Category Archives: Conversion

The inside view of conversion optimisation

Have you ever wondered what conversion optimisation people do? Is conversion optimisation all about AB-testing? Does conversion optimisation really yield bottom line results? These are some of the questions I get from people interested in the topic. In this post I will give you some insight on my work as a conversion optimisation manager for a medium sized organisation. I will try to show you how conversion optimisation is a very broad field and that you are required to get extensive knowledge from all parts of your online business.

Building a rocket

Let us start with the major misconception that conversion optimisation is just AB-testing. AB-testing is a large part of it but it is just a methodology to gain insights. It is like if you were building a space machine. You want to know which engine is the most effective. You test your various engines. You gain some knowledge on which engine is the most effective and then you fine tune it further. This is what AB-testing process is and it might sound pretty straight forward. The problem is to gain the knowledge to build the right type of engines to test. That knowledge is hard to get and will demand hard work from many different experts.

Website optimisation is almost like rocket science

When you have your engines you also need to consider the design of the rocket. How does the engines fit in the rocket? How should the shell of the rocket be designed? How much workload can it handle? What is the optimal design of the cargo bay? I would say that online conversion optimisation is almost equally complex. You have the users, you have segments of users, you have your organisation structure, you have the knowledge level of your key co-workers, you have the sophistication of your tools, you have the strategically and tactical layers and many other things. All these factors ads to the complexity level of the optimisation work.

Two years of conversion optimisation

As I have progressed through the various organisations and their maturity phase I have come to realize that online success depends on many factors and that you continuously have to work on them or you will loose your competitive advantage.

The below figure illustrates some of the highlights of my work at PostkodLotteriet during a two year period. I created this illustration to give you an illustration of what type of work a conversion optimisation specialist does. Click on the image for a larger picture.

Conversion Optimisation Work

My journey started two years ago. Our first focus was to get clean data from our web analytics tool. We needed to capture the metrics that were driving the business. I view the web analytics data as my prime tool for conversion input. You need to be able understand what the data tells you and then react.

We moved on to start optimize our most important sales channels, email and ad words. In the same time we looked to create a high converting landing page. One of the important factors was to create a page where we could more or less copy every time we had a new campaign. This saved us many work hours and has effective our work tremendously.

Having a good landing page made a huge difference in our conversion rate.  The optimisation of our emails continued for a long time. In the end we had found the right expressions, the right amount of text, the right form and the right headings. When we felt that further optimisation would only lead to incremental gains we stopped optimising. The process of sending out emails is now extremely effective. We have built the competence among us so the email process demands minimal of resources.

During the email optimisation we needed to dig more into the user behaviour. The web analytics data gets you far but deeper user data about your customer is a must. The business intelligence department was under construction and data was slowly sipping down to our fingertips, which gave us further insight on the user behaviour.

After a year

With the start of my second year at PostkodLotteriet a decision was made to redesign the site and add more products. While we were feeding knowledge to redesign consultants we kept optimizing further. We tried everything from external links on our landing page, the effect of a video, the effect of trust logos in the buying process, testing of payment options and many other things.

Releasing the new website changed the user behaviour. Most redesigns lead to a drop in conversion, but not ours. We hade built the sale structure in a way that the conversion rate was not affected. Further we placed a strategic function behind a log-in, which allowed us to identify the user. Information like this will in the near future be used to personalize our content.

With a new site and changed user behaviour my work has more or less started again from the scratch. I have analysed and put forward a conversion plan on how to optimize our website and equally as important how we work with the website. The additional products have added another complexity level and everything has to be reconsidered.

What you do not see

What is not shown in the illustration is what is happening behind the curtains so to speak. The hour’s put into analysis is substantial. You constantly need to monitor the data and depending on your activities you have to assure the right data is collected. Further you need to raise the competence level of everyone around you. After all your success is a direct correlation of your team member’s competence level.

Another aspect that is not discussed so much in the online forums is how much more effective your organisation becomes. This equals to huge savings in time and money. I have mentioned a few examples so far but we also have the direct effect on the marketing budget. We know which sources are profitable so we have saved a lot of money by placing our money on what works.

