What Is Conversion Rate Optimization (CRO)?
Conversion Rate Optimization is a set of tasks mainly focusing on increasing the percentage of online visitors to perform a specific action. A conversion can be a lot of things; purchasing a product, signing up for a newsletter, downloading a whitepaper, among many others.
The task of optimizing the conversion rate can also be led by different teams such as:
People who work with Conversion Rate Optimization, hereafter CRO, mainly focus on specific steps that people usually take before the desired action, and investigate and experiment with optimizing those steps so that the most amount of people end up converting.
Why CRO Should Work With OKRs
If you’re working with CRO, and not yet using the OKR framework, you can definitely benefit by doing so. The framework helps laser-focus on what’s most important (more on this below) and makes it very easy to reject tasks and projects that are not helping achieve the CRO goals.
What’s Important For Conversion Rate Optimization OKRs
To start working with OKRs, it’s important to sit down and discuss the following two key aspects:
What is the primary goal of Conversion Rate Optimization?
When is the the Conversion Rate Optimization process a success?
Conversion Rate Optimization: The Primary Goal To Achieve
One of the benefits of the OKR framework is that it helps teams focus. Focus on what’s important and zoom in on, optimally, a single goal for each OKR cycle. Before defining the OKRs, it’s a great idea to discuss the scenario where the team could only achieve one thing for the next OKR cycle. What would be the primary goal?
As we mentioned earlier, the primary goal of Conversion Rate Optimization is to increase the conversion rate.
When Is Conversion Rate Optimization A Success?
Related to the primary goal of Conversion Rate Optimization, it’s important to define when Conversion Rate Optimization efforts are considered a success. This will help clear any doubt about whether some project added value or not, as it will be very clear, due to the nature of OKRs, if it was achieved or not. Some may think that it should be possible to increase the conversion rate by 200%. Others may think 20% is more than “enough”, so defining this from the beginning is crucial.
What Makes A Great CRO OKR
As you can see from the examples above, there are plenty of ways to create and formulate OKRs. But there are key requirements that OKRs should pass. If you're interested, read our post about good vs. bad OKRs and see if you can spot the key differences.
Why CRO Key Results Should Not Be Binary
If you google “key result examples”, a lot of times you’ll stumble across many sites suggesting that you could create key results like “Launch new feature X”. Don’t! Why? Because what if you launch that feature and the conversion rate doesn’t change?
The purpose of Key Results is to enable you and your team to track progress on them, objectively. You should be able to pull in a person from the street, give them access to your data and have them answer how you’re doing.
But if your Key Result is binary, you’ll only be able to answer the progress questions once you’ve finished the OKR cycle. That’s a problem and it’s one that lots of teams who work with OKR face.
A great exercise that will enable you to get rid of binary key results is to ask yourself “Why do we want to do X?”. Maybe your team has observed a problem and plan on doing something to fix it. If you do, what state will that put you in? What will the desired outcome be? That should be your key result.
How Often Should I Track Key Result Progress?
You should track progress on your key results as often as you expect there to be changes in progress. Imagine that I have a key result saying “Increase conversion rate from step A to step B by 20%”. I know that it requires a lot of experimentation and some development, so tracking the progress on a weekly basis is likely too often, as we’ll also need time to gather and analyze data first.
On the other hand, if I know the experiments are small, and that the traffic is large, then I can maybe report on the progress weekly, as significant difference should show itself quite quickly.
How Ambitious Should CRO Key Results Be?
In short, key results should have a probability of being achieved of 50%. But why 50%? One of the requirements for key results is that they should be very ambitious.
The reasoning here is that people very often overestimate what they can do in a day, but underestimate what they can achieve in a month or quarter. And so, setting ambitious targets often lead to extraordinary results. This is one of the reasons why the OKR framework is so popular.
In addition, when scoring your key results, it’s usually told that achieving 70% of your target goal is enough to call the goal “achieved”. This is again one of the reasons why key results shouldn’t be binary as you’ll then only succeed or fail. Nothin in-between.
How Many Key Results Per CRO Objective?
You should create as few key results as possible to achieve your objective. The overarching benefit of OKRs is laser-focus. Creating too many key results will spread focus and you’ll likely have too many initiatives not being related to each other. Also, improving on one key result should ideally not affect progress on another. If so, then they’re likely too dependent on the same things and should instead be merged into one.
We usually say that unless your objective is covering a larger team, sticking to 1 or 2 key results should be enough. Remember, the key here is to be very focused on moving in the same direction.
Large corporations often have more key results, but that’s usually also because each department or team is responsible for one each. This makes great sense, but if you’re creating them for your own small team or yourself, stick to as few as possible.
How Many Key Results Per Team Member Working With CRO?
If you’re setting key results on an employee level, you should aim to stick to as few as possible. The reason is that employees are likely also working on team or company OKRs and their focus should be as tight as possible.
Prioritize CRO Outcomes Over Task Outputs
Working with Conversion Rate Optimization, it’s easy to get caught up focusing your day-to-day work on the outputs of what you do. Doing X gets us Y. You shouldn’t do that.
OKRs are meant to force you to think about your desired outcome. The happy place where you’ll be once you’ve done the necessary work to get there. Think: “If we succeed with this, which things will have changed and to what?”.
Then activate the people in your team and democratize how you’ll get there. The key way to turn output-focused goals into outcome-focused goals is to ask “why?”. “Why do we want the output you’re describing?”.
The Initiatives Is What Will Get You Over The Finish Line
OKR initiatives are day-to-day tasks that you do in order to achieve your OKR objectives. The results are measured by your Key Results and will ultimately determine whether your initiatives were the right choice or not.
Initiatives are super important because they make sure that everyone involved is working towards the same goal; achieving the objective. Whenever you start planning your OKR cycle, make sure that you immediately start brainstorming on initiatives as well. This often gives people a great idea about whether you're stretching too far or if you're being ambitious, but also realistic.
How CRO OKRs Should Be Structured
When you create your OKRs, they should include these elements at minimum:
Before the cycle, it’s important to have these three defined, as they’ll help set direction and keep people accountable.
Ideally, as mentioned earlier, you should also start brainstorming early on initiatives that you think could potentially drive the OKR forward.
Criteria For CRO OKRs
Overall, a great Conversion Rate Optimization OKR should follow the SMART guidelines of being:
1st Conversion Rate Optimization OKR Criteria: Specific
Your OKR should be specific enough so that when other people within the organization, that aren’t necessarily on your team, knows what you’re working on. No one ever got punished for having an OKR that was a bit too long. Instead, writing fuzzy or unclear OKRs is a definite no-go.
2nd Conversion Rate Optimization OKR Criteria: Measurable
Because OKRs are usually working with specific metrics, it’s a lot easier to check the box that the OKR is measurable. We measure things that are relevant to progress within SaaS.
3rd Conversion Rate Optimization OKR Criteria: Achievable
It’s important to have achievable OKRs. They should always be ambitious, but nothing is more demotivating than unachievable goals. A rule of thumb is that the chance of achieving a Key Result should be around 50% from the start. If you reach 70% and above, it’s considered a success.
4th Conversion Rate Optimization OKR Criteria: Results-oriented
Being focused on results is a very important aspect of OKR. It’s so important, that we’ve dedicated an entire section to describing why you should focus on outcomes over outputs below.
5th Conversion Rate Optimization OKR Criteria: Time-bound
A key part of defining a goal is also defining when you’re expecting it to be met. For OKR, your goals are usually divided into different cycles and your goals should of course be reached within the end of the cycle.