5 Conversion Rate Optimization Challenges For Enterprises To Solve

Although the interest in conversion rate optimization is increasing over time, organizations are unable to adopt it fully. To ensure its smooth adoption and implementation, certain challenges and misconceptions need to be addressed.

Download Free: Conversion Rate Optimization Guide

In this post, we will talk about 5 such conversion optimization challenges that enterprises face and ways to overcome them.

Challenge 1. Politics and People—A Cultural Challenge

An organization’s culture is made of 2 core components—people (skill and mindset) and their interpersonal relationships (power to influence and politics). Creating a conversion optimization culture becomes challenging when either people lack the understanding and skill or when influential people in the organization want their opinions to be valued more than what data and facts indicate.

Political

Brian Massey, Founder, of Conversion Sciences shares his view on the political challenge as follows:

Brian Massey

Why has Donald Trump’s top-down, opinion-driven leadership style been accepted by the white-collar working public in the US? Because enterprise businesses have trained us that this is how leadership works. We have a name for this leadership style: “HiPPO,” or Highest Paid Person’s Opinion. Joel Harvey calls it Helicopter Management. This is the management style of charismatic or autocratic leaders who drive action in their organizations by helicoptering in, expressing a lightly informed opinion, and enforcing their opinion in one of the following two ways:

James Spittal, Chief Executive Officer, of Web Marketing ROI also talks about the HiPPO effect and the political challenge that obstructs a culture of conversion rate optimization.

Keith Hagen, VP & Director of Conversion Services at Inflow views politics as an obstacle in the implementation of quality insights for any CRO program.

People

James Spittal, Chief Executive Officer, Web Marketing ROI attributes the lack of skill—technical or development—with regard to why people in an organization pose a challenge to creating a culture of CRO.

James Spittal
This challenge simply occurs because people in an enterprise not having the knowledge, talent, or skills. Often, we see people with a graphic design, pure web design, pure analytics, or pure UX background become the “de facto” CRO team. But they struggle because it’s unlikely that they have the technical skills or development skills to be able to implement advanced A/B test ideas (major layout changes, modals, segmentation, changing cart flows, doing tests on pricing, etc.). Often, they also struggle to get resources internally or externally and build a strong business case to increase the CRO budget.

Johann Van Tonder, COO, of AWA Digital, shares similar views regarding people and the lack of talent to implement conversion optimization.

Solution

The first step in creating a culture of data-driven conversion optimization in any organization is to educate the people about its benefits. Any enterprise planning to implement such a shift—moving from random A/B testing to scientific conversion optimization—must first understand the “why” behind it.

Any cultural change requires the complete support of the top management. That’s why it is all the more important to convince it about conversion optimization. Here’s how you can use data to convince your top management about why they need conversion optimization:

• Highlight improved user experience as a double win.
• Present a competitive analysis.
• Stress the gaps in your current approach.
• Show the money.
• Show the data.

Challenge 2. No Defined Structure that Supports CRO

It’s a huge challenge for enterprises to put together a structure that supports conversion optimization effectively. There are a number of questions that arise when addressing this challenge. Would it be beneficial to hire a dedicated conversion optimization team, or would it mean only additional expenditure? Who is responsible for conversion optimization?

With regard to this challenge, some interesting observations were listed in ConversionXL’s report on the State of Conversion Optimization in 2016. One of the findings quoted in the report mentions, “…only 29% of people said that there’s a single dedicated person who does optimization. 30% more said there’s a team in charge of optimization, but 41% of respondents had no one, in particular, that was accountable for optimization efforts.”

Some companies have internal conversion optimization teams that comprise an analyst, designers, marketers, and project managers. However, should these people invest all of their time in conversion optimization? One way of dealing with this is to have all team members allocate time between core job functions and conversion optimization.

Another challenge related to the lack of a structured process for conversion optimization, as explained by Tim Ash, CEO of SiteTuners, and a digital marketing keynote speaker, is the isolation of the CRO team from the rest of the teams.

Solution

Lay down a clear process for conversion optimization that needs to be followed by everyone in the organization. Create a dashboard or platform where all the conversion optimization activities are planned, updated, and reported. Share this platform with everyone in the organization. Encourage a culture where everyone contributes to conversion optimization. However, make decisions based only on data. For example, while deciding what to test and optimize, follow a scientific hypotheses prioritization framework. The benefit—though everyone gets to share their observations and hypotheses—is that only the most relevant of those are tested.