Is conversion optimisation profitable

The short answer is yes. I have seen though examples where a single test yield a conversion increase but when implemented on the site the conversion is not affected much. This is of course do to several factors but in the end of the year you should look at your bottom line. During the two years I have worked we have exceeded the sales targets every year. In the process we spend less money to get there.

Now the trick is…and this probably my most important advice…to see conversion optimisation work as a cross function within the organisation. Conversion optimisation needs to be on everyone’s mind. The organisation has to put emphasis around it, build the structures, ensure the knowledge is being used and transferred and be in it for the long run.

In short. Conversion optimisation is so much more than just AB-testing. If you want to become a cutting edge online department you have to put conversion optimisation in the heart of your organisation.

What does it take to become an online millionaire

What does it take to become an online millionaire?
What does it take to become an online millionaire?

Let us start a website and become millionaires!

That is the opening line of a conversation I have had a hundred times.  Although I think it is the wrong approach to become a sustainable online business I want to discuss the issue from a perspective of what type of skills one need to reach that point.

First of all let us set the tone right. To succeed in online business is hard! Looking at the end result one might think it is easy but it is not. When I show my parents different websites and discuss their success I usually get the comment from that it is just pages with text and some sort of function. How hard could it be for anyone to do this?

It is hard to explain to them the knowledge and hours put into the website. After so many years they actually still do not truly understand what I do for a living. The easiest way to give them a picture on how complex things are is to consider pure online companies which employ hundreds or thousand of employees working on just one single website.

Even for people within the business who dream of becoming the next online sensation many underestimate what it takes to get there. If you truly want to be long term in your online investment you need several different skill sets. I thought I would list these to show the complexity of the issue. Here is my list of skills you need.

  1. Programmers, fronted and backend. Without programmers you are not going anywhere. It very common that programmers with an idea start successful online businesses. When they get to a certain point though their need the skills are not enough. Look at Google, both Sergei Brin and Larry Page were brilliant minds, but to grow their company they needed many other skillsets.
  2. Conversion people with web analytics skills. Of course these people are your most valuable (biased as I am) since they will help you increase your bottom line revenues. Read my post about this role here.
  3. SEO people with PPC skills. Getting “free” traffic through search engines, paid and unpaid, is usually the most profitable traffic. High converting and cheap. You need though to be on top of things because the search engines do changes all the time.
  4. Social media care takers. Social media might transform but it is not going away. It is already a very important channel for many businesses and it also strongly influate with your SEO strategy.
  5. Mobile strategy project managers that can drive your mobile strategy. The web is morphing into mobile usage and it will sooner or later impact every online business.
  6. Marketing people that take care or your affiliate network, banner investment and other marketing initiative such as competitions.
  7. Editors. Someone has to write your content, and your content sets the tone of your website and your traffic driving initiatives.
  8. Project managers that are both technical and with business skills. When you grow you will get to a point where you have departments of people and someone has to coordinate the marketing with the technological development.
  9. BI/analytics people that give you the knowledge of what users do and who are your most profitable customers are. Depending on your business model you need to know certain things about your customers.
  10. Visionary leader. All the above skills will execute the strategy the leader has set. Of course the vision can come out of a group of people but when the company grows someone has to be in charge. It is certain that you will get through highs and lows and the lows are the hard part. This is where a visionary leader that can inspire comes into place.

As you can see the number of skill set are at least ten. I might have forgotten some but starting and driving a successful online business is harder than most people think. Depending on which phase your company is you will be required to add more and more skills. This is why many companies sooner or later will demand capital to grow just like Google or Facebook. Of course I am not saying you need all these roles from the very beginning but sooner or later you will get to point where if you want to work professionally you need to add skill sets.

Hopefully you understand that becoming an online millionaire is not that easy, not that I think anyone has any illusions but when you see something on black and white it can become food for thought.

What do you think, do you agree with me or not? What is your experience with this topic?

