Increasing sales conversion rates offers a greater ROI than what you can get from optimizing your traffic; either from paid or earned media. The math is simple – even if many never do the calculations. Companies with higher conversion rates almost always have better marketing efficiency ratios (net contribution/marketing expenses.) The upside is that these companies make more money and that’s a good thing. The downside is that it’s hard work to accomplish better marketing efficiency ratios. These companies are led differently; they have higher levels of collaboration and higher standards of accountability.

The top performing companies consistently convert visitors to sales at rates in the double digits. They’ve been doing that for years, while the vast majority converts at low single-digit rates. The gap between the top performers and the middle of the pack continues to grow. I have two questions for their CEOs.

1a. If you sell online, do you convert at least 10 percent of your visitors to sales?

1b. If your online efforts are geared toward lead generation, do you convert at least 20 percent of your visitors to leads?

2. So do you know exactly why your company doesn’t convert better?

It can’t be that the company’s already making so much money that it doesn’t matter. It can’t be that the company doesn’t care enough about their potential customers to make sure they get exactly what they were looking for when they visit. It can’t be that someone in the company is already “responsible” for conversions so you stopped worrying about it.

If as CEO, you had a sales force that was underperforming the market leaders by a factor of 500-1000 percent, you couldn’t just point to the VP of sales. As the CEO, you would also be accountable. Of course, this assumes that you have the equivalent of a VP of sales responsible for the marketing efficiency ratio. In my last column, “Leadership for the Marketing Optimization Team,” I explained what kind of people companies need and what kind of backgrounds they should have.

What follows are the more likely reasons that companies underperform online. Perhaps the CEO still doesn’t know what factors of the customer experience impact sales. Perhaps the CEO still doesn’t know what projects or what departments to favor. Perhaps the CEO still simply doesn’t know what truly needs to be done to optimize the marketing efficiency ratio.

I’m disappointed. I feel somewhat responsible after evangelizing about accountable marketing for more than a decade. I suspect if these companies’ shareholders knew just how much money was being left on the table they would be too. Ignorance is not an excuse and in business it isn’t bliss.

Nobody has been involved in e-business for two decades. There are too many not-quite experts, over-promising tool vendors, and self-proclaimed pundits demanding attention. It’s the responsibility of executive management to create an expansive environment where learning in ongoing silos is less important than customers, and optimization isn’t a project but rather a habit of great execution.

Stop paying attention to what your peers are doing (so-called best practices) and start benchmarking against your customers’ expectations. Can you meet or exceed those expectations? Your conversion rate will be a leading indicator. Conversion rates are a measure of your ability to persuade visitors to take the action you want them to take. They’re also a reflection of your effectiveness at satisfying customers, because for you to achieve your goals, visitors must first achieve theirs.

Columnists receive a lot of feedback. As a reader of this column, you’re likely part of the choir I’ve been preaching to for years. I hope you enjoy the column and find it useful. If you agree or disagree with this column, then please direct your comments not only to me, but also to the CEO.

I rarely get new questions I haven’t written about before in this column – as I approach my 11th year as a ClickZ columnist. Yet, at SES Chicago this week, one of the attendees asked me how you go about building out a marketing optimization team. What kind of people do you need? What kind of backgrounds should they have? I know I’ve discussed this with clients but I haven’t written about it before.

First, please notice that, I did not call the team the landing page optimization team or the conversion optimization team. This organizational monstrosity is part of the we-work-in-silos-but-pretend-to-cooperate mentality that produces poor and disconnected experiences for customers. For digital marketing efforts to maintain consistency across all channels, traffic generation needs to be intimately connected to your website and if appropriate your offline experience – after all those are the experiences promised. Never forget that your website is the glue that binds all your channels together.

Jeffrey Eisenberg, my brother, likes to remind people that in our increasingly transparent experience economy marketers are no longer paid to make promises that the business has no intention of keeping. If you’re still in an organization that thinks they can promote their way to success, bail now. Experience is what matters and you better deliver better than what you promise or the world will quickly know.

Is building a successful optimization team possible? Yes! Based on my experiences working with and training successful optimization teams and the research I have seen from eConsultancy and MarketingSherpa on the topic I can tell you how to make optimization succeed.

