Smart Conversions: An Outsider’s Perspective

Posted on October 12, 2012 by Kyle

This is a guest post from Kyle Sanders, an eCommerce entrepreneur and co-founder of Complete Web Resources.

There is a ton of information available on the web about what you should test on your website. Conversion optimization experts have a litany of conflicting opinions regarding which elements are the most testworthy, as well as which ones you should continually be testing.

Like most business owners with an online store, I had little to no experience optimizing for conversion and started testing random elements based on suggestions from blog owners and experts I didn’t know. Button colors, trust symbols, and guarantees were on heavy rotation for several months but only yielded minor increases in sitewide conversion rate. Building out great product pages helped somewhat, but the increases were less than satisfying. Disappointed, my business partner and I began searching for other options. There were a few tools that streamlined the process and made it easier, but in the end, we were making design changes in a market with mature competition and a large number of brands with heavily enforced MAPs (minimum advertised price).

After much discussion, we knew we needed a way to test promotional pricing and other offers while maintaining the integrity of our website. There were free options and a few fly-out coupons and menus, but most offered minimal design control and provided no data other than number of times a coupon was used (which was already available via our cart software). Sure, it was data, but the time to process it and evaluate made it tedious. We needed a better overall solution.

Enter Spring Metrics

My partner found and suggested Smart Conversions from Spring Metrics. There was a 14-day trial, so we got started right away. What initially impressed me the most was how easy and useful the conversion data was; we didn’t need to be analysts to understand any of the data or reports. Everything was clean, understandable and allowed for quick decisions and iterative testing.

Using Smart Offers for Solid Conversion Lifts

In addition to the effortless conversion tracking, we implemented several different smart offers based on visitor data and time-on-site that doubled our conversion rate almost overnight.

Our most impressive Smart Offer is for visitors that have been browsing our store for more than 5 minutes; it converts at a whopping 22.63 percent. The offer is displayed in a completely controllable fly-out that you can customize to match the look and feel of your website (you can also use bold colors, if desired, to draw more attention to the offer). The beauty of Smart Offers is that they look and feel organic and can be easily dismissed if the visitor isn’t interested. View the offer below.

In addition to the above, we also offered “10 percent off” for orders over $50 for individuals who have either:

a) never visited our website before (this one converts at 2.59 percent)

b) who visited before and didn’t purchase anything (this one converts at a stronger 5.69 percent)

For the eCommerce space, all three offers outperform industry-standard conversion rates and have increased our average order value substantially. In addition to that, I’m confident Smart Offers will be the most effective way to deliver and test offers during the upcoming holiday season. For the cost, it’s an unbelievable value for any online business. I’m also confident that Smart Offers will prove the most efficient means of delivering and testing offers during the upcoming holiday season.

The Unexpected SEO Benefit

Through using Smart Offers in conjunction with Spring Metrics conversion tracking, we are able to get a quick, real-time breakdown of exactly how our customers were searching before arriving at our site—and more importantly, which search terms most frequently results in conversions on our site. The recent algorithmic updates rolled out by Google (namely Penguin) makes it increasingly important to maintain a highly diverse link profile.

After checking our incoming keywords and real-time conversions several times per week, our SEO strategy was revamped completely. Rather than optimize primarily for brand-related terms, we were able to create a highly diverse link profile based on the data from Spring Metrics, which has directly resulted in stable organic placements through the most recent Penguin data refresh (10/6/2012).

There are several ways to optimize for and track conversions, and everyone has an opinion about which works best. We chose Spring Metrics. It worked for us and we wouldn’t recommend anything else.

3 Out of 2 People Have Trouble With Fractions

Posted on August 23, 2012 by Peter

One of our awesome team members forwarded a Time Moneyland article, which itself was a take off from an article in The Economist, which in turn was based on a study published in the Journal of Marketing.The gist is that consumers routinely fail to do the math correctly on discounts. 33% more product for the same price is a decidedly worse deal than 33% off, but according to the study buyers reach for more product in most cases.

$fractions$

Statistically speaking, your site visitors are subject to this rule

As an online merchant, this information is highly valuable. In politics, they call it framing, and it’s critical to success. In retail, they’re calling is discount psychology. How you word your offers can make all the difference to the performance of your offer, and its impact on the bottom line. Spring Metrics Smart Conversions allows you to split-test your offers – just set up multiple offers to the same target segment and we’ll automatically divide the traffic and tell you which is performing better.