Our online challenges for 2013

New year brings new exciting challenges. I have been lucky enough to spend some time off work and catch up with my reading on the online sphere. Based on my personal experience and what other people are writing I will contemplate a few moments on the various online channels. These channels affect our revenues big time and keeping a close eye on them is critical.

Mobile

Mobile area is super hot! During 2012 it literarily exploded reaching a critical match of people having smartphones with decent online connections. I definitely think that the operating system will become even more important and Google does some really interesting stuff lately. They are truly focusing on making your phone be your best friend giving you real time information based on what you do. This will open new markets and companies focusing just on the mobile. The problem with mobile is that the user behaviour is changing fundamentally. Small screens are hampering online business but also create new opportunities. Most online business needs to figure out how to handle this channel. The good news is that the channel is still evolving and not many have cracked the code yet, which is also true for our business. I need to figure this channel out. How can we capitalise on this? What works, what doesn’t?

TV

TV is the last resort. Smart TVs have not done it yet and content will be the king once it gets started. If Apple or Google manages to something here they might revolutionize the whole industry and open for a new way for digital managers to capitalize on yet another channel. As someone said the fun in creating ads will return since creativity will be central in the creation process. I think it will take a while until we see TV as a direct sales channel. We are currently doing a lot of advertising and programs on traditional TV and I think that this will benefit our sales positively but it will of course take a while.

Social Media

Figuring out how to sell on social media will continue. The area is still in its infancy. When it comes to our efforts we cracked the code just before Christmas. Now Facebook is our second most profitable sales channel. A few months ago it was non-existent. Like many others I think social media holds incredible potential but each business needs to find its own social dna.

Adwords

AdWords will hold its importance as one of the most profitable online channels. As a digital marketer you need to figure out how mobile will affect your adwords volumes and find a strategy to counteract the development.  For us the challenge will be to expand our adwords channel and my aim is to double it within the next six months.

Banner Marketing

I think that banner marketing will continue loosing its appeal as more and more people figure out that it does not work for direct sales. The argument for brand building is there but you need to be in it for the long run and combine all your channels until you reach the critical brand status. Banners are also moving towards the behavioural retargeting, but the waters are still muddy. Making this channel profitable will be a challenge and I personally think that this area is nothing for us.

Affiliate Marketing

Affiliate marketing is an important area. Depending how you define your affiliate program and in what area of business you are active within the changes can be small or huge. Some affiliate marketing will continue to survive while others will struggle especially the ones that are dependent on Google. We are currently setting up an affiliate program and I hope it will generate at least 10% of our total revenue.

SEO

SEO is a critical part of any business and will keep to be but it is also a declining expertise since the changes in the search engine algorithm is hitting junk sites extremely hard. For our part it is interesting to notice that the SEO area has not had any importance in our business. The brand is so strong that 95% of our traffic is branded keywords.

Positioning Services

Position services are still in its infancy. For companies in general to make money from this service will depend entirely what the phone software will allow and of course the regulation involved towards this type of marketing. I think the business case is still weak to consider at least for us.

The Integration of Channels

Google is the dominant force within digital marketing and I expect them to continue to push the integration of adwords, banners, retargeting, affiliate, social media, mobile and offline marketing. Since the mobile development are a strong threat to their revenue stream, they will push hard reposition them towards the coming mobility society. For us I think that the tighter integration between the channels will be the key to build a sustainable online presence. We just need to figure out how to loop the traffic between the various channels and make them convert.

Well that is my five cents for the coming year. What do you thing will be your challenge for 2013?

How to build a world class online conversion department

Any smart online company should have one. I am talking about a conversion department. Unfortunately not many companies have realized the potential in optimizing the online traffic. The few companies that do i.e. Amazon or Expedia have a rumour to have the highest conversion rates within their field. These companies understand the potential of working systematically with optimisation since even small changes can yield great results. I am a first-hand witness that simple actions can yield a double-digit conversion increase.