The first and most critical position is to have someone at a Vice President or above level that is in control over conversion rates directly responsible for your optimization efforts. They along with their staff (we’ll discuss shortly) should all be incentivized directly based on their results of improving conversion rates and revenue. The KPI should relate to marketing efficiency. There are a few ways to calculate this but gross margin over marketing expenses is my favorite.

This leader should be the online equivalent of your offline VP of Sales. This executive should have direct accountability to someone in the C-Suite who supports the effort. This person should be both extremely curious and driven. This person should also possess a high degree of empathy for the customer and the customers’ experience. This person is also a competent jack of all trades with significant understanding of online marketing methods including: search engine marketing (SEO & PPC), affiliate marketing, display, social media, etc. They’ve probably been reading a bunch of the books on this list I put together. They will need to work collaboratively with all those teams and the web analytics group to segment and continuously tweak both the traffic driving efforts along with the site experience efforts.

I’m not done. This person should be comfortable working with a variety of methods of identifying insights and optimization techniques. Econsultancy’s 2011 Conversion report found that companies whose conversion rates have improved over the previous 12 months are using on average 26% more methods to improve conversion than those companies whose conversion rates have not improved.

Irrespective of the leader of the team; it is very important that the culture of your organization allow for intelligent risk taking so that this person is empowered to try radical efforts to improve conversions and not simple methodical efforts. A strong analytic background is truly not required. Nevertheless, this person should have the ability to be able to use data to tell the story of what is happening to your visitors based on that data they gather themselves or they get directly from an analyst. I can’t emphasize strongly enough how much more important it is to be connected to the narrative of the experience than the data it leaves as residue.

This is generally why most traditional web analysts don’t make for good optimization team leaders. They love the data diving but not the storytelling and brand value.

This person must also have the authority to draw upon a steady stream of talent ranging from web analysts, creative resources (designers, copywriters, videographers, merchandisers, etc) as well as IT resources in order to be able to execute on a continuous basis. Ideally there are resources dedicated to the optimization team but they can be shared as long as there is a strong value placed on prioritization and execution in the organization. This team should not exist as a vacuum within the marketing organization but should draw upon the knowledge and experience of the media team including search, display, email, affiliates and even offline media. The research shows that organizations that have more people dedicated to improving conversion rates tend to improve their conversion rate the most. Not a big surprise I am sure.

Lastly, in order to be successful you need the tools in place to have the agility to gather insights, create ads and landing pages (or paths), refine marketing campaigns and pages, launch tests, & segment and personalize web site experiences and are not restricted by the company IT department. Allow this person to be trained and train your team in the art & science of marketing optimization and allow them to create a structured approach to conversion and you can virtually guarantee you’ll squeeze a lot more conversions from all your marketing efforts.

The reality is I have only met a few dozen of these individuals who have this experience over the past decade. I’m sure there are some I haven’t met yet but they are a rare breed. These leaders are going to have to be trained and mentored in order for more companies to see the massive traction that these leaders have brought to their organizations. You can’t outsource this core competency or downplay it.  It’s a serious commitment but one that has a high payout over the long term.

P.S. Ever wonder why the leaders in conversion out-perform the average conversion rates by a factor of 500-1000%? Think compounding! For example a 5% improvement every month for a year is an 80% increase. Steady disciplined optimization is not a project it’s a core competence for industry leaders.

Let’s get right to that list….

1. Online Marketing budgets aren’t allocated to enable you do to the job right.
2. Because of #1, I am sure you could list 98+ more reasons!

Too often the C-Suite has not figured out that your digital marketing (I include web, email, mobile & social here) activity is the glue that binds their brand together. They miss that online is that initial first impression before most people even decide to step into your physical store. So it demands that online live by the metrics but rarely gets the benefit of those squishy soft “brand” dollars. It’s 2011 and digital marketing and digital experiences are still way too often treated like the red-headed step child of traditional marketers. These digital marketers are expected to perform at incredible efficiencies which are never expected nor demanded from their traditional marketing counterparts.