For instance, you may wish to encourage repeat customers to place larger orders. If you know they have a historical cart size of $50 but you’d like to get them up to $75, you can entice them to the higher level with a 10 percent discount offer and still pocket a $17.50 revenue increase.

This effect speaks to why Sam’s Club and Costco are so successful. Increased cart sizes for the same money. You may even hear your friends joking that they can’t get out of those stores without spending way more than they intended to spend. “I got two bazillion pot stickers for like $50!”

A more complicated example: your visitor/prospect is looking at a product page for a $40 item. You know that you’ve got a $60 item that is similar to what they’re looking at. So you make an offer to “buy this other [$60] item and we’ll give you an accessory for free” where your cost on accessory is less than the increased margin on the upsell. Your revenue went up, the overall cart margin went up, and you’ve got a customer now with a higher baseline purchase price at your store that you can re-market too in the future.

5 Ways to Be More Human in Business

Posted on July 31, 2012 by John Jantsch

One of the greatest things about technology is that it can make us more efficient, allow us to automate interactions, be on every corner and remain open twenty-four hours a day without the need for a human attendant.

thisisbossi via Flickr CC

And, it can wall us off from our customers and prevent us for building the kinds of relationships that help us get better at what we do, help us understand the true needs of our customers and help us build the kind of community that can sustain us through any ill wind.

When we get so good at delivering our customer interactions, devoid of any human interaction, we start to build the same kinds of relationship we might have with a vending machine.

Sure, it gets the job done, delivers as promised, is efficient and maybe even convenient, but does it know us, like us, trust us?

Over reliance on technology is a trap that’s easily set these days and one that can quickly put you out of touch with a market and certainly out of touch with the real reason for doing any of this – to serve a higher human purpose.

Below are five practices that can help keep you out of the vending machine trap.

Get out of the office

This one’s pretty obvious, but how many times do you go through an entire day without talking to anyone? Make an effort to get out and go talk to your customers, schedule a lunch a week with a potential strategic partner, mentor someone just getting started in business or conduct interviews with others in your industry.

Make referrals

This one is powerful on many levels. Get in the habit of making introductions and referrals. Support your customers, partners and suppliers through this habit and you’ll find some of richest personal interactions you can ever enjoy in business.

Create peer-2-peer interaction

Chances are your customers share some of the same challenges, wins and needs. Consider putting together quarterly forums where your customers can get together and share best practices, industry trends, unmet needs and success stories. You’ll quickly find that they crave this kind of interaction with peers and you’ll have your finger on the pulse of exactly what’s going on right now.

Conduct results reviews

One of the best reasons to reach out to customers is to ensure they actually got the results you promised. In many cases, they did, but this is great way to reinforce just what a great job you did. In some cases, something may have slipped, they may not have understood how to get a result or they just didn’t do what you told them to do. No matter what, this is a great way to find and fix a problem.

Results reviews are also a great way for you to better understand the value of what you deliver and can be a great way to document the tangible proof that gives you the confidence to raise your prices.

No reason at all

Write five handwritten notes a week. Jump on LinkedIn and say hi for no reason. Call five clients today just to make sure everything is well in their world. You don’t always need to be closing. Sometimes just thinking about someone and telling them so is the most human thing of all.

Courtesy of John Jantsch, Duct Tape Marketing. Republished with permission.

Speed Dating and an Evening of Marriage Proposals

Posted on June 28, 2012 by Tim_Huntley

Let me set the scene: It’s 8pm on a Thursday evening and you make your way to a row of tables set up at the back of a local bar. After plunking down three $20 bills, you grab a name tag and take a seat. Over the next 90 minutes you will go on 30 “dates,” each lasting three minutes each.

For some of your “competitors,” the goal is simply to meet someone interesting and schedule a more meaningful second date – but for you, you have a plan and a purpose: to leave the bar with a new fiancé. I mean, a 3% conversion rate seems possible right, and with a cost-per-date of $2, you can definitely afford to cast your net wide.

