How Conversion Rate Optimization (CRO) and AB Testing Can Help Your Business

Conversions

High conversion rates are vital in the realm of digital marketing as it helps measure the effectiveness of a website or app. Considering that a high conversion rate is one of the best indicators to a platform's effectiveness in gaining user attention, there are some tools that can be used to help optimize it. This week we will be diving into AB Testing and Conversion Rate Optimization (CRO) and examine how these tools help digital marketers excel.

What is AB Testing?

At its most basic, AB Testing (also referred to as bucket testing or split testing) is simply the act of taking two versions of something and comparing them to see which one is better. In the context of digital marketing it can be further boiled down to comparing two different versions of a given app or website and seeing which one is more effective. Usually, a website that has been unaltered (control group) is compared to a similar version of the same website but has been changed in one way or another (challenger). Here is a graphic that helps demonstrate AB Testing:

What are the steps for AB Testing?

In total, there are six steps to consider when conducting an AB test:

1. Determine the desired variable or metric that you want to test: AB testing is most effective when testing only one variable, so determine the website or app that you want to focus on. This can also be referred to as an independent variable or the control group.
2. Identify your goal: Determining the primary metric that you want to focus on prior to running the test will help guide the rest of the test. This metric or value acts as your dependent variable or challenger group, in which it changes when the independent variable is manipulated.
3. Split the respondents: Divide the users/respondents into two separate but equal sized groups. The variations will be assigned to users at random when they visit the site(s).
4. Run the AB Test: Comparing the results of the control and challenger group side by side. In this step it is also crucial to specify the duration of the test.
5. Retrieve the Compile the Data: Only after the test has been ran for its full duration should any data collected be retrieved.
6. Interpret the Results: Upon analyzing the data, determine which of the groups produced better results.

What is CRO and why is it important?

As eluded to earlier in this blog post, conversion rates are crucial in digital marketing. Conversion Rate Optimization is focused on doing its namesake: maximizing the amount of desired actions taken by users on a website. Or it is simply, "the practice of increasing the percentage of users who perform a desired action on a website" (Hotjar.com).

The parent equation to calculate conversion rate is as follows:

In the context of this equation, conversions is a synonym for desired actions taken on a website.

While calculating the conversion rate for a given website is straightforward it is also important to remember that there are many variables at play that can affect how conversion rates are calculated. Depending on what you are trying to measure (click-through rate, ad clicks, subscriptions etc.) will affect the value of the conversion rate.

While this equation provides a solid numeric basis for conversions, the best way for CRO is subjective as there are many factors at play and each website requires different actions to be taken. By orienting your conversion goals to help users in their journey and lives will show a more empathetic approach and can prove to be more effective in the long run.

AB Testing and CRO

While AB Testing and CRO are two separate things... they also share some similarities. AB Testing and CRO are both based on the concept of analyzing what parts of a website or app that are underperforming. However, a common goal does not equate to a common practice. AB Testing is a tool that is used to aid in CRO. And CRO as a is a process where AB testing is more grounded in statistics. Both CRO and AB Testing are focused on increasing the overall experience for the user which helps your business in the long run.

References

• https://www.hotjar.com/conversion-rate-optimization/
• Investing in CRO or A/B Testing Software? You (Decision Maker) Must Know This.
• https://towardsdatascience.com/how-to-conduct-a-b-testing-3076074a8458
• https://blog.hubspot.com/marketing/how-to-do-a-b-testing?hubs_content=blog.hubspot.com%2Fmarketing%2Fhow-to-do-a-b-testing&hubs_content-cta=hsg-chapters__link#how-to-conduct-ab-testing
• https://www.optimizely.com/optimization-glossary/ab-testing/
• https://hbr.org/2017/06/a-refresher-on-ab-testing
• https://blog.hubspot.com/marketing/conversion-rate-optimization-guide

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