As I stated in my last column, Conversions: Who’s Job is it Anyway; in the offline world there is a VP of Marketing and their counterpart the VP of Sales, but no such thing exists online. That column elicited a comment from a reader stating that you can’t “really offer an employee 8 hours per day 5 days per week and a good paycheck just for conversion optimization (CRO).” He went on to babble about how he would rather see a PPC manager or an SEO manager do CRO as part of their job.

Let me start by sharing the ugly truth! Most PPC accounts are a mess. We’ve audited many of them looking for conversion optimization. At best they need tons of work just to get them to a satisfactory level . Nevertheless, at least they seem to hit most of the core metrics at least in part because the media has still been wildly misattributed. Most of the PPC managers don’t have the additional bandwidth to simply maintain their account efficiently but yet you want them to have the time and learn the vast range of multi-disciplinary skills needed to do conversion optimization? Huh? Digital marketing is pretty complex work.

Most SEO managers are in the same boat. Just ask any consultant or Search Marketing platform vendor who has worked across enough accounts and they’ll tell you how 95%+ of all accounts are a mess. Oh yeah! The same is true of web analytics analysts as well.

These aren’t simply my opinions – go talk to them.

Now ask anyone who has ever been in the online optimization business and you’ll learn the same thing for each one. The budget to launch new websites or new campaigns tend to be healthy but what might be left over to improving the campaign or website after launch is worse than anemic.

To wring out significant returns on your investment, optimization must be an ongoing part of your daily marketing activities. It has to be a habit. So if you’re aiming to come to a point where you’re “finished” with optimization, you’re missing the point. Optimization is not a project, it is something you do daily to maximize the revenue of your marketing efforts.

Over the last few years the job of the conversion optimizer has been aided by the explosion of applications and services to help you improve your website or marketing efforts. Many of these services are low cost or even free! I often recommend that companies should get good at free first, then pay for a more robust solution once you have adoption.

A big excuse for the lack of optimization was the lack of access and resources to the tools. Web analytics, A/B & MVT testing tools, personalization tools and even usability studies were expensive, that is no longer a valid excuse.

For years I have blogged a yearly list of these tools. Three years ago I published my first blog post listing 33 free tools to improve your website, the following year it grew to 69 tools, last year it mushroomed to 99 free & low cost tools to improve websites and marketing efforts. This year I wanted to publish over 120 tools when Jeffrey asked me if I was out of my mind! That was my clue that it was time to launch a website dedicated to online marketing tools. You can check out the website at http://www.WebsiteTestingTools.com.

These tools allow a CRO specialist to spend his day gathering insights about your customers and your campaigns, identifying opportunities for creating new landing pages, developing new hypothesis for tests, figuring out how to segment and target your customers effectively and how to improve each and every one of your marketing campaigns. If you only have a handful of campaigns you may not need a full time employee but any business doing more than a couple of million dollars in online revenue probably does and the larger the company the more resources that will be needed.

The only excuse for not optimizing vigorously now is just being too lazy, ignorant or worse to prioritize the optimization of your efforts. I know that this column might hit a nerve. So if you’re a CEO or a senior executive who has been sent this then I have one question – when will you take optimization seriously?

Building an optimization culture is hard and it seems that it might be getting harder. My friend Avinash Kaushik, the analytics evangelist at Google, recently shared an important stat and his observation on Google+:

Only 22% of companies have a strategy that ties data collection and analysis to business objectives. Down from 25% last year. [Source: Econsultancy Online Measurement & Strategy report http://goo.gl/OGscu]

The problem is not the tool. The problem is you and me and our management.

Think of it another way: 78 percent of companies are just hoping for success by guessing how well they are at providing their customers quality experiences. While we may all be suffering from data diarrhea, making decisions based on analysis of our metrics is just unclear, and they fear failure. Some call this assumption marketing. For over a decade, I’ve called this a symptom of accidental marketing.

One key question is why did the numbers go down from 25 percent last year to 22 percent this year? My answer stems from a simple economic theory that holds true in most marketplaces. The rich get richer! It happens in finance, it happens in SEO with the Filthy Linking Rich, and it happens in data-driven cultures. Companies that have a culture of analytics and testing seem to pull in those individual talented people who show up at the odd company and get frustrated that they have no impact or value there. I have seen this countless number of times with friends in this industry. It’s frustrating, like pushing on a rope.

