5 ways AI transforms conversion rate optimization (CRO)

This article explores five ways in which AI-powered tools are changing conversion rate optimization practices while helping online businesses improve conversion rates, enhance customer experience, and boost sales. (Ziv Egozi- Tavlin CMO)

The advent of Artificial intelligence is revolutionizing the way e-commerce websites and online shops engage in conversion rate optimization. With new AI algorithms and applications available, a transformative shift is ongoing in the field of CRO.

Using dedicated AI tools online businesses are now better able to optimize and personalize the user experience of new and returning visitors. CRO insights are implemented in the user sales funnel in order to increase the chance of conversion leading to a sign up and purchase. 

In the last decade, the craft of better converting visitors into paying customers using personalization, UX/UI variations and audience tailored call to action has been an integral part of marketing operations of every online brand.

The reason conversion rate optimization is a primary focus for marketing managers is of the  vast amount of potential users available online, even a small increase in overall conversion rates could result in a major increase in income.

The effects of using AI in conversion rate optimization

As incremental improvements in customer conversion rates accumulate resulting in higher return on investment (ROI), conversion rate optimization has been in the forefront of online marketing operations. 

Consequently, the biggest e-commerce brands such as Google, eBay, Amazon and more have the resources and personnel available to conduct CRO testing on their customer base, other less prominent vendors lack the data, technical know-how and financial backing to compete with corporate entities. 

However, with the recent explosion of machine learning, big data, AI and by extension LLMs(large language models) allow website owners to not only create content and images en masse but also to draw actionable UX/UI insights. AI facilitated insights based on real  world data allows for optimization aimed to make a noticeable impact on customer conversion.

By harnessing advanced AI algorithms, AI based A/B testing tools, heatmaps and content/image generation, e-commerce sites are now able to close the gap with industry leaders while drastically improving website performance on par with the best.

Here are 5 aspects in which artificial intelligence transforms the way online businesses and e-commerce sites conduct conversion rate optimization(CRO) as part of an on-going marketing strategy to increase sales.

1. AI powered hyper-personalized user experience: 

The most impactful way AI changes conversion rate optimization practices is by enabling brands to dynamically adapt website elements for individualised user journeys and sales funnels. Large Language Models (LLMs) are able to scan and review vast amounts of data and derive actionable conclusions beyond the reach of human capabilities.

Leveraging AI technologies to analyze real life customer interactions in addition to training input, AI models are able to facilitate highly tailored audience specific experiences such as product recommendations, personalized content and dynamic pricing.

Furthermore, innovative products like Tavlin Personal Shopper even goes as far as combining insights about customer behavior with an online chat based agent. This smart shopper facilitates sales by communicating in human language via a text interface to produce a complete online shopping experience.

2. Content creation and optimization:

The core of every e-commerce website and online store is its content which serves as the primary means of engaging the audience. Content can vary in form and scope, ranging from product details, product reviews, guest posts, background images, thumbnails and more. 

As before the rise of AI, producing quality content on a large scale would be a challenge for a small business; it required the hiring of content writers, editors and designers. However, now AI tools such as ChatGPT and Google Gemini are able to create relevant content using custom tone and style with a unique flavor, it can generate new texts, summarize and even create detailed images.

Overall, generative AI excels at producing high-quality content with minimal cost, e-commerce owners and marketing managers could skip spending time, effort  and money on mediocre content writers. With Artificial intelligence sites owners can now create dedicated content for specific audiences.

With new AI based products being released on a weekly basis the impact on the online marketing industry and specifically conversion rate optimization is drastic, for example, IDC predicted that “GenAI to Takeover 30% of Traditional Marketing’s Mundane Tasks by 2027”

3. Accelerated A/B testing and experimentation:

AI algorithms and software allows business owners to streamline their A/B testing process. This aim can be achieved by using artificial intelligence to:

• Automate hypothesis generation and new testing protocols

• Reduce manual & time-consuming tasks with AI (reduce the amount of repetitive manual actions)

• Efficiently create multiple website/page variations which means online businesses can rapidly test and iterate on design elements. Moreover, AI’s ability to swiftly analyze test results provides actionable insights, accelerating the optimization cycle to improve conversion rates.

AI large language models enable marketers to create an endless amount of ad-copy variations until discovering the best performing one. But that's not all, business owners must discern actionable data based decisions.

This is precisely how artificial intelligence comes into play. With numerous ad versions you can now compare performance along the entire conversion funnel. 

Once multiple ad copies are combined with an AI A/B testing tool, the machine can set up several testing schedules, run the tests and reach actionable insights. A/B testing using AI algorithms is saving both time and resources. Some would claim that advanced AI tools enable a single equipped professional to produce results equivalent to a team of conversion specialists using older methods.

4. Market/competitor analysis using artificial intelligence:

AI large language models can do a lot more than just writing content, it can analyze pages, texts or snippets to deliver informed feedback. For example, uncover new target markets and audiences targeted by your competition, compare your content to an industry leader or even ask the AI to write a complete market analysis. 

Using AI tools to scan, review and analyze competitors successful pages will most likely uncover insights invisible to the human mind.

The ability to review what successful competition does gives website owners a clear path to improving one's conversion rates. In addition, AI could be asked to create a list of similar keywords based on available clusters and suggest long tail combinations.

Important to note in the case of market research or any complex query that smaller, simple tasks usually outperform bigger ones. That is to say, it is better to consult the AI on a step by step basis while providing feedback and moving towards your goal than ask the machine a single wide query.

5. Create a lookalike audience with AI:

As a business owner you know your audience best. However AI tools can unlock even more insights. You can ask an AI large language model to review your users characteristics as a conversion expert.

By analyzing vast datasets of user behavior, AI algorithms can uncover hidden patterns and preferences, enabling marketers to create highly targeted audience segments. Next, the custom lookalike audience preset could be used on Google Ads or uploaded to other marketing platforms as a custom audience.

An AI generated lookalike audience enables you to expand your target audience by identifying similarities between your ideal customer and potential new audiences.

Generative AI significantly enhances custom audience creation for CRO by automating the identification and segmentation of high-value customer sub-groups. This precision allows for personalized messaging and offers, increasing the likelihood of conversions.

Moreover, AI can continuously refine these audience segments if provided with real-time data or additional training. This process ensures that campaigns remain relevant and effective.