Finding the real ROI of your CRO efforts - Interview with Nils Koppelmann

Getting the right mindset can help businesses to see real ROI on their CRO efforts.

We discussed this and more in a recent episode of “Click To Buy”, where Instant welcomed Nils Koppelmann, founder, and consultant at 3tech.  

In an industry often preoccupied with numbers, Nils Koppelmann reminds us that the heart of business growth lies in the human-centric approach — understanding, serving, and delighting your customers.

With his extensive experience in conversion rate optimization (CRO) and experimentation, Nils provides valuable advice for companies aiming to grow through these methods.

This article explores the main takeaways from our discussion, including CRO, A/B testing, and user-centric strategies. 

To listen to our full conversation, tune into the full episode: 

Emphasizing a user-centric approach

Nils stresses the importance of moving away from preconceived ideas and focusing on understanding customer needs. 

He notes, "It's about talking to actual users, to customers, find out why people have made a certain kind of action... and really understand why users are coming to you, why they love your products."

Part of this user-centric approach is being open to new ideas, even if they are the total opposite of current practices. 

He believes that this openness doesn't mean everything done so far is wrong but could lead to surprising insights: "Being very much open to discovering new things and letting down this ego to a certain degree."

Experimentation mindset in different company types

Nils observes that well-established companies often struggle with adopting an experimentation mindset. Their established frameworks make it hard to change, posing a significant challenge. 

Newer companies, on the other hand, often embrace experimentation more readily due to their less rigid structures and stronger drive for innovation. He points out that for these companies, "it's oftentimes easier, but yeah, it's a challenge, either way."

Upskilling and resources for CRO

Nils advises starting with external help like freelancers or agencies, especially for companies without internal resources for A/B testing. He recommends, "start building up processes and running the first test, but also doing the underlying research."

For individuals eager to learn CRO, Nils recommends Ruben de Boer's resources and courses on CXL. He emphasizes the importance of applying knowledge to real-world scenarios: "The skill is not increasing a conversion rate... but if you want to understand users, understand their behavior and the whys and the whats, then actually finding through research, something that you want to optimize or just better understand."

Frameworks and tools for effective experimentation

Looking into behavior psychology is a great way to enhance your experimentation strategies. 

The Seven Levels Model and the BJ Fogg Behavior Model are frameworks Nils frequently uses. He describes them as essential tools for understanding how to influence user behavior in both online and real-world settings.

For those looking for additional resources, Nils suggests engaging with the experimentation community on LinkedIn.

Insights from Amazon and other major players

When brands are considering what to test, one tactic is to look at what the big players in eCommerce are doing. However, while looking at Amazon can be inspiring, it's important to validate their strategies against one's customer base. 

He remarks, "Getting inspiration from some of the big players doesn't necessarily mean that you have to do the same things. But I think the most important thing is to get inspired."

Nils stresses the importance of applying insights tailored to a company's specific needs. He advises against merely copying strategies from other companies without considering the unique context of one's customer base.

The true value of experimentation

Although properly executed experimentation can have monetary benefits for a company, Nils argues that the value of experimentation isn't just in monetary terms. 

It also lies in the decision-making confidence it provides. 

He believes that experimentation can prevent wrong decisions and save money: "How many wrong decisions can I prevent myself or the company from making, and how much money is that saving?"

Not only can CRO help with better decision-making, but Nils discusses his theory of how experimentation can help increase workplace happiness. 

He believes that as employees begin to enjoy testing, they can see the impact of their work, which can lead to increased job satisfaction and productivity.

Challenges in conversion rate optimization

Many companies share the same misconception when it comes to experimentation. 

They only focus on improving their conversion rates. 

But they don’t think about the human element. 

He believes that understanding what drives customers is more important than just aiming to double conversion rates: "If brands focus on improving their conversion rate, they're already doing something wrong."

Nils advises focusing on the customer journey and experience rather than just the conversion rate. 

He argues that improving the customer experience is the key to seeing better results on the balance sheet: "How can we increase the experience, as you said, for the user, for the customer? That's the way to actually, on the balance sheet, see the result."

ROI of experimentation and CRO practices

When it comes to calculating the ROI of experimentation, Nils acknowledges the complexity of the task. He explains that while you can use calculators to estimate the additional revenue an A/B test may generate, it's not an exact science. 

The real value comes from "the learnings, the mistakes you are not making by actually answering questions that you would otherwise just use guesswork for."

Nils insists that the key to successful experimentation is asking the right questions rather than setting arbitrary goals like doubling conversion rates. By focusing on the right problems, businesses can make confident decisions that lead to positive ROI.

Final thoughts

To sum up our conversation, Nils reflects on experimentation as a journey of growth and learning. 

He encourages companies to embrace the mindset that being wrong is an opportunity for progress. "When something feels hard, that's where you grow," he says, drawing parallels to the growth online businesses experience through experimentation.

Nils also touches upon the common pitfalls in eCommerce CRO. He criticizes the narrow focus on conversion rates without understanding customer behavior. Instead, he urges businesses to put the customer first, understanding their motivations and tailoring the experience to meet their needs.

Remember, when it comes to CRO, it's not just about increasing numbers but about making better business decisions, fostering a culture of innovation, and contributing to the overall health and happiness of a company.

As Nils's segment on the "Click to Buy" podcast concludes, he leaves listeners with a challenge to think differently about experimentation and CRO. He suggests that the true metric of success in this field is not merely the conversion rate but the broader impact on the company's culture, decision-making processes, and, ultimately, its customers.