When leadership’s ability to focus on optimization is dysfunctional, they keep relying on the next “big idea.” They favor long CYA meetings instead of managing to the metrics that impact their business. They continue to do business largely the way they have for the last 20-plus years, even though everything around them tells them the world has changed. Meaningful change is not just releasing a cool mobile app and launching a new HTML5 website. It’s not the medium but a management and business cultural issue that needs reexamining.

As Marc Bruns commented on Avinash’s post:

The fact is becoming an optimization culture is hard. In my experience, implementations of any kind of data-driven metrics, analytics face the hurdle of an ‘irrational exuberance bubble’ when they begin … early on it seems like it will be easy to change the world, the tools seem so powerful … but then people, politics and turf battles enter the picture; [when times get the least bit tough] management tends slips [sic] into old habits, ‘the old shoe is comfortable.’

I’ve harangued many and even written before about what it takes to build optimization into your business culture. What’s the first step?

Focus! Pick your key performance metric and get your team obsessively focused on continuously improving the marketing efforts and time spent achieving those numbers.

Web analytics industry pundits have suggested that the key to success is better investments in people and process and less on tools. That’s wonderful! Nevertheless, neither of these matter if the investment isn’t on changing culture first.

So companies bring in the tools and assign someone inexperienced to start distributing reports and they start to believe that they are data driven. Surprise! There’s no profit from having a web analytics report; you make money from making changes and experimenting based on the insights available from the data. In order to do web analytics correctly, it needs to generate a to-do list for you.

However, as Philip Walford, another commenter on Avinash’s post adds:

You’ve been scrupulously data-driven in identifying where problems and inefficiencies are located, but now you have to switch and start to hypothesise about why those problems and inefficiencies exist. Two entirely different disciplines: rare to find them in one individual, almost impossible to find them in one organisation.

It is this sluggishness of corporate metabolism to change that has allowed many in the retail industry to forfeit their sales to Amazon.com, which now dominates approximately 30 percent of all U.S. e-commerce.

Noted author Stuart Wilde says “Poverty is restriction and as such, it is the greatest injustice you can perpetrate upon yourself.” Are you condemned to be data rich but optimization poor?

I don’t think it is because companies don’t care or haven’t tried. Are the tools to blame? Partially! First and second generation tools flourished by the promises of riches to come by just tracking the data. Many invested significantly in these tools, but couldn’t find the people to support it. Now many free tools exist and more people are used to using these tools. I’ve always said get good at free and then pay. So are free tools the answer? Nope! Just because someone knows how to use the tool, doesn’t mean they can “convert” management into a data-driven culture.

It’s increasingly harder to hire truly qualified candidates; not that many exist in the first place. When my brother Jeffrey and I built our agency, we’d hire young college graduates who displayed tremendous amounts of curiosity and trained them in our processes and they were turning out insights that rivaled their high-priced MBA alternatives. Training certainly is one option, but it doesn’t work if it cannot be evangelized throughout the whole organization. It fails if all it does is make one or two optimization/analyst employees smarter, because in the long run, those employees will find work elsewhere.

Will you commit to optimization riches or will you remain poverty stricken? Isn’t it time to focus on what the numbers are already telling you?

P.S. If you are a business that is committed to driving a data driven/optimization culture, please reach out to me I have a handful of individuals looking for great opportunities to bring their talent. If you are a business that wants to become data driven and optimization focused let me know and I will see how we can help you.

There are a finite number of ways to stand out and capture significant market share in any marketing category. You can be lowest price driven (a dangerous path), operationally excellent, channel dominant, or focused on customer intimacy. Many companies excel at two or three but it is nearly impossible to excel at all of them. Can you name the company that does?

Here are 5 strategies companies use to become market leaders.

They have efficient operations -

Operations that let them be more efficient than you at getting order picked, packed and delivered so that customers’ expectations are exceeded. These efficiencies in operations also allow them to keep their costs down.  At the same time those interested in capturing additional market share invest those efficiencies back into improving the customers’ experience. Walmart exemplifies this quality. Can you think of another company in this category?

