Why Landing Page Optimization Is Crucial To Your Success Online – 4 Reasons

Highrise Design

The testing industry has fully arrived.

With Optimizely raising $57M in a Series B round, you can be sure that testing is the future. And why not? More people are beginning to realize that everything must be tested, all the time, in order to maximize the ROI of your digital marketing investment, whether in SEO or PPC.

Most people understand the benefits of landing page optimization as a revenue lift, and while this is certainly true, there are additional benefits to landing page optimization.

Here are four reasons why optimizing your landing pages is crucial to your success online:

1. Determining your Value Proposition

There’s a reason that so many startups simply put up a single landing page to advertise their product when they first launch. Measuring the impact of copy of conversion rate is one of the most effective ways for you to determine your core value proposition.

Here’s a simple headline test that DCFinder, a SaaS startup, ran in order to determine the core value proposition of their product:

dcfinder

Testing headlines is one of the best ways that you can determine what your core value proposition is. In this case – like many other tests – customers did not feature so much about the features as they cared about the benefits.

Honing in on your exact value proposition not only raises conversions on a landing page but also makes it extremely easy for you to determine what your customers care about really quickly – this will help you when pitching your product to partners, PR, or anyone else.

2. Improving your Brand

Another understated benefit of landing page optimization is improving your brand. Presenting customers with a beautiful first impression is one of the surest ways to improve overall perception.

Here’s an example of one of my favorite A/B tests performed by Highrise showing the impact of stunning design on conversion:

HighRise

Without interviewing customers, it’s hard to know exactly why more people decided to convert on the second page – but, by looking at the designs we can take a few good guesses:

  • The new page conveys customer care and connection: While the design on the left-hand side of the page is strong, the right hand page conveys a stronger connotation. You can feel a more one-to-one connection with the product and customer simply by looking at a smiling photo.
  • The new page is a simpler design: The left hand side design is comprehensive, which can work in some cases. But, for Highrise’s target audience (likely SMBs), a simpler design may have appeared less intimidating and easier to understand.

Some landing page designs improve conversions at brand’s expense, adding in lots of sales language that – while this may boost conversion – often “oversells” the customer. But, this is a clear case of how you can improve both with a simple landing page design.

3. Increasing Customer Referrals

Measuring optimization success by revenue uplift is only one small piece of the benefit of landing page optimization.

Most companies view the ROI of optimization simply compared to how much they’ve invested in optimization – as measured by time or agency fees – and comparing that to the amount of net profit that the optimization is expected to earn. To keep things simple, we’ll assume that the net profit lasts for 1 year.

So for example, a 10% lift on a $1M e-tailer would deliver $100K incremental revenue. At a 20% net margin, that’s $20K in net profit. Let’s assume that the optimization services cost $5K in either time or direct agency fees, so the return on investment here would be $15K/$5K = 3x.

However, this calculation is a bit short-sighted for a few reasons:

  • Customer LTV is higher than revenue gained: Getting a customer to buy once often means that they’ll buy from you again. The LTV of a customer is higher than the short-term revenue uplift in most cases.
  • New Customers will send you more new customers: This is, in my opinion, the most overlooked feature of optimization. Creating new happy customers will undoubtedly fuel word-of-mouth and return new, buying customers to your door.

The ROI of a referral is extremely high and any small business owner (or really anyone who owns any size business) will tell you that customers who come through a referral are some of the highest spending and most likely to be satisfied.

Testing landing pages for optimal conversion will get new customers in the door and help drive additional word of mouth down the line.

4. Reducing PPC / SEO Costs

And finally, the “tried-and-true” success measure for optimization –

Improving landing page conversion will reduce your PPC costs and improve the ROI of SEO. Conversion rates and online marketing ROI are directly correlated.

Here’s an example:

Say that you are running a PPC campaign at $1/click getting 1,000 clicks/mo. Your current funnel and CPA looks like this:

  • 1,000 clicks * 10% conversion = 100 new leads/mo
  • 1,000 clicks * $1/click = $1000 total spend
  • $1000 spend / 100 leads = $10 CPA

But, let’s say that you do an incredible job optimizing your landing page and you improve conversions by 20%. Remember, that’s a percentage increase, so your new conversion rate is 10% * (1 + 20%) = 12%.

Here’s how your new math looks:

  • 1,000 clicks * 12% conversion = 120 new leads/mo
  • 1,000 clicks * $1/click = $1000 total spend
  • $1000 spend / 120 leads = $8.33 CPA

Math Geek Side Note: Did you catch the relationship between your conversion increase and your cost decrease? It’s inversely proportional, sort-of. All you do is take 1/(1+ conversion uplift), then multiply that by your new CPA to find the new marketing cost. In this example:

  • (1 / 1.2) = 0.833 * $10 lead = $8.33 CPA

This same calculation goes into your SEO costs – lifting conversion rate by 10% or 20% will improve leads and thus the ROI of SEO.

Summary

If you’re not testing, you’re missing opportunities – not only to improve ROI but to determine your core value proposition, build your brand, and increase customer referrals.

Featured images:
  •  License: Image author owned
  •  License: Image author owned

Author Bio

Andy is a landing page geek, spending most of his free time analyzing landing pages and coordinating optimization competitions at Uplift. He has over four years of direct marketing experience and loves helping clients increase sales at positive ROI.

Get More Killer Tips

Subscribe To Our Mailing List And Get Interesting Stuff And Updates To Your Email Inbox

Thank you for subscribing.

Something went wrong.

Select Language

Get more killer tips like these
in your inbox

Subscribe To Our Mailing List And Get Interesting Stuff And Updates To Your Email Inbox

Thank you for subscribing.

Something went wrong.