Can you say “reeks of desperation?” Seriously do you think anyone would try and find a marriage partner this way? And if they did, do you think they would be happy with the result?

So tell me this – Why do so many businesses use EXACTLY the same method, the “I know we just met, but I’d like to get in your pants, err I mean I like to have your credit card number please?”

A Better Approach

As I was thinking about this article, I came across an excellent post from Lee Odden called Is a Rush to Revenue Hurting Your Marketing Innovation & Domination? I especially like the diagram that Lee put together (shown below) which outlines a solid approach to customer acquisition.

Does this mean that each of these steps is a necessary checkmark before moving along to the next? Absolutely not; however it does suggest that there is a process of earning trust before a business should think about a selling proposition.

John Jantsch (a frequent contributor to the Spring Metrics Blog) seems to be singing from a similar hymnal when he talks about “The Marketing Hourglass” in his new, free eBook called “How to Build a Remarkable Business by Focusing on the Total Customer Experience.” In the book, John outlines a process of Know, Like, Trust, Try, Buy, Repeat, and Refer.

If you are selling cheap widgets, the speed dating approach might be right for you. But if your business has a higher value proposition, be patient and appropriate with each individual prospect.

The Power of Audience Segmentation

Posted on May 15, 2012 by Peter

Its a story as old as humankind: specialization. As a species, we’ve been becoming increasingly specialized for about 10,000 years since the advent of agriculture, which allowed us to remain in one place for longer.

A decade or so in to the e-commerce evolution, we’re now seeing an increased focus on delivering specialized content to your audience segments. This great post today from HubSpot focuses on the value of segmentation in email marketing (which Durham startup Windsor Circle is leading). Clearly, targeting contacts for whom you have preference information with content suited to them will have higher conversion rates, and less opt-out responses or other brand-diminishing results. And everybody knows “email converts,” which makes sense when you consider that by the time you have somebody’s email address you already know a thing or two about them.

Segmentation also applies to PPC campaigns – when you set up the campaign, you’re segmenting the target audiences and channeling them to segment-specific messaging on a relevant landing page.

In the brave new world of content, as pointed out in the HubSpot post, segmenting the audiences is only valuable if you have something differentiated to say to each segment. The great side effect of this forced behavior is that it requires you to think about who your customers are and what their need is.

Developing on that, and taking the concept further up the conversion funnel, the most effective way to widen your sales funnel is to take your Audience Segmentation existing site traffic and say something meaningful to them from the very first moment. But how do you say something meaningful to somebody you’ve never “met?” Well, you observe their behavior and find out what you can about them before you speak. “Those are nice boots. Are you from Texas?”

As an online merchant, such hail-Mary potshots aren’t necessary because by the time somebody is on your site, you already know a few audience segmentation facts about them such as where they came from, where they are geographically located, whether they’re on a mobile device, whether they have visited before… And with those simple facts, you can start a conversation that will lead to a conversion.

Social Media Campaigns: Valuing Tweets and Likes

Posted on May 2, 2012 by Peter

Social media campaigns are one of the hottest ways for companies to promote their products and services to potential customers. It is becoming the hallmark of many branding efforts. Everyone agrees that social media marketing is important.

But, what nobody is sure about is exactly how important it is, and what parts of a social media campaign deliver the most value. Data is beginning to emerge, but there has yet to be any consensus as to the real value of a tweet, a Facebook “like” or a Facebook “share.”

The problem is the methodologies being used to determine the value of a social media connection. Companies are looking at the value for their own business – but each business is different. For example, if your company is selling toys that cost $2.99 each, the value of a like or retweet that results in a purchase will be lower than if you are selling $75,000 sports cars.

There has yet to be any data that is valuable across various industries. And, it would seem that the ROI in a given social media campaign is still something that has yet to be quantified over the retail market as a whole.

For example – imagine a gas station that simply puts up a sign telling people to follow them on Twitter or Facebook. This costs them nearly nothing. If they sell two tanks of gas from that effort, they have made a profit. Now, imagine that a car company spends $10,000 on Facebook ads to direct people to like their Facebook page. Which company is going to get the better ROI? This has yet to be studied.