They do a better job at leveraging word of mouth -

Everything they do is focused in on delighting customers. They are driven by service. They understand that success is a long term strategy and can afford to do what they need to in order to please their customers. They go to every extreme to delight their customers and offer lagniappe in many ways.

They live on “life-time value” metrics. They are driven by a passion to serve and a philosophy that it is easier to keep a customer for life than to try and keep acquiring new ones. These some times over the top efforts that lead to so many of their customers sharing the amazing experiences they have had with the brand. Zappos.com exemplifies this quality. Who else belongs here?

They deliver as good of a product/service in a more customer friendly way -

I’ve seen this one happen so many times. One day you, the market leader, the first person to market with the product, with significant marketing budgets, and with the hugest market share become aware of some smallish competitor and ignore them because their product isn’t up to snuff.

They slowly start winning customers, that just need the basic features they offer. All the while they keep building up their product/service. However,  from the get go they eliminated many of the hassles of getting started with their business. Instead of a complicated sale processes, or in-the-way sales people they made their pricing transparent and made it easy to sign up online to get started right away. GotoMeeting employed this strategy when competing with Webex. This often happens when first movers lose their “start-up” ways. Remind you of anyone?

They do a better job at being found when people need them -

Location, location, location. Budweiser is not the world’s finest beer. However, they sell a lot of beer. Bud dominates so many channels that they are always available. We know Bud and so we order it because often good enough is good enough. Amazon applies this principle online.

Wherever or whatever you search for comes up on their site or on Google as being sold by them. I am not just talking about having a first place ranking for the most competitive single word key phrase, but they have invested in having content (a large portion customer generated) that spans the long tail, from early in the buying process to later in the buying process. Their pages tend to keep showing up time and time again. They thrive on generating content that is relevant and are thrilled to live off the 3 or 4 searches a month for a particular piece of content or obscure product as long as they have thousands of them that people are finding. Amazon has utilized this to keep adding product categories to their vast catalog and why I think they may be the most successful PPC advertiser of all time as well as having millions of pages indexed and dominating in the search rankings. Who else can you find in this category?

They developed a culture that continuously optimizes the customer experience -

This is different than being customer intimate, it is more incremental, it is about being metrics driven. The key is to focus on key performance indicators that drive success for your business and being relentless and innovative in way to drive up those numbers. They may not often start off as the category leader but through relentless testing and optimizing they gain market share. These companies tend to be less risk averse preferring gradual and continuous change. This is a very powerful strategy for companies to leverage in a down economy, because while your competitors are trying to maintain status quo you focus on constantly improving. Many of Intuit’s brands exemplify this strategy. This one is a tough one to crack for lots of people. Do you need help here?

Maybe this is why Amazon.com control nearly 30% of e-commerce in the US? How can you leverage these strategies to drive your own growth?

Being able to share a great success you have is a nice thing, but it is even better when you have the opportunity to share your students’ successes. Over the last couple of years I have seen my students shine writing for publications such as ClickZ, speaking at conferences, generating and publishing interesting research about personas, and of course getting remarkable results for themselves or for clients. I am sure you would love to know the secret to their success?

I went back and analyzed thousands of tests and improvements we made for clients in my 10-plus years running our agency and the success that my early students had, and I was able to narrow it down to what I call the “conversion trinity.” This is also the same formula I have shared to help people find big ideas for testing and to ensure they are testing smart variables that won’t waste resources but will provide them a lift in click-through rates and conversions.

So What Is the 3 Step Formula of the Conversion Trinity?

• Relevance. Are you relevant to my wants/needs/desires (search query)? Have you maintained scent?
• Value. Do I know why you are the right solution for me? Have you explained your value proposition/offer well?
• Call to action. Is it obvious what I need to do next? Have you given me the confidence to take that action?

Every successful test or ad or landing page improvement has come from enhancing one or more of the trinity factors.

My former student Noran El-Shinnawy did a great job explaining how to use the conversion trinity with email marketing. I’ll be sharing with you how to use it to improve the ideas you test and some examples from PPC advertising.

