Create A Conversion Optimization Budget In Only 5 Steps

Conversion rate optimization can be a complex area and I will help you get your C-suite onboard so you can improve your bottom line and everyday work-life. Sometimes the answer is right in front of us and this problem and situation is fascinating but also understandable. Older business know-how and C-suites aren’t in tune with internet marketing and conversion rate optimization so how can you be a cameleophant and change color and language to succeed with your conversion rate optimization budget. You could think that everyone in 2019 knows how important conversion rate optimization (CRO) is but do you have a CRO budget with your C-suite onboard?

Conversion optimization is essential of being or becoming a data-driven company!

Conversion Optimization is a revenue driver

I want to explore and solve this phenomenon because CRO is a revenue driver, and it can have a positive impact on your business at every stage in the lead funnel, full-funnel or customer journey.

Conversion optimization campaigns require an investment of time and money

A good CRO campaign requires investment of time – and money. If you can find people in your organization or have people with titels like VP of  Sales, Growth Manager, CMO or CFO you know that you can always talk the same “language”, the language of conversion rate optimization is all about money – a language they should speak very well. You know CRO can increase your bottom line but the challenge is to get your C-suite on the same page and showing them that the end result is worth the resources that you need to reach the goal. How can these different mindsets intersect and align in a CRO budget – use these necessary first steps to improve your activities towards a better bottom line:

Conversion optimization is dangerous if you don’t know the value of the lead or customer

Calculate your lead value and you can avoid over- or under-spending on CRO. When you find out what your lead value is (you can also start with your yearly NorthStar metric) maybe you see that an average lead is worth $30, then you can optimize a $45-per-click ad campaign and stay away from a negative ROI.

The lead value will help you with purchasing decisions (this can be a big problem these days with the fast development of the MarTech landscape) because the lead value will help you to decide if a software is worth the investment or if a new lead funnel building platform or A/B testing tool costs less than the amount of valuable leads it can generate. You can say that CRO increases your average sales value, which in turn will increase your average lead value.

Are you doing heavy investments in Google Ads, account-based marketing and paid social media?

Then you must calculate the cost of a lead because as a marketer you want to optimize for revenue and not only for conversions. If your average lead value is $30, and you’re generating 500 new leads a month, you know you can safely invest $15,000 in CRO infrastructure, tools, and talent. When your lead value increases, so can your CRO budget.

I would recommend (if you want to go deeper) to calculate the lead value for each important traffic source and you’ll know what certain channel like Facebook, Instagram, LinkedIn or Google Ads give you the most revenue potential if you use UTM and tracking correctly.

Set Goals And Big Goals Need Big Budgets

When you set your conversion goals remember that they should move the needle with profitable returns for your company. Document and use your current conversion state and your must have conversion state as benchmarks. You could discover that a decrease in conversion rates can lead to an increase in sales – what?

Example, you try to test out something differently on a pay-per-click landing page that drives traffic that is optimized for a target group and we increase the pricing or lead value on a specific action a visitors does from $80 to $145.

For every 1000 people that convert in this example, you would make $145,000 instead of $80,000. So even if your conversion rate drops from 5% to 3%, you get a higher lead value with a pricing structure that is optimized to appeal to your target. You could then start generating an idea backlog for more tests that is highly targeted optimizations to increase the new conversion rate – do you follow where this is going?

Get Your Tools And Resources Aligned

Are you using third party tools for email opt-ins – then integrate it with your Google Analytics and start A/B testing form fields.

Integrate Google Optimize, Facebook Pixel Events and Google Ads with Google Analytics, Google Tag Manager and you are good to go with testing without additional costs.

If you have in-house copywriters, compliance officers, customer success managers or customer support – get them involved in personas, buyer profiles, psychographic profiles and different targets you are trying to optimize.

Scope out the estimated use of tools (why, how, what, pricing, users etc) and team members already at your disposal and maximize and show this to the C-suite.

Experiment With Your Experiments

When your C-suite is onboard you should engage in a way to be more structured with your entrepreneurship internally. All that beautiful ideation your team and staff brings to your plan needs a good A/B testing software but don’t pick one at random because there is plenty to choose from. 

Use The NorthStar Software To Document Ideas And Learnings

Document all your ideation, hypothesis, solutions, deploys, analyses and learnings from every test your team executes. This is essential in reaching your growth goals and being an innovative and an attentive company.

Bonus

The most important thing with CRO and rapid experimentation is that the knowledge skills gap is growing in high speed today so always be learning and let the team have and effective learning path to follow with great resources and teachers. This will let them stay on top of experimentation and creating growth aligned with your impact goals and revenue goals.

Let me know if I can help in any way – I wish you good luck in your CRO adventures and let me know about your learnings!

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