What Is AI Conversion Rate Optimization (CRO)? (2024) – Shopify

When OpenAI released ChatGPT, it transformed artificial intelligence (AI) from a specialized technology into an accessible tool. With more than 250 million people using AI in 2023, its rapid growth has had a huge impact on virtually every industry—including ecommerce.

Businesses are increasingly turning to artificial intelligence to develop a competitive advantage in a market where customer expectations are higher than ever. AI provides a powerful solution for online merchants whose success depends on converting visitors into consumers. Here’s how to implement AI conversion rate optimization to help you increase conversions and grow your business.

What is AI conversion rate optimization?

AI conversion rate optimization (CRO) is the use of artificial intelligence to increase your conversion rate, or the percentage of potential customers who take a desired action on your site like buying a product or signing up for a newsletter.

Artificial intelligence CRO uses advanced algorithms and machine learning to analyze vast amounts of data about how users interact with your website or campaign, including how long they spend on your site, what they click on, and what they buy. By making sense of complex user behavior patterns, AI can predict future visitor behavior and make real-time adjustments to increase conversions. AI-powered CRO technologies continuously learn and adapt, leading to more precise and effective strategies than traditional conversion rate optimization tactics.

Benefits of using AI for conversion rate optimization

• Saves money
• Increases efficiency
• Scales your efforts

Here are some benefits of using AI tools for conversion optimization:

Saves money

Traditional conversion rate optimization can be expensive. Manual CRO efforts often include hiring consultants and doing extensive testing, requiring significant resources to plan, implement, and monitor. AI tools for conversion optimization can automate much of this process.

Implementing AI systems may require an initial investment, but the long-term benefits include substantial savings. Artificial intelligence solutions can quickly identify and fix weaknesses in your conversion funnel, such as technical issues like broken links or slow-loading pages that lead to revenue loss.

Increases efficiency

Commerce professionals report that AI technology saves them an average of 6.4 hours per week. By automating much of the manual labor involved in traditional CRO, AI conversion optimization tools can improve the efficiency of your marketing efforts. AI marketing tools can do everything from analyzing user behavior and web traffic to creating and testing new campaign ideas, saving valuable time that can be spent on more strategic initiatives.

AI tools process and analyze data at an incredible speed, allowing for immediate adjustments to your content strategy. For example, a retailer using AI for website optimization might automatically feature a trending product on its homepage after AI detected a spike in interest.

Scales your efforts

AI-driven CRO tools can help you grow your optimization efforts by handling larger volumes of data and more complex tasks without needing to scale up your resources or personnel. With this level of scalability, you can keep high performance standards without having to hire more people.

3 ways to use AI to increase conversion rates

1. Automated A/B testing
2. Customer service chatbots
3. Hyper-personalization

Here are three ways to use AI to improve your conversion rates:

1. Automated A/B testing

A/B testing, or split testing, is a tried and true method to boost conversion rates that AI has made even more effective. This approach involves comparing two versions of your website content or landing pages to see which version produces better results. AI tools can accelerate the conversion optimization process by showing site visitors different variations of button colors, headline copy, and calls to action (CTA) in real time. As users interact with your content, AI systems can quickly spot high-performing elements that lead to higher conversion rates, and implement them sitewide.

A notable example of AI-powered A/B testing is Netflix’s content recommendations. Netflix constantly runs tests on its home feed to determine which design elements lead to higher user engagement, helping Netflix retain customers.

To start automated A/B testing, identify the areas where you think you may be losing customers, like your homepage, product pages, or the checkout process. Platforms like Google Analytics can provide data on key performance indicators (KPIs) like cart abandonment and bounce rates to help you pinpoint these drop-off points. Then, use an AI tool like Intelligems or Shoplift—both available on the Shopify app store—to test different versions directly on your website.

2. Customer service chatbots

AI-powered customer service chatbots can enhance customer engagement and improve your website’s conversion rate. With prompt, 24/7 support, AI chatbots can boost customer satisfaction and reduce the likelihood that potential customers leave your site without taking an action. Try platforms like Tidio and Willdesk to integrate chatbots into your website or online store.

Unlike chatbots of the past, which used pre-programmed responses, AI chatbots understand natural language and complex requests, making interactions with customers more personal and human-like. They also collect data and learn from interactions to provide personalized experiences.

3. Hyper-personalization

Hyper-personalization is one of the most talked about AI-driven CRO methods—and for good reason. This conversion rate optimization technique can boost conversion rates by helping market to customers on an incredibly personal and granular level. Before AI marketing tools, marketing teams personalized content through customer segmentation—splitting customers into groups based on common traits like age or interests to market to them separately. However, segmentation often lacks precision and can lead to messaging that feels generic.

Hyper-personalization, on the other hand, creates highly targeted experiences based on each customer’s unique behavior, purchase history, and even their interactions with your social media accounts. This lets you customize product recommendations and content to speak directly to each customer’s needs and preferences. For example, imagine a customer browsing your online clothing store. With hyper-personalization, the AI system can track their past purchases and browsing history so that when they return to the site, they’re immediately shown product recommendations that match their style preferences.

By making customers feel understood and valued, hyper-personalization not only increases conversions but builds lasting customer loyalty and boosts customer lifetime value (CLV)—the total revenue you can expect to generate from a customer throughout their relationship with your business.