How to Increase Your Website Conversion Rate and Reduce Customer Churn to Become More Profitable!

We are going on a bear hunt… I’m slightly scared

by William Roberts

beare hunt to improve conversion optimisation

As a child one of the best presents I ever received was the SAS survival guide*. In my eyes it basically transformed me from a 7 year old into Rambo at the turn of a page.

I got it into my head to decide to build a bear trap despite living in Hong Kong where there are no bears. I waited for hours and nothing came along. Where were all the bears? What was I going to tell my friends, I had promised them a grizzly!

This is where a lot of people and companies go wrong in marketing, they don’t realise they are trying to capture the wrong thing and are optimising for the wrong goals.

Most marketers and people in sales know about front-loading the funnel. Millions are spent every year on driving traffic to websites in the hope of converting that traffic into long-term customers with a positive ROI (return on investment).

Customer user Journey

Attracting the right audience is becoming increasingly difficult due to media saturation and a whole host of different platforms (Facebook, Twitter, Pinterest, Linkedin, Instagram etc) and techniques (affiliate, SEM, SEO, display, retargeting, offline etc) you now need to cater for and experiment with. Andrew Chen has written a great post about the Law of Shitty Clickthroughs* which can be summed up as follows: “over time, all marketing strategies result in shitty clickthrough rates..”

My purpose is not to lament about the pros and cons of different marketing techniques and channels (as this is well covered elsewhere and I will provide some useful links below), but to propose two other metrics that are often neglected and they are 1) conversion optimisation and 2) decreasing churn

Top Digital Priorities For Businesses in 2015 Source: econsultancy 2015

It stands to reason that if you are driving traffic to your website, you should be trying to convert it into a paying customer as much as humanly possible, or you will start to lose money.

Below this article, I have listed a number of useful tools which can help you increase your online conversions with landing page testing and understanding your customer’s journey better.

The Top 5 Tips for Conversion Optimisation

1) Understand what exactly you are optimising for. This sounds obvious, but you would be amazed at how many people get it wrong. Are you optimising for new customers, Lifetime Value (LTV), existing customers, subscription revenue or one-off purchases (the list goes on)? Understanding this helps you define a strategy going forward and gives you an actionable goal. I would strongly recommend to optimise one conversion point at a time and working your way through the whole purchase funnel from marketing, to landing page, to signup, to purchase, to repeat purchase, to referral.

2) Analytics and Testing — measure your conversion rates across your whole site and by marketing channel. This is the single biggest place you can move the needle from the beginning. Do you know what a user does when they come to your site? Where do they go? Where have they come from? How profitable are they and is that marketing channel driving positive ROI? To start understanding this better, there are some really useful tools that you should check out: Google analytics (free), MixpanelKissmetrics and Crazy Egg, to name but a few. For the more technical amongst you, I would strongly recommend checking out Segment.

Conversion Rate Optimizaton, analytics and testing

3) Know your customer. This is very closely aligned with your analytics and testing. Do you know what your customer looks like, i.e. demographic details, location, average age, interests etc? You should start making customer personas for your products i.e what does the perfect customer look like for XYZ product. Here is a great post about how to make customer personas . Once you know your customer personas you can then target these people in your marketing channels (I particularly recommend Facebook Custom Audiences). The more targeted the marketing channel, the more likely they are to convert.

4) Usability — It is absolutely paramount that once you’ve got a customer through to your website (through marketing channels or other means) they know what it is they are supposed to do. Have you got clear calls to action? Is your product explained clearly and do you have a convincing message of why they should use it (Dan Ariely recommends telling a story)? Is your website accessible and usable across all platforms (mobile, desktop and tablet)? Have you tested different landing pages to see what is the most effective at driving conversions (a great tool for this is Optimizely)?

5) Love your customer — once you have sorted out the above and ensured your customers have a product they want, you need to nurture them. After all, one of your key conversion goals should be getting referrals! You need to make it easy and painless for them to understand what to do on your site. Use tools like and Freshdesk to respond to their queries and get them through to that all important conversion point and, just as importantly, keep them coming back and telling others. Another really powerful option is to provide rewards, incentives and discounts to get a potential customer to do something i.e convert . This is not new and, in fact, there is a whole science around it. Start reading about behavioral economics and psychology (here are two goods books: 1) Priceless * and 2) Influence * to get you started, no affiliate links I promise 😉). Or read my take on the three most important psychological traits that affect conversion rates.

“Today’s customers are looking for a personalized approach along their entire lifecycle.” Todd McElmurray, European ecommerce Marketing Director at Toys “R” Us

Step by Step Actions to Reduce Customer Churn.

