Conversion Rate Optimization (CRO) services are just one of many options for a website owner to choose from when it comes to growing their business online, such as:
- Pay Per Click Advertising
- Search Engine Marketing (SEM)
- Content Marketing
- social media
Now the obvious question is: Which internet marketing service will generate the most sales for the investment? Unfortunately, you’ll probably need a team of rocket scientists to calculate the ROI of an investment in SEM, content marketing, or social media. And while CRO services offer a much higher ROI than these three options (yes, you can calculate ROI to a very reliable degree for all three services), for now we’ll focus on PPC and return to the other options a bit more. late.
But for now, let’s see that there is a website with the following main statistics:
Monthly Income: $15,000
Average conversion rate: 2%
Average Customer Sale: $150
So, it’s a very respectable site but no one is getting rich. In fact, the marketing budget is very tight and the website owner only has $5,000 to invest to grow the business online next year. What is a better investment: PPC or CRO services?
Invest $5,000 with PPC
Average CPC: $2
New traffic: 2500 Visitors
Total new sales: fifty
Total new income: $7500
Gross margin: $2500
Well, let’s hope that the owner of this website is selling an information product or service. Because with $5,000 invested in PPC advertising, there simply isn’t much left over for taxes, overhead, and especially the costs associated with physical products. Now, let’s see what happens if the website owner invests that same money in conversion rate optimization:
Invest $5,000 in CRO services
Increase conversion rate by 30%
New Conversion Rate: 2.6%
New Total Monthly Income: $4500
Gross margin: -$500
Now, before you think that investing in CRO experts is a losing proposition, you should consider one very important fact:
The higher conversions produced by CRO experts will continue to drive higher online sales for years after the job is complete. That means you won’t generate $4,500 in additional revenue for just one month, but for the foreseeable future and possibly years after the CRO experts have wrapped up their work. So, in light of this fact, that means the $5,000 investment in CRO services will generate:
New Total Annual Revenue: $54,000 ($4,500 X 12)
Gross margin: $49,000 ($54,000 – $5,000 initial investment)
As you can see, it’s not even a contest. And the projected 30% improvement in overall conversion rate is very modest, with most projects averaging a 50% increase. But even with these modest projections, the ROI of CRO services absolutely devastates the ROI produced by PPC advertising. But what about SEO, social media, or content marketing?
Well, compared to these competing internet marketing options, CRO services produce a much higher ROI due to three factors:
- CRO services generate higher sales long after SEO, SMM or content marketing
- CRO services do not require constant investment to keep generating new sales online
- CRO services do not increase marketing costs
While the difference in ROI may not be as big as it is with PPC, the truth is that SEO, SMM, and content marketing are not as profitable to invest as conversion rate optimization.
However, every website needs to increase its traffic in order to ultimately grow, so no one is saying that SEO, SMM and content marketing are not necessary. In fact, they are vital to varying degrees to all successful websites.
But if the question is which internet marketing service will ultimately generate the best bang for your buck, CRO services win hands down. And, if you were to invest in conversion services, the increased conversion rate would make all your subsequent investments in SEO, SMM, content marketing, or even PPC even more profitable.
In fact, take our example and imagine that the ppc campaign generated a conversion rate of 2.6% instead of the referral 2%. That means that instead of generating $7,500 in total new sales, you would have generated $9,750 in new revenue.
And if you haven’t heard of conversion rate optimization, don’t worry, the competition has already done it or will soon. Massive corporate giants like Apple and Google are already investing in CRO services because the ROI is simply too great to ignore.
