competitors continually fight to maintain their presence with refined targeting and robust optimization throughout their accounts. However, even with the highest keyword quality scores, the best click-through rates on record, and the most robust automated bidding strategies, such optimization may not be enough to counteract the realities of increased costs for competing in a given industry.

For many advertisers, this is a grueling reality. As efficient as paid search is at driving leads or transactions to low-funnel users, increases in click costs can be unsustainable. Many risk being slowly squeezed out of their market without another tactic outside of their paid search account to help them counteract these click costs.

If you feel like you’re in the same position as the advertisers I mentioned above, you need another tactic that increases your conversion rates and, thereby, increases your business’s bottom line. Because, even with increased click costs and less click volume, you can potentially be more successful at acquiring revenue and growing your business if you’re able to increase conversions from your paid search campaigns with higher conversion rates.

So, if you’re not able to adjust anything within your account itself to do that, how do you accomplish this? Enter: conversion rate optimization (CRO).

Conversion Rate Optimization (CRO)

Conversion rate optimization (CRO) allows you to find ways on-site to improve user experience and generate more conversions through consistent testing on your landing pages. This process gives you the ability to methodically make changes outside of your paid search platform to steadily increase your conversion rates. With better conversion rates, you’re able to counteract intensified competition and increased click costs in paid search.

CRO starts out by collecting data on current user behavior on your landing pages and in your conversion funnel to find areas or components that perform sub-optimally. For example, you can analyze user activity data through a heat map or a click map. You could also conduct interviews in a focus group or automate user surveys. The point is that you want to start by understanding what specific things your potential customers see as obstacles in their path to conversion and where they experience unnecessary friction.

You then hypothesize why something, in particular, is not working as well as it should and design an alternative to test that hypothesis. This is called an A/B test. You then deploy that test through a CRO tool (e.g., Google Optimize) and split the incoming traffic between your existing version (A) and your alternative version (B). Over time, you’ll witness the difference (or lack thereof) in conversion rates between these two variations. Once you reach statistical significance on a given test, you keep the winning version with the better conversion rate and make that permanent. Then, you analyze more data to develop your next test in an effort to increase conversion rates further; they’ll improve over time even if optimization and targeting in your paid search account remain relatively static.

A Brief Proof of Concept

We have a B2C lead-focused client at Portent we’ve worked with for several years now. One of our primary initiatives heading into the 2nd quarter of last year was to develop and execute a full-scale CRO strategic plan. Over the course of the year, we collected on-site user data through a variety of tools, conducted user surveys, analyzed the trends we saw, developed numerous A/B tests, and continued optimizing both our landing page and our conversion funnel experience. After 12 months, here is what we saw:

Form Fill Conversion Rates

  • 2019 Conversion Rate: 30.1%
  • 2020 Conversion Rate: 32.2%
  • CVR Improvement: +2.1 points (+7%)

With these improvements on site, we were able to bring down our average cost per lead from our paid search campaigns even as click costs increased 5% year over year.

Fight Back Against Increased Costs and Win

Robust A/B testing (and multivariate testing, if you want to get fancy) on your landing pages and conversion funnel can and likely will lead to actionable insights that then lead to permanent changes that directly improve your conversion rates. That’s the essence of conversion rate optimization in a nutshell, and it can help you counteract high click costs in paid search. We know because we’ve done it, and it works.

Ultimately, this all leads to more revenue and more profit. When you Increase your conversion rates, you generate more leads, more transactions, and more business. Being able to increase your revenue intake can then lead to increased marketing budgets, which allow you to increase your paid search volume against competitors who were previously crowding you out, thus easing the impact of higher click costs further. You may even be able to invest more in high-funnel or brand awareness marketing efforts as well to really grow your visibility.

So, if you haven’t considered CRO yet to help your paid search account, now is the time!

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