Wikipedia’s definition of Churn rate, sometimes called attrition rate, in its broadest sense, is a measure of the number of individuals or items moving out of a collective group over a specific period of time. It is one of two primary factors that determine the steady-state level of customers a business will support.

Money draining out of a bucket

Put simply, businesses pay a lot to drive traffic to their websites and then get it to convert. Many stop here, thinking the job is done. They could not be more wrong. Enter in the dreaded customer churn.

Churn massively affects your bottom line. You could be amazing at signing up paying customers, but if they all go away (subscription services, SaaS etc) or never come back (ecommerce) you do not have a business, not in the long run anyway.

Decline in Customers from Churn

“Three quarters of customers never become profitable, and yet such heavy focus is still placed on acquisition! It’s enough to make an economist weep.” Ohad Hecht, Emarsys

On the flip side, if you find out how to reduce churn, it can have one of the biggest positive impacts on your bottom line.

So what can you do about it…

Step 1 — identify that it is happening. Don’t bury your head in the sand and focus only on your amazing conversion rates. Make sure you track and have reporting for your churn rate. Preferably do it by cohort (cohort analysis). See here: How to calculate your churn rate .

Step 2 — find out the reasons why your customers are deserting you. Is it a product issue? Is it a pricing issue? Is it a poor customer experience? Is it a lack of understanding about what your product can do for them? Poor customer service?

Yes a lot of questions, but if you find out the answers, you are on your way to solving the problem. TOP TIP — get customer feedback (send out surveys i.e surveymonkey, use tools like, get on the phone to your customers, visit them in person and use tools like usertesting).

Step 3 — start addressing what you have found in step 2. If it’s a product issue, fix it. If it’s a problem with your pricing then start testing different options. Above all listen, learn and then keep your customers informed about your fixes. People are very forgiving if you tell them what is going on and let them know you are working on it, as — let’s face it — some of these issues take time to fix (particularly product-related ones).

“It costs five times more to acquire a new customer than to retain one.”  – Harvard Business Review


If you can focus on optimising your conversion funnel intelligently and reduce churn, you will be well on your way to dramatically increasing the revenue of your business. I cannot stress how important these two metrics are once you have a product people actually want. I have listed out the tools and tips I describe in this article below. If you have any suggestions on tools and products I should add then please do get in touch. You can tweet me (Will) at @gohandizo, and I will do my best to respond in time.

A list of tools and tips to help you increase conversion and reduce customer churn.

Useful Conversion Tools

Optimizely – Deliver your best customer experiences at every touchpoint on the web and mobile apps. ** – incentivise any action or conversion point on your website to increase sales, signups, referrals and reduce churn

Mixpanel – Analytics platform

Kissmetrics – Customer intelligence and web analytics

Crazy Egg – Visualise where your visitors click

Clicktale – Build a Better Online Customer Experience

Segment – Segment is the single hub to collect, manage and route your customer analytics data.

Hubspot – Inbound marketing and sales software

Keep Your Customers Happy – helps you send targeted human messages to your users, by utilizing their unique interactions with your business.

Freshdesk – Customer happiness, refreshingly easy.Deliver exceptional customer service with Freshdesk — trusted by 40,000 companies worldwide.

Surveymonkey – send out free customer surveys

Usertesting – Give your users a great experience

Identify Your Customers

Super Users ** – Identify who your customers are from their email address and then turn them into promoters.

Useful Marketing Channels and Ideas to Test

Facebook custom audiences

Twitter cards


Useful Blogs, Books, Communities and Authors To Get You Started

Nir Eyal – This blog is about the intersection of psychology, technology, and business. I call it “behavioral design.” The topic encompasses user experience, behavioral economics, and a dash of neuroscience.

Dan Ariely – I do research in behavioral economics and try to describe it in plain language.

Priceless by William Poundstone – The Hidden Psychology of Value

Drive by Daniel Pink – The Surprising Truth About What Motivates Us.

Influence by Robert Caldini – The Psychology of Persuasion

Andrew Chen – I’ve written 550+ essays which have been featured and quoted in The New York Times, Fortune, Wired, and WSJ. The topics range from mobile product design to fundraising to “growth hacking.”

Growth Hackers – unlocking growth together

Nick Kolenda – The Psychology of Pricing: A gigantic list of strategies

*I am not affiliated with these companies or resources in any way and only recommend them as I have found them useful myself and hope you do too.

** Full disclosure: I am the cco-founderof these products

This article contains parts from our eBook “The Ultimate Guide to Loyalty and Retention“. Check it out!

About the Author :

Founder, Director of Product and Marketing at Loyalty Bay. I’m tasked with creating global scalable products and building out the Product and Marketing teams, now that we are part of Perkbox.

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