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Guides & Advice

Calculating ROI from CRO: The Multiplier Effect

By Chris Green / April 6th 2017

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When you look at the amount of traffic going to your website, and the current level of conversion it has, you might think you need to spend more on your online marketing to increase those numbers.

While the amount of traffic is important, it’s the conversion that needs to increase to improve the effectiveness of your website. This is where the multiplier effect can come into play. So what is it and how does it benefit your business?

What is the multiplier effect?

Essentially, the multiplier effect is a term that we’ve applied to the benefit that conversion rate optimisation (CRO) can have on your marketing spend.

Consider your other marketing elements: PPC, SEO, social media and direct marketing, for example. Increasing the spend on each of those only improves their individual effectiveness.

Increasing your CRO spend, or investing in CRO if you haven’t before, can help you to see improvements across all of these areas, by increasing the conversion rate of traffic directed to your site. This means that you can make your existing marketing spend more effective without increasing the amount you invest in each area.

CRO improves your site, which creates a permanent improvement in your marketing effectiveness and provides a long-lasting impact.

Eventually, the law of diminishing returns does come into effect, meaning that over time the  effectiveness of your CRO investment will reach a limit, which is when you can begin to think about increasing spend across other areas. That spend will be more effective than it would have previously been, due to the efforts of CRO. This, thereby, multiplies the effectiveness of your online marketing.

Illustration of a man stood in a machine which will multiply him by 100

How it works

Marketing is often a case of using content to drive traffic to your website through a number of channels, organically. This traffic will convert to some degree. However, you might find you generate a lot of traffic, but only have a very small conversion rate.

For example, you might have 10,000 visitors to your site, but only 100 of them convert. This gives you a conversion rate of 1%.

You might think increasing your marketing spend from the outset will increase the number of conversions.

So, by doubling your spend across PPC and social you increase your traffic, bringing it up to 14,000 visitors, however your conversion rate will still be just 1%. Hence only 140 visitors will convert, which doesn’t really justify the increased spend. This is a constant spend that you will need to maintain to drive that traffic to your site.

CRO is capable of raising the conversion rate of your site permanently, by optimising the user experience and improving the chances of a conversion being made.

This then increases your number of conversions. Raising the number of conversions against 14,000 visitors from 140 to 300, for example, brings your conversion rate up to 2% on an ongoing basis. This means that by optimising your site effectively you can make your existing marketing spend deliver more effective results and permanently boost the effectiveness of any future increases in spend.

How does it benefit a business?

The multiplier effect can be of massive benefit to a business because it makes sure its marketing is delivering on its potential.

If CRO is something your business isn’t investing in, and you are considering upping your marketing spend across the board, your business could use CRO almost as a cost-saving exercise – so you’re paying a smaller overall amount to make the most of your existing marketing budget.

We’d love to explore how our conversion optimisation strategies could deliver results for your business. To arrange a brief telephone conversation with one of our team call 0844 755 0350 or get in touch to find out more.