In addition, the methodologies used to generate data are focused on the primary marketing goal – making an immediate sale. But every retailer really has three goals from a social media campaign. The top priority is making a sale, the secondary priority is getting contact information, and the third priority is to at least get a like or a follower so that you can use future marketing efforts to accomplish one of the first two priorities. Until data has been analyzed showing how social media affects all three of these goals, then the data is not giving companies a complete picture.

At Spring Metrics, we are gathering our own data to measure the effectiveness of tweets, likes and Facebook shares over the next couple of months. Our goal will be to demonstrate exactly what kind of return on investment companies can expect from different social media actions – and how to measure the effectiveness of different campaigns.

We are doing this because we believe that social media is an incredibly valuable marketing tool. After all, since the beginning of time nearly all commerce has been social in one way or another. Long before the existence of social media or even the Internet, people have been much more likely to purchase products that were popular or liked by their friends.

Social media therefore simply streamlines the ever-present social aspect of commerce – meaning that its effects will not be a fad. It is here to stay, and must be understood.

When our results are completed, we will share them on this blog. In the meantime, we thought it would be helpful to talk about some of the data that is out there so that companies have a baseline to work with when thinking about social media campaigns.

The ticket sales company Eventbrite did their own internal study on the value they got from people sharing links to their events on both Facebook and Twitter. What they found was that each Facebook “share” resulted in $2.52 in ticket sales. That was a far better result than the 43 cents worth of ticket sales that were generated for each retweet on Twitter. However, that gap is closing, very interesting data here.

There are a few thoughts out there as to why this may be the case. People who share an event on Facebook are more likely to be actually going to the event which makes it more likely that their friends will want to but tickets to go with them. People on Twitter, on the other hand, are less personally involved with the people they “follow” and less likely to know the person in the real world. This means that a retweet is less likely to spur a ticket sale.

This study is, of course, very specific to the event industry. It is highly probable that companies in other industries would see different overall results.

A similar study of their own metrics was recently released by ChompOn – an online coupon company that competes with Groupon. Their study also showed that Facebook shares seem to have more value than retweets but at a much larger scale. There are infographics from the study, but a more complete look is here.

ChompOn said their data showed that a Facebook share had a value of $14 while a retweet only had a value of $5. Their metrics went further than Eventbrite. They determined that the value of a Facebook “like” is roughly $8 and a Twitter “follow” is roughly $2. I wonder if that gap is closing since the study as well?

Keep your eye on this space while we continue to examine this emerging science. We are dedicated to helping our customers get the most out of their social media efforts, and will have the data companies need to make the best decisions about where to concentrate their campaigns.

Improve Page Load Times and Improve Conversion Rates

Posted on April 26, 2012 by Tim_Huntley

I hope everyone is having a great week – me, I spent the past couple of days working on my website to dramatically improve page load times.

Why? Because when people come to a website and it takes more than a few seconds to load, they leave. And just like Peter said in his post last week, this is a huge waste of your marketing dollars. Don’t make the supreme effort to get someone to your site only to have them leave because it was unnecessarily slow.

Take a peek at this chart from KISSmetrics (click here for the entire infographic):

As you can see, slow load times lead to cart abandonment and low conversion rates.

What I Did to Improve Page Load Times

My website at My Athletic Life is set up using WordPress ; however if you are using a different environment, the concepts will still apply.

A few weeks ago I decided that it was time to deal with a high bounce rate on my site. I thought the problem was a result of a cheap hosting solution, so I decided to shell out a few more dollars and improve the database portion of my site. Performance was better, but not to the degree I expected.

To help with my analysis, I found a free tool called WebPageTest which loads a specific page and maps out where time is being spent. As an example, this page had been loading in a tortouise-like pace of about 8 seconds. However, by making a few tweaks and without spending additional money to upgrade my hosting, the average load time is now about 3.5 seconds. And this is for the first time the page loads. Subsequent loading of the page by the same user now takes under 2 seconds!

Here are the changes I made:

1) I installed a WordPress plugin called W3 Total Cache – by turning on the Page and Browser caching features, I made it much more likely that subsequent visits by the same user would be faster.

2) The W3 plugin also helped to speed things up by compressing much of the information that is sent between webserver and browser. I did have to make an easy configuration change to my webserver (enabling mod_deflate in apache), but this single change resulted in about 50% of the performance improvement.