Former student Patricia Hader had her test, which she performed as part of her MarketMotive Master Certification course work, published on WhichTestWon.com. We’ll look at this test as a great example of using the conversion trinity to improve conversion rates.

Let’s start by analyzing Patricia’s 52.8 percent boost in newsletter subscriber rate for the New York Public Library.

Here is the before page:

Let’s see how she improved the page:

How did it improve:

• Relevance. The new headline let’s people know that this is how to stay up to date with the NYPL instead of just telling them to subscribe to newsletters.
• Value. A bulleted list of what visitors would get when they subscribe was added, as well as an image and link to a sample newsletter.
• Call to action. The form was simplified to one field from three fields and a list of check boxes to choose from. Also, the point of action regarding NYPL’s privacy was simplified.

The Conversion Trinity for Pay-Per-Click Marketing

Above you have seen an example of how to improve a landing page. Now let’s look at a PPC ad and see how we can apply the conversion trinity.

Let’s analyze this before and after the PPC ad rewrite from BoostCTR that resulted in a 326 percent increase in click-through rate.

Before:

After:

• Relevance. The new ad focuses in on the need of wanting better PPC ads versus a headline that just said “boost CTR.”
• Value. The new ad includes a specific value of clients seeing a 30 percent higher CTR.
• Call to action. By adding the word “get” to the guarantee of better ad creative, the phrase was turned into a call to action.

Try a Conversion Trinity Analysis Yourself Now!

Do a search on “cheap hotels NYC” and look at a couple of the ads and landing page combinations. Using the conversion trinity, what would you suggest that these advertisers improve? Share it in the comments below.

Now try it for your top three to five terms.

Look at yours and your competitors’ ad/landing page. What could you improve based on your conversion trinity analysis? Feel free to email me what you found.

Looking for more proof that most successful improvement comes from leveraging the conversion trinity? If you look at what MarketingSherpa found as the top four page elements having a significant impact on testing, I think you will see that they are all part of the conversion trinity.

Headline and images are about relevance, body copy is about value, and form layout is about call to action.

Are you focused on using a successful formula or are you just fumbling around hoping to get lucky?

Last column I shared the following test, which I found “in the wild” and asked readers to identify the variables. Hoping that instead of testing all the variables you could narrow it down to the most meaningful variables so that you minimize the time and resources needed to complete the test.

Version A

Version B

Depending on how you want to define your variables, these two pages have around a dozen changes.

Here is my list:

1. Layout orientation. As I mentioned last time, one is laid out horizontally (A), the other vertically (B).
2. Different taglines (UVP). A) Make every visitor count. B) A marketplace of landing page designers.
3. Call to action headline. A) Improve your conversion rates! B) Get started here!
4. Call to action header background color. A) Darker shade of blue than B.
5. Call to action graphic. A) No arrow pointing down. B) Has an arrow pointing down.
6. Call to action button copy. A) Invite me. B) Create account.
7. Call to action button color. A) Blue to match header. B) Orange for higher contrast.
8. Call to action button size. A) Full size of form. B) About two-thirds the width of the form.
9. Call to action form field. A) Four fields to complete. B) Five fields to complete with added company as optional field.
10. Required text for call to action. A) Has none. B) Has it at top of form.
11. Point of action assurance. A) Privacy guarantee above call to action button. B) Below button.
12. Testimonial. A) To the left of the form on top. B) Across the bottom of the page.
13. Copy. A) Three paragraphs of text. B) Adds fourth paragraph about “A fresh pair of eyes.” Also, the order of the paragraphs is changed.

Click here to view the embedded video.

Most of the time, when I see such a list of variations, it would seem that the business is testing for variations first and impact second. Testing has to start with the “why” first. Why will this matter to my customer? Why will changing the layout from horizontal to vertical change their feeling about buying from us?

This goes back to what we all learned in elementary school. You start a test with a hypothesis first. Instead, most companies today throw variables at the wall, sometimes not even aware that they are changing variables and all they look for is what version gave them a lift. This is a great strategy when you have endless resources and time to wait for tests to complete, or when you have a page that is converting at around 70 percent-plus and you want to start fine-tuning it.

