So it was with great enjoyment that I read SEOmoz’ “8 Predictions for SEO in 2010” where one of their predictions is “2010 is the Year of Conversion Rate Optimization.”

SEOmoz, best known for their blog of the same name, is a very well-respected Seattle based search engine marketing company which provides SEO, SEM, website design and other consulting services. Last week, Rand Fishkin, their respected CEO & Co-Founder, wrote:

“If I were doing another startup today, it would focus on software for conversion rate optimization. I think this is still the most under-utilized and highest ROI activities in the marketing department, but more awareness is on its way. CRO isn’t just about testing; it’s about building a process for improving conversion over time. Online businesses can generate so much revenue from this, yet few invest. I think 2010 is the year, simply because it’s an inflection point for companies to assess their spend and where they derive value.”

Rand Fishkin then goes on to present a table describing three tiers of marketing channels and their scores for Average ROI, Average Effort and Average Cost. Conversion Optimization appears in the #1 placement for Tier 1.

Great news for our clients, since that is precisely where WiderFunnel Marketing Optimization plays.

We have been in this wonderful business space called Conversion Optimization since June 2007, as one of the very first companies in the world that identified conversion optimization as the emerging field that would deliver significantly high ROI to clients investing in the strategy, and that would prove to be counter-cyclical once marketing budgets stopped growing as they had been until then.

So, with two and a half years’ experience doing just one thing, conversion optimization tests for clients in all areas and delivering conversion rate lift of up to 290% for them, we have seen a lot of changes – and Rand Fishkin’s observations deserve some pondering and feedback.

• “If I were doing another startup today, it would focus on software for conversion rate optimization”

Rand, don’t do that.

Testing software choices available to businesses today are plentiful and the market is very well served. Robust options, ranging in capabilities and pricing (and even “free”), include Google Website Optimizer; Omniture Test & Target; Ion Interactive; Vertster; and others.

We at WiderFunnel work with clients using different tools and, as a technology-agnostic firm, are free and unbiased to recommend the right testing tool to the right client at the right stage of their company’s adoption of conversion optimization as a strategy.

At the end of the day, conversion optimization success is never about the testing tool: there are already many excellent tools available.

• “I think this is still the most under-utilized and highest ROI activities in the marketing department, but more awareness is on its way.”

Rand, on this one you are right.

When we first started WiderFunnel, we would spend a lot of time explaining what testing is all about, trying to cause an “Aha! Moment” where prospects would suddenly (well, after a one hour presentation) “discover” that it was dramatically cheaper and far less risky to run conversion optimization tests than to keep throwing marketing dollars at Search campaigns.

Things have changed.

We now get a steady stream of well-educated prospective clients who contact us knowing what conversion optimization is all about and asking how we work with clients.

Most importantly, we now get a very high percentage of prospective clients who have already dabbled at testing themselves (both with free and with paid testing tools) and have realized that conversion optimization isn’t just “one more thing” their in-house staff can do: they know they need experts to deliver a sustainable and scalable testing strategy for them if they are to optimize the complete site and stay ahead of the competition.

• “CRO isn’t just about testing; it’s about building a process for improving conversion over time.”

Rand, again, this one is bull’s eye!

After two and half years of running tests for clients, we have learned that conversion optimization success is NEVER about the testing tool they choose and ALWAYS about two factors:

1. The right test hypotheses (or “knowing what to test”)

2. The right (and scalable) process (as in “Can you execute properly in the areas of web analytics; conversion optimization strategy; test design; variable content placement; wireframing; graphic design; copy and modifications; layouts and mock-ups; technical installation; HTML; real-time results analysis…?”).

WiderFunnel Marketing Optimization does all that for clients, consistently.

• “Online businesses can generate so much revenue from this, yet few invest.”

Rand, again you are right here.

So many marketers still look for the silver bullet: that shiny new idea that pleases their eye and their ego and which can be done with relatively little work.

However, current economic conditions, where the CFO continues to cut the marketing budget and demands marketing actually increase its productivity and deliver even higher ROI, is changing all this.

And it is changing on a daily basis: we are seeing not only greater investment in conversion optimization but a greater realization on the part of marketers that this is a business-model changer for their companies, here to stay.

• “I think 2010 is the year, simply because it’s an inflection point for companies to assess their spend and where they derive value.”

Amen to that!

But wait! eCommerce sales were not down by as much as overall retail sales.

ComScore’s end-of-season online sales figures put the tally at $25.5 billion, down “only” 3% from a year ago. And MasterCard Advisors’ report says overall ecommerce sales ended the season with a decline of “only” 2.3% (the emphasis is mine).

But wait! Unique visitors to eCommerce sites were actually up.

According to ComScore, while e-commerce sales were down, unique visitors to retail websites during the holiday shopping season were actually up 5%

Yes, more people than in past years were actually shopping online; it’s just that they were not generating as many transactions or spending as much.

It occurs to me that there is an opportunity here:

The hardest and most expensive part is getting web visitors to come to your site. Once they are there, the opportunity to test different merchandising (ie. web page design) options; different checkout procedures; different offers; etc is there just like it is in stores, where retailers routinely test different merchandising options as well as signage to determine how to move more merchandise.

So you need to be ready.

Analysts agree the outlook for early 2009 is worse. Piper Jaffray & Co. analysts estimated that online sales will drop 10% next year as consumers “significantly rein in discretionary spending and save more of their income to rebuild wealth and savings in the coming quarters.”

On a more positive note, S&P analysts predict that sharp cutbacks in retail inventory in 2009 may strengthen retailers’ margins, even amid weak sales.

In this environment, eCommerce retailers must push all the buttons and pull all the levers available to them, and testing the way their web pages convert ranks high in terms of ease of execution and low in terms of cost. Worth a try, I’d say.