Why you should have a conversion department

Successful online companies have analytics built in into their DNA but that is not enough. Analytics data is useless if you don’t use it to increase your revenue. Many companies have more data than they can handle but have a hard time leveraging this data into revenues. This is where a conversion department will come in hand.

The aim with a conversion department

The main task of a conversion department should of course be to increase your online conversion and hence your revenues but it should also make your organisation smarter by leading the optimisation of all your digital channels.

Further a conversion department should centralize all conversion knowledge, gather it in one place to ensure that the knowledge does not disappear when people leave the organisation. If you are a large organisation with offices all over the world it should also have the aim to overview the optimisation process save time by avoiding that the same mistakes are being done over and over again.

The conversion department together with the analytics department should also be the cure to the HIPPO (Highest Paid Persons Opinion) sickness many companies have. The HIPPO sickness is when decisions are based on emotions rather than facts. This will create a culture based on facts not guessing.

What a conversion department does

Many think that a conversion department just do AB testing. AB testing is a very important part of the tools conversion people at their hand but it is just a small part of the benefits your organisation can have. Here are some other benefits:

  • The conversion department bridges the gap between, design, analytics, marketing and technology. They give your analytics guys the understanding of what needs to be focused on and they give your marketing people the knowledge of what works and how to invest their money in a smart way. Further you designers will start thinking conversion, which will increase the quality in their output.
  • Your organisation is most likely already measuring everything. You have brilliant people getting you all data you need. You have more data than you can handle but you have hard time capitalizing on this data.
  • People working with analytics are good with numbers but not with online sales. Online sales are much more than just understanding numbers therefore you need people understanding the dynamic of how to sell online.
  • With marketing people it is the opposite, they might be good in sales ideas but they lack the discipline of numbers. Many times they also want to ignore numbers and to be able to some “branding”. Brilliant sales people understand the psychology involved in selling especially when you sell to consumers but still need the support of conversion professionals.

The building blocks

Building a successful conversion department demands more or less the same components as any other department you will build. Money, passionate people, structure and key competence.

  • First of all you need passionate people. People that love the online world, people who are prepared to be persistent creating your cutting edge conversion department.
  • You will also need people with analytics skills.  Since you will do a lot of ab-testing you need to understand what to test, which demands knowledge in web analytics.
  • Tools are a key part of any online business. Online conversion is no exception. Fortunately the tools now days are rather cheap so you can get really good tools for a fair amount of dollars. Usually it is not getting the tools that are the problem but rather learning how to use them that are the crucial part.
  • Without a budget your conversion department will be limping. You need to allocate enough resources so you will be able to have a cutting edge department. Today companies allocate 99% on traffic driving and only 1% on optimizing this traffic, which is of course ridiculous. Getting the traffic is more expensive than squeezing the conversion juice out of it.
  • Since the department will be doing a lot of cutting edge conversion work you need people that can convey the results in an inspiring way. Good presentation skills are a must and keeping a good documentation of all the knowledge you will generate is another important factor.
  • Keep in mind that before you build your conversion department you need to have clean analytics data. Your data must be correctly implemented data and if you have a BI department don’t hesitate to take their help.

To think of

As a final word when working with important projects like this you need to consider that there are many stakeholders within a company and you need some political sensitivity, of course without giving up your conviction that facts speak louder than words. Also you need to be prepared to be in for the long run. Transforming towards a conversion culture takes time but worth it many times over. You want to be a cutting edge online company, don’t you?

The secret conversion formula that will boost your online sales

There is a tightly guarded secrete in the online world. I am talking about the online sales formula. With this formula you can reach a double-digit conversion increase everyone talks about.

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.

  1. 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%.
  2. 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.
  3. 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.
  4. 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.
  5. 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%.
  6. 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.

Online checkout – a conversion killer

Have you heard the story about the 300 million dollar button. Just by adding a button in the checkout process wher you did not havet o register to buy gave an online stor a boost of 300 million usd. Simply amazing how a small change can affect your online salse by so much.

When beginning your optimisation work always start backwards, meaning start with your checkout process first. This video from Google is a fantastic example on how many factors can kill your online sales. It is very funny!