CRO is a Stupid Metric - Here's Why...

Jul 16, 2024

Drew Marconi, CEO of IntelliGems, discusses why traditional Conversion Rate Optimization (CRO) metrics are misleading. He argues for a profit-centric approach, emphasizing profit per visitor over mere conversion rates. Drew encourages marketers to run bold tests, even if they lower conversions, as potential profit gains can be worthwhile. Personalization of customer experiences and understanding cost structures are key themes, along with the importance of embracing innovative pricing strategies to enhance profitability in today’s challenging e-commerce landscape.

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Intro

00:00 • 2min

Navigating Profitability Challenges in E-Commerce

02:02 • 4min

Shifting Focus: From Conversion to Contribution

06:21 • 8min

Navigating Pricing Strategies for Enhanced Profitability

14:40 • 2min

Challenging Conventional Metrics in Marketing

16:20 • 2min

Navigating Pricing and Conversion Strategies

17:53 • 26min

Mastering Product-Market Fit

43:42 • 6min

💰 Intelligems - The Ultimate Profit Optimization Tool 🔗 https://www.intelligems.io/

In this special edition of Chew on CRO, Ron and Ash are joined by Drew Marconi, CEO of Intelligems, as he challenges the traditional focus on Conversion Rate Optimization (CRO) as the sole metric for success in marketing. Their conversation emphasizes the importance of understanding profit margins, cost structures, and customer behavior to optimize marketing strategies effectively. By analyzing metrics like contribution margin and profit per visitor, marketers can make informed decisions to improve profitability. Drew highlights the significance of testing different strategies, such as adjusting pricing and offers, to enhance overall business performance. Simplifying testing processes and utilizing AI tools can help marketers make data-driven decisions to achieve their business goals efficiently.

📈 CRO is a vanity metric; profit is sanity. Focusing solely on conversion rate can lead to a loss of profitability.

💰 Prioritize profit per visitor over revenue. Understanding how different offers and pricing strategies impact profit margin is key.

🧪 Don’t be afraid to run tests that may lower conversion rate. The gains in profit might outweigh the conversion drop.

🎯 Segment your traffic and personalize experiences. Tailor landing pages, offers, and creatives based on user behavior and source.

🚀 Test often and make bold changes. Early-stage brands should focus on big swings, while established brands can experiment with smaller tweaks.

0:00 - Intro.

3:00 - Understanding profit margins and conversion rates.

6:15 - Testing different strategies to optimize profitability.

7:12 - A focus on metrics like contribution margin and profit per visitor to make informed marketing decisions.

10:50 - Understanding cost structures and profitability for effective marketing strategies.

13:56 - Analyzing COGS to determine profit margins and customer acquisition costs.

16:03 - Testing different strategies beyond the norm.

19:04 - Testing pricing strategies.

21:08 - Simplifying testing processes.

23:23 - Profit margins and cost structures in marketing strategies.

24:12 - Analyzing metrics to help make informed marketing decisions.

25:08 - Adjusting pricing and offers.

33:08 - Traffic segmentation for improved conversion rates.

35:06 - Personalization and targeting specific segments.

39:03 - Testing different ad variations.

48:52 - Final chews. Follow us, subscribe to our newsletter, and to see our exclusive merch check out https://chewonthis.io/ Ron Shah - https://twitter.com/obviceo Ash Melwani - https://twitter.com/ashvinmelwani Chew On This - https://twitter.com/chewonthisdtc