Download Free: Conversion Rate Optimization Guide

Challenge 3. Inefficient Methodology for Implementing Conversion Optimization

Paul Rouke, Founder and CEO, of PRWD points out that lack of user research is one problem in the current conversion optimization methodology followed by most enterprises.

As shown below, the interest in A/B testing is far more widespread than in conversion optimization.

It is important to understand that testing random ideas based on opinions is not a smart way of testing. You may get a winning variation even by testing “ideas,” but this will not help solve the real pain points that users face. The challenge, therefore, is to eliminate guesswork; and the solution is to focus on data instead.

Here’s what Brian Massey has to say regarding eliminating guesswork and relying on a behavioral data-based methodology.

Brian Massey
Enterprises are missing out on an area, that is, following Moore’s Law in terms of increasing capability and decreasing costs. Behavioral data collection is dropping precipitously in price, and new capabilities are coming online weekly. Just as Microsoft didn’t realize that the mobile phone market would follow Moore’s Law, enterprises run the risk of missing the growth in Behavioral Science, a discipline designed to eliminate guessing from business strategy and tactics.

Mathilde Boyer, Head of CXO, House of Kaizen, and Peter Figueredo, Founding Partner, House of Kaizen also talk about what is inefficient about the current conversion optimization methodology, as followed by some enterprises.

Solution

Data-driven optimization is focused on identifying friction, understanding the why behind user behavior, and testing hypotheses based on that data/information. Here’s what a formalized conversion optimization methodology would comprise:

1. Researching the existing data
2. Finding gaps in the conversion funnel
3. Planning and developing testable hypotheses
4. Creating test variations and executing those tests
5. Analyzing the tests and using the analysis in subsequent tests

Andre Morys, CEO of Web Arts,  in one of his interviews, talks about what’s wrong with the methodology. According to him, 80–90% of big companies do not aim for bigger goals, which could change the growth rate. This is another methodology-related drawback, as the goals being set do not take profitability into account. Andre’s interview answers many other questions related to business growth.

Challenge 4. Right Tool for Meeting Business Goals

The decision-makers in an organization have a variety of tools to choose from for meeting their business goals.  For example, when deciding on an A/B testing tool, they have to make a choice between a:

• Frequentist-based statistical engine
• Bayesian statistical engine

Moreover, there are multiple tools that help accomplish specific objectives. Enterprises might use hotjar for heatmap reports, a/b testing from VWO, and some other tool for on-page surveys. Reporting becomes a pain when instead of using one connected platform, enterprises use multiple tools to execute their conversion optimization program. If enterprises instead switch to a single connected platform, they can save a lot of time and resources.

Another problem with not using a single tool for testing and optimization is that it becomes difficult to explain instances of success and failure to the top management. This could be confusing for managers who are not in touch with the day-to-day implementation of the conversion optimization program.

Solution

For selecting the correct tool, decision-makers need to weigh the pros and cons of their actions. They need to evaluate the tool based on how effectively and efficiently it can solve their specific business problems. For enterprises looking to invest in a tool for business growth, here’s a post on what decision-makers need to know before investing in CRO or A/B testing software.

Challenge 5. Insufficient and Incorrect Budget Allocation

Back in 2013, most companies spent less than 5% on conversion optimization from their total marketing budget.

Moving on to 2014, a report from Adobe says that top-converting companies spend more than 5% of their budgets on optimization. Per the conversion optimization report 2016 by ConversionXL, businesses have increased their spending on optimization. The problem, however, lies in correct allocation.

Paul Rouke talks about inefficient budget allocation as follows:
Budgets for conversion optimization within enterprises are continuing to increase, but typically in the wrong direction. Enterprises focus far too much of their marketing investment in enterprise technology. As a result, there’s little investment in people and their skills to actually harness the technology—whether building their in-house team or harnessing specialist agencies.

Solution

Before deciding the amount that enterprises should spend on conversion optimization, they should think about the return on investment from CRO. Organizations need to budget for the conversion optimization tool while analyzing their goals and actual gains. To read more on how to budget for conversion optimization, read this post by Formstack.

Summary

Although the interest in conversion optimization is growing, due to certain challenges, it is not being adopted fully by enterprises. Some of the drawbacks that this post talks about are related to organizational culture, structure, methods and processes, tools for conversion optimization, and budget. These challenges are either related to the adoption of conversion optimization or its smooth implementation. Solving these can help enterprises deploy conversion optimization efficiently and effectively to achieve growth and success.

Hope you found this post insightful. We’d love to hear your thoughts on the challenges that enterprises face when implementing conversion optimization. Send in your feedback and views to marketing@vwo.com