Trying to search for “online sales formula” will generate slim results. Fortunately I have been working with the formula for years and I am prepared to “reveal” it. The first time I got in contact with it was a few years ago. I had changed workplace and my new colleagues told me about this course they had went on where they had learned how to use this new and fresh conversion formula. We applied it to our optimization work and it generated great results. Eventually our designers, various stakeholders, editors and others started to apply their work with the thinking of the conversion optimisation formula.
The revised conversion formula
Fast forward to present days, I have moved on and applied my knowledge on my new work. Working with a different business model I have noticed that the conversion formula has two flaws. Or more correctly it is missing two big factors that can affect your conversion rates substantially. Those two factors are the brand value and the social media effect.
Now let us look at the revised online conversion formula and its different parts.
Conversion = (4M + 2B) + 3V + 2(I-F) + 1S – 2A
- M = Motivation. What is the motivation of the user? Where in the buying process is he? Is he the instant decision type or is he more on research mode?
- New! B = Brand. Well know brands have a higher conversion. This has a lot to do with trust, since brands communicate value, security, credibility etc.
- V = Value proposition. How high is the value of your offering? Manipulate this and you will affect your conversion rate greatly.
- I = Incentive to buy. This could be different type such as limited time only.
- F = Friction. What type of friction does for example your landing page have? Conflicting messages? Vital information that is missing to take a decision?
- New! S = Social media, how much is your brand talked about. There are some really successful cases where you can use social media to sell directly or indirectly. Notice that if you can also have a negative social media buzz which will lower your conversion rate.
- A = Anxiety. What will you do with my credit card details?
I am not going to explain in detail how to use this formula, but you need to do some hands on work in a step-by-step manner. You need to do a lot of ab-testing focusing on various parts of your channels, your message, your landing page and your marketing mix. Eventually this will reveal how big the various factors are for your business. When you have reached this stage you will be able to manipulate these factors and maximize your bottom line revenue.
The optimisation results
At my current work I we have been working especially with the value proposition (V). By manipulating this value we have managed to increase our conversion rate up to 300%.
Based on the formula let me share some success cases I have worked on.
- V = messing with the value we offered increased our conversion by 300%. When increasing the amount of a voucher offered together with a purchase from 300 to 500 sek we saw and increase in the sales by +110%. When increasing this amount to 1000 sek we managed to increase the conversion by +300%.
- B = doing a lot of TV and print commercial allows us to sell more with less hustle. For example we can see a direct correlation of our online sales and the print send-out. The days the print lands in the mailboxes we double our sales. Also we have an extremely high volume of brand search, which brings in high quality traffic.
- M = targeting keywords that are close to the end of the buying process increased our conversion with up to +400% compared to long tail keywords.
- S = increasing our likes by +700% (from low levels though) generate direct revenues from this channel whenever we promote our offer. The offer is being promoted among our followers creating an exponential reach of potential customers.
- A = when displaying a secure shopping by VeriSign in the first page but not on the consecutive pages in the buying processes we increased conversion by +12%.
- F = we always remove the site navigation bar on the landing pages and this increases the conversion as much as 15%.
Optimizing the channels for the highest online sale conversion is a crucial part of any online business. I think this formula will give you the correct framework to create a systematic hands on approach to optimisation.
The formula also cuts through the clutter of factors many people claim have an effect on your conversion. If you manage to apply it correctly to your channels you will increase sales most likely by double digits. To be honest, getting there is harder than it sounds, you will need resources, a smart organisation, time, a bit of creativity, some knowledge and of course the blessing from top management.
If you have tried this formula do not hesitate to tell me your views in the comment fields below.