CRO - Gain more sales with a single click

What is CRO?

CRO or Conversion Rate Optimisation is the systematic process of improving your onboarding and acquisition/monetisation funnels in order to maximise the number of users paying for your service or offering.

It was originally created for and used by ecommerce businesses, where the main metric was checkouts, and CRO took the form of abandoned cart emails, decreasing traction on the checkout process, and making entering payment details as low effort as possible. One of the greatest achievements of CRO was the invention of 1-click purchase by Amazon in 1999.

But CRO is no longer limited solely to ecommerce. B2B, B2C and SaaS businesses of all kinds also need to consider CRO and aim to improve their conversions across the board.

CRO in SaaS in a nutshell

Imagine you’re spending £20 to get a user to your website, and if you sell them your product, they will spend £200 on it. This means your conversion rate needs to be 10% or above in order for you to have a positive net return on investment. In order to increase your revenue, you can either spend more on acquiring users (spending more of those £20s to get them to your page), or increase the percentage of them that go on and spend money (through CRO–for free).

The SaaS funnel

Since converting a user in a SaaS business usually requires multiple touchpoints and happens through several steps, it is important to follow CRO principles across all of them. Generally, the funnel phases in a SaaS company will be:

• Acquisition
• Activation
• Monetisation (Or revenue)
• Retention
• Upselling
• Referral

CRO can be applied to every step of this funnel, and incremental improvements on each of the steps will add up to massive improvements in revenue. In addition to adjusting your product, Go-to market strategy and sales funnels, CRO is about data-based tweaks to your website and marketing materials that will positively impact the conversion rate. We will cover the first four phases of the funnel in this article.

Acquisition

On the first level, CRO principles need to be applied to your landing page, home page and marketing emails in order to increase acquisition as much as possible.

The general rule of thumb when designing your homepage and landing page is to assume that the user knows nothing about your product, and you have a very short amount of time–given internet users’ short attention spans these days–to show them the value of your product and convince them to spend more time on your website.

The top of your landing page is the section where most users will decide in an instant if they want to learn more about your product or not, so it is very important that:

• The headline and subtitle be concise and clear
• Communicate your value proposition in clear, easy to understand language
• Avoid big words, long sentences or unclear, aspirational statements
• Have a CTA (Call to action–a button) that clearly explains what you want a user to do, and what this means for them (for example, avoid “Learn More”, or “I’m interested”. Use terms such as “Download Now”, “Try Now”, “Get PRODUCT Now”.)
• Using the words “Free”, “Now”, and “You”/”Your” are highly recommended.

While the rest of the homepage isn’t necessarily unimportant, don’t sweat the details too much, as the first box is more or less where users will make their judgement about your product and brand.

Activation

Assuming you have a freemium or free trial, and have allowed your customers to start using your product, the next step towards turning them into paying customers is activation. You need to provide them with useful information on steps they can take to take advantage of your product, such as highlighting the features to them or guiding them to get value out of your offering.

Some things to look out for in CRO in this phase are:

• Sending emails to quickly direct users to the most relevant and valuable features
• Making onboarding as low-effort and simple as possible
• Offering demos and walkthroughs by your team

This is the stage where you need to take a closer look at your product, and optimise  the UI, UX and onboarding journey in order to increase activation and engagement. Use your product analytics suite to analyse the onboarding funnel, identify dropoff and churn points, and create A/B tests to iteratively improve the conversion rate.

Monetisation

This is what everything you do is ultimately about; turning your users into paying customers. Depending on whether you have a freemium model or a free trial, CRO at this stage can vary, but is perhaps one of the most important steps.

Generally, it can be easier to convert users from a freemium to a paid tier if your product and onboarding does a good job of showing them value. But in some cases (such as high value enterprise software), a free trial will be enough to allow businesses to test your product before committing to payment. For most startups, freemium will be a better option as your product is unknown, has little appeal and the onus is on you to prove the value to your prospective customers.

First you should look at your pricing page and experiment with concepts such as the decoy effect, context pricing, anchoring, and putting a 9 at the end of your price.

There are a few really good books you can read to understand more about pricing strategy (and marketing and CRO overall) such as:

• Priceless by William Poundstone
• Thinking fast & Slow by Daniel Kahnemann
• Predictably Irrational by Dan Ariely.

You can also test the order of the different plans, offer special discounts and experiment with various CTA’s (also try making the button bigger).

Retention

The SaaS business model is usually reliant on you retaining your customers for as long as possible. The longer your customers pay you, the higher your revenue from that customer. It is therefore really important to focus on retaining your customers as opposed to bringing in new ones (this will also be more cost-effective).

• Use data to find out what type of customers are most likely to churn
• Send your customers surveys to learn about the features they like, and what could convince them to stay on your platform (a good template is the Product-Market fit survey)
• Reach out to and speak with the customers who decided not to renew their subscription, find out the reason
• Speak to your most loyal customers, ask them why they have stayed with you, what features do they like, and what could be improved
• Experiment with changes to the pricing model that will improve retention (such as offering users reductions if they renew)

Conclusion

As you can see, CRO in SaaS can be a complex issue, requiring cooperation between the marketing, product and business teams. You might need the support of a data analyst to be able to focus on analysing your funnels and product engagement.

While hiring a dedicated CRO specialist is something that only ecommerce companies usually do, SaaS companies can also consider having a CRO manager who oversees these efforts and coordinates all the relevant teams.

Despite the difficulty and complication of this process, following some basic best practices and using learning loops to continually improve is feasible in any size of company–even if it is just the founders bootstrapping their own SaaS startup.

CRO at Move78

At Move78, we support our partners by conducting a full growth audit, analysing each step of their funnel and managing experiments and learning loops to improve across the board. This includes CRO in the Acquisition, Activation, Monetisation and Retention phases.

We have most recently conducted a complete CRO audit of Zellar–a Sustainability as a service company–which included landing pages, A/B tests on messaging and CTA’s, a full revamp of their acquisition and activation email funnels, and a fundamental overhaul of their monetisation model, shifting from a free trial to a freemium model, and simplifying signup journeys and forms.

This process included redesigning the pricing page, changing the order of the onboarding steps to make signing up easier and more traction-free, redesigning the cancellation process in order to encourage retention, and strategically defining their product in a way that minimises churn.