So what are the three variables I would test from these two landing pages?

1. Different taglines (UVP). I would want to test at least three or more very different versions to find what resonates most.
2. Call to action form field. Whenever we can reduce a form field by 20 percent from five fields to four fields, that should have an impact.
3. Call to action headline. We want to make sure our offer is clear and this should summarize it quickly.

Did you identify these as the big ideas to test first? Have you been testing intelligently or have you been guilty of slice-and-dice optimization? Testing these three variables first enables us to complete our test in 18 days versus 108, based on the number of variations that need to be tested.

What about testing the call to action button and other variables?

Sure, I would eventually want to test that, but the first goal should be to make sure our offer is viewed as relevant and valuable enough to our visitors to want to complete the call to action. Have you ever stopped yourself from clicking on a button because it was blue and not orange if you found the offer relevant and compelling?

Is yours the typical company launching 2-5 tests a month, struggling to eke out more from your marketing optimization program, and wasting critical marketing resources of your team and website traffic? That’s the result of not focusing in on the Big Idea!

How much should you be testing?

A mid-size company can easily handle 30-50 tests a month. The reason most companies never get there is because they waste so many cycles on what I call “slice & dice” optimization on poorly designed landing pages.

Let’s consider the following test which I found “in the wild” — and which I find ironic because it is for a service offering a marketplace of landing page designers.

Version A

Version B

Depending on how you want to define your testing variables these two landing pages have around a dozen changes. I hope this is not what you want from your landing page designers. You don’t need someone to create endless variations of every variable in order to succeed in your marketing optimization efforts.

Can you identify all of the variables being proposed for testing? (I’ll share with you my list next time.)

For now, let’s assume that for each of these variables on these landing pages, you test just 2 variations even if more may be warranted. I’ll show you what the problem with that approach is. (Note: I’ll make use of Google’s Website Optimizer “Test Duration Calculator” to estimate the numbers, but you could easily do this by hand or with a calculator or simple spreadsheet):

I don’t know the true stats for this page but they don’t really matter in order to illustrate the challenge.

That means it take more than 108 days — over 3 months! — to complete this test for these simple landing pages. That’s a whole-heck-of-a-lot of visitors and a whole-heck-of-a-lot of time consumed to get one test completed.

Testing Landing Pages: A More Efficient Way

The way we teach testing, there are probably 3 variables worth testing (variables that communicate to a visitor) on this page. Let’s assume the same 2 variations for each, though to be frank, for one of the variables I would want at least 3 or 4 variations if we were doing this test for an actual client. But for the sake of simplicity let’s keep everything the same.

This test would be over in just under 18 days, a scant 2 ½ weeks.

Which way seems more efficient?

Suffering from Conversion Optimization Fatique

Should you test for variables that seem to really matter to visitors versus testing virtually random variations of elements in the hope something gives you a little lift? You may achieve some gains — that’s why this practice is so common — but you’ll burn out waiting for the results. This is why so many marketing optimization efforts fizzle out over time.

Next time I will share the variables I found comparing these landing pages and discuss the 3 elements I would test on this current page.

In order to give you a leg up on identifying the variables on your own, I’ll give you a question as a framework. When was the the last time you looked at a page and said to yourself, “The layout is horizontal and not vertical, so gosh darn it, I can’t buy from this page?” Vertical vs. horizontal layout on landing pages could matter as a display of information issue if you are trying to change a lot of what is above and below the fold. But that really wasn’t the case in this example. It’s just a waste of time and effort unless or course you have no real idea what will move the needle for customers – and in that case ANY test is better than nothing. Maybe.

Instead of trying to test endless variations of minutiae we teach companies to look for the big ideas that impact customer experience and buying process. The smaller variations we can always come back to after the Big Ideas establish directionality.

Can you find the big ideas for optimization (or that should be tested) in this example?

Let’s play a little game of what if…

You have the choice in building your organization; you can:

A. Recruit and hire some of the world’s best analytics, customer insight, marketing and testing team members.

B. Recruit average team members but provide them with superb technology and processes.

Many industry pundits would agree (including myself) that you must invest in people before tools. But is it just talent that is required or having the man hours available to get things done that matters?