3) Next I set up another plugin called Better WP Minify – This plugin was able to take a bunch of individual javascript and css files that needed to be loaded for a page and turned them into a single file. So rather than making 20 requests back and forth between browser and server, it now takes a single request.

4) I also installed a plugin called WP Smush.it to compress all of the image files on my site. I would estimate that this reduced the average file size for each image by about 45%. Huge savings.

5) Lastly, I de-cluttered my sidebar. Over the past few months, I had added a few images and features to the sidebar that didn’t add a lot of value and were slow to load. Goodbye.

I may look at some additional improvements like adding a Content Delivery Network (CDN); however it looks like I have already gotten a huge benefit from just a few hours of effort.

Let me know if you have other ideas about low cost ways to improve website performance.

97% of Your Marketing Budget is Wasted

Posted on April 19, 2012 by Peter

If you’re like most online merchants, you’ve got an SEO program and PPC campaigns running, maybe some banner ads and perhaps even some affiliate marketing. And you’ve been tweaking and tuning this for months, quarters, and years. And still you’ve got a 3% conversion rate. Maybe a little higher, maybe a little lower.

There are many ways to increase your site traffic, and even to bring people back. And a whole industry around cart abandonment (the act of trying to bring back a customer who has decided not to purchase, and trying to get them to change their mind somehow). But at the end of the day, 97% of site traffic leaves without converting.

Seems to many that having spent an enormous amount of time and energy and money driving the traffic to your site, making the most of the current state of technology ability to understand your visitors behavior in real time is a good investment. There’s a growing set of practices around understanding your visitors better, and converting them to customers, leads, or fans/followers.

If your conversion rate is an average of 2.4%, raising that to 2.7% is actually a 12.5% increase in conversions. Getting a little more detailed, lets say your 2.4% average conversion rate is made up of several different channels. Some have a high number of conversions, but at a lower revenue per conversion. Some have a low number of conversions, but a higher cart size. If you can determine the behavior of the low volume / large cart customers, you can positively impact their likelihood to purchase real time on your site by saying things to the right people at the right time. Similarly, if you could use behavioral targeting to focus specific messages on the lower revenue / higher volume customers, say by incentivizing them to increase their cart size at checkout next time they visit, then good things will happen.

There are lots of tools in your toolbox. Like building a store on main street, the first things you need are big, heavy tools: trucks to bring materials, saws and 2x4s and hammers, etc. No store, no customers. Same in e-commerce: you need a store, and you need to drive traffic to it. The big tools here are your cart platform, SEO, PPC. But once that’s done, and you’ve got traffic coming, you don’t use the hammer on them to get them to purchase. You engage them, interact with them, say and do things with them that are relevant to where they are in their decision process. For example, if you splash a discount across all products to all customers, you are leading with price and not with value. But the third time somebody visits your product page in two days, they are making a choice and are going to buy from somebody; closing the deal becomes important.

So rather than just keep hammering people through the front door and saying the same things to all visitors, perhaps do a little listening to what they are telling you in their behavioral clues. Then present them with content that is relevant. And take back some of your marketing budget.

How to Discover Your Perfect Target Customer in 5 Steps

Posted on April 17, 2012 by John Jantsch

One of the most important elements of a marketing strategy is the development of an ideal target customer profile. Effectively understand who makes an ideal customer allows you to build your entire business, message, product, services, sales and support around attracting and serving this narrowly defined customer group.

Image See-ming Lee SML via Flickr CC

When working with businesses that have an established customer base I can generally identify their ideal customer by finding the common characteristics found in their most profitable clients that also refer them to others. I’ve written about this kind of ideal client discovery here.

Today, however, I want to address the needs of the start-up or business with very little customer experience. Finding and serving an ideal customer is equally important for a business just getting started and establishing a focus on discovering a narrowly defined ideal client from the very beginning will save months of wandering in the dark trying to be all things to all people.

The 5 steps below can put you the path to discovering your ideal target customer.

1) Start with the Smallest Market Possible – This may feel counterintuitive to many just starting a business, but you have to find a group of customers that think what you have to offer is special. When you’re just getting started you may have very little to offer and in many cases very few resources with which to make sufficient noise in a market for generic solutions.

