Real Optimization is About Profit, Not Percentages
Last week, I challenged the conventional wisdom around conversion rate optimization...
Last week, I challenged the conventional wisdom around conversion rate optimization. If you missed it, the key takeaway was simple: your CVR alone can be deeply misleading without the context of total conversions and revenue.
Today, I want to build on that foundation with a critical insight that separates elite growth marketers from the merely good ones.
The Hidden Cost of "Successful" CRO
Let me share a deceptively common scenario I've witnessed repeatedly:
An e-commerce site decides to remove shipping costs completely, and initial conversion rates soar by 35%. The marketing team is lauded for their insight. The change is considered an unqualified success.
Sounds like a clear win, right? On the surface, they've removed a major point of friction—nobody likes surprise fees at checkout.
But three months later, the finance team flags a concerning trend. While more people are converting, the average order value (AOV) has dropped sharply, and fulfillment costs have increased dramatically.
The unintended consequence? A behavioral shift: customers began placing smaller, more frequent orders instead of consolidating purchases. Without evaluating AOV and revenue per user alongside CVR, the company missed that their profit margins were being quietly eroded.
The higher CVR was a dangerous distraction—it felt like growth, but it wasn't sustainable growth.
The Metrics That Actually Matter
When evaluating any optimization, smart marketers monitor these metrics as a cohesive system:
Total conversions
Revenue per user
Customer Acquisition Cost (CAC)
Customer Lifetime Value (CLTV)
Profit margin per transaction
Any CVR improvement that degrades these metrics is not an improvement at all—it's a setback disguised as progress.
Case Study: The Mandatory Demo Trap
A B2B SaaS startup was struggling with lead quality. Their solution? Introduce mandatory product demos for all signups, reasoning that this would filter for serious buyers.
Initially, the plan appeared brilliant—their conversion-to-paid rate climbed dramatically. The sales team was thrilled with the higher quality conversations.
Yet overall revenue growth mysteriously plateaued. Why? We discovered that many potential users—particularly from SMBs with legitimate buying intent—were abandoning the funnel at the demo step. These were qualified buyers who simply preferred a self-serve experience.
By reverting to optional demos (while keeping them prominently featured), total revenue and new customer acquisition improved by 28% quarter-over-quarter.
The lesson? The sales team's definition of "quality" had unintentionally excluded an entire segment of profitable customers. The high conversion rate was masking a substantial opportunity cost.
A Better Way to Think About Conversion
These examples may seem contradictory at first—one penalizing high CVR with too little traffic, the other with too much low-quality traffic. But both highlight the same underlying truth: conversion rate alone doesn't tell you whether you're winning.
It's not just about how many users convert—it's about which users convert and why.
The goal of CRO isn't simply to get more people through the door. It's to get the right people through at the right moment. This shift in thinking transforms conversion optimization from a tactical exercise into a strategic discipline.
From Metric Chasing to Business Building
Here's how to implement this thinking in your work:
Define "successful conversion" in business terms, not just funnel completion
What's the profit profile of an ideal customer?
Which behaviors predict long-term retention?
Implement attribution that goes beyond the initial conversion
Track how optimization changes affect 30/60/90-day customer value
Segment performance data by acquisition source and customer profile
Test for quality, not just quantity
Introduce deliberate experiments that might lower CVR but improve customer quality
Create hypothesis frameworks that acknowledge potential trade-offs
In next week's newsletter: I'll share a detailed breakdown of how different traffic sources carry different levels of intent—and how this should fundamentally change your approach to conversion optimization for each channel.
Until then,
Atticus
Found this perspective valuable? Share it with a colleague who's chasing metrics without measuring the business impact.
P.S. What's one optimization "success" that later revealed itself to be problematic for your business? Reply to this email—I read every response and often feature reader insights in future editions.