Your key is to find a very narrow group, with very specific demographics or a very specific problem or need and create raving fans out of this group. You can always expand your reach after you gain traction, but you can also become a big player in this smaller market as you grow.

2) Create an Initial Value Hypothesis – In the step above I mentioned the idea of finding a narrow group that finds what you have to offer special. Of course, this implies that you do indeed have something to offer that is special.

You must create a “why us” value proposition and use that as you hypothesis for why us. If this is starting to sound a little like science that’s because it is. You must always stay in test and refine mode in order to move forward.

Many people get caught up in trying to execute their business plan when the fact of the matter is the market doesn’t care about your business plan. The only thing that matters is what you discover and apply out there in the lab beyond your office.

3) Get reality in Discovery Test Sessions – Established, thriving businesses have the ability to learn a great deal every day from customer interaction. Since start-ups don’t have any customer interaction they have to create ways to test their theories initially and on the fly.

The key to both making and affirming your initial assumptions is to set-up what I call Discovery Test Sessions with prospects that might easily fit into your initial smallest market group. These are essentially staged one on one meetings.

This can be a little tricky since you have no relationship with said prospect. I often find that there are industry or trade groups that may contain your initial target market and by joining these you may have an easier time gaining access to this group.

Another possible option is to offer free sample products or beta test relationships to those willing to provide you with agreed upon feedback.

The main thing is that you start talking to prospects about what they need, what they think, what works, what doesn’t and what don’t have now. This is how you evolve your business, your features and your assumptions based on serving a narrowly defined target.

4) Draw an Ideal Customer Sketch – Once you’ve trotted out your hypothesis and tested it with your narrow group, you’ve got to go to work on discovering and defining everything you can about your ideal target group.

Some of this information will be commonly understood, such as demographics, but much of it will be discovered in your test sessions and though some additional research in more behavioral oriented places such as social media.

This is a great time to start your CRM thinking by building custom profiles that include much richer information than most people capture. I wrote about the new breed of CRM that is making this easier to do than ever.

5) Add Strategy Model Components – the final step is to apply this new ideal customer approach to other elements of your strategy.

The thing is, when you discover your initial ideal client it should impact the thinking about your basic business model and overall business strategy. All great business models are customer focused and now that you have a picture of this customer it’s time to consider how this alters the other aspects of your business.

Consider now how this discovery might impact your offerings, your revenue streams, distribution channels and even pricing.

Consider how you can reach this market, who you can partner with and what resources you either have or need to have in order to make an impact in this market.

I can tell you that my experience suggests that you’re never really done with this exercise. As your business evolves, as you learn and grow, this model will evolve as well, but perhaps the continual process of discovery is just as important as what you discover.

Courtesy of John Jantsch, Duct Tape Marketing. Republished with permission.

Instagram Acquistion – No Revenue, No Problem

Posted on April 11, 2012 by Tim_Huntley

Maybe you missed the big news (4/9/2012) of the Instagram acquisition by Facebook for a billion dollars.

Perhaps Facebook has a plan and a strategy – but so far, public opinion hasn’t been, shall we say, enthusiastic. Check out this headline in Forbes:

Honestly it’s pretty difficult to wrap your head around spending a billion dollars for a company that has 13 employees, is less than 2 years old, and has zero revenue. That’s right, in spite of having 30 million users, Instagram has no revenue, and let alone profitable revenue.

Perhaps in the Facebook pre-IPO world, the world where Instagram represents a real threat to a $137 billion valuation, an Instagram acquisition represents a great insurance policy.

But more than likely you live in a world where your business needs to generate revenue and profit. If you are spending significant dollars getting people to your ecommerce site and doing a good job getting people to put items into a shopping cart, doesn’t it make sense to do what you can to improve the rate that they actually purchase those items?

You bet! But according to an industry report by Coremetrics, the percentage of items in a shopping cart that are purchased isn’t very impressive.

If you are seeing results similar to those above, are you satisfied because you are within the industry averages? If not, take a look at the Spring Metrics Smart Offers Page. By understanding who is coming to your site and what you can do to target their buying behavior, you can increase your conversion rate and your revenue. You can influence shoppers in real time to proceed through the checkout with their carts, closing the sale BEFORE it becomes an abandoned cart.

You don’t have to be average.

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