A. For example, imagine you had a testing team consisting of some of the best in the industry (you could hire Tim Ash, Avinash Kaushik & me) to run your analytics and optimization team. However, if your organization is like most organizations we could only test 2-5 things a month. Don’t get me started on why this happens.

Or

B. Your team had the processes to eliminate many of the traditional bottlenecks and was able to knock out and complete 30-50 tests a month using better processes & tools (yes, these exist today). Of course, these tests would still have to be intelligently designed not just random tests (and this comes from learning appropriate process).

At the end of 2 years which team do you think will drive more incremental revenue, team A or B? Should your goal in your organization be focused on talent or on being agile?

It is the best of times and the worst of times for some businesses. Many look at the world and see the opportunities of being data rich, customer centric, and nimble while others imagine they can bring their old school thinking to the new media, always-on connected customer. They sit cross-fingered hoping that putting lipstick on their pig will improve their results. Let’s explore two publishers making news recently and learn how one is failing while the other has become quite successful.

We will learn from this comparison no matter what type of business we are in.

I love to consume and share content on my iPad. Ask any of the nearly 20-plus million people who have one and I am pretty sure they’ll respond the same way. So you figure when a publishing powerhouse invests an initial $30 million dollars and another $500,000 an issue into an iPad-only publication, how could it go wrong? Well, not all the numbers for The Daily have been revealed (for that you would have to speak to Rupert Murdoch or his Daily staff), but based on recent data and calculations, the results are not very promising. It has been estimated that the app had been downloaded 500,000 times and that 75,000 people have become “regular users” of the app, at least during the extended free trial period. Nevertheless, the tweets per day from the app are on the decline.

If I had to explain to Mr. Murdoch and his team why their paid subscriber to application download conversion rate is so low, I would tell them that while their content is beautiful, the experience of consuming it was painful and slow. People want speed, freshness, and variety. It’s painful to watch all these little boxes on screen while my issue was being delivered and to watch my beard grow as thumbnails of pages loaded. Mr. Murdoch, your publication is obese and crippled.

What has been your experience with The Daily? How would you fix it at this point?

By now I am sure you have heard about the acquisition of The Huffington Post to AOL for $315 million and all the change that has followed that acquisition. The Huffington Post’s news, analysis, and lifestyle website was founded in 2005, which now counts nearly 25 million unique monthly visitors and boasts an affluent, influential audience that is growing at a rate of 22 percent.

You may have heard how The Huffington Post uses  real-time testing to write better headlines. Or maybe you heard The Huffington Post’s CTO Paul Berry speak about its Google Analytics deployment and how it uses it:

When the HuffPost publishes a front-page Quick Read or other feature story, Berry and his team can use Analytics to quickly gauge traffic spikes and update the content in minutes to drive the publication’s editorial direction. The editorial calendar stored on Google Calendar is then updated accordingly, giving staff easy access to any changes even if they are on the road. “Overnight, we can shape our feature stories or Quick Read columns and share any changes with everyone on staff to create more targeted, relevant content and attract more viewers.” says Berry.

As important as these data-driven pieces are to the formula, it was only recently when I heard The Huffington Post’s CFO Eric Ashman deliver the Web Analytics Association Gala Awards dinner keynote that I realized how hard-core, data-centric, real-time-enabling, and customer-focused their business was as he spoke about the primary drivers of The Huffington Post business model.

He spoke about the critical importance of having the right reporting structure in place with web analytics data including real-time stats as they relate to the “product” and marketing stats as they impact sales and marketing flowing directly to the office of the CFO and the board of directors. My brother and I have been advocating that for a reporting system to be meaningful, every piece of data must flow into the financial statements since 2001. Eric, as I do, believes “traffic analytics are as core to strategic planning, decision making and building shareholder value as financial statements.”

Several other critical success factors he shared included:

• Getting the technology team support and the importance of being nimble.
• Getting real-time data in the hands of people who can react quickly.
• Starting simple and building from there.

Mr. Murdoch, I truly wish you could have been there to learn.

Do you agree that we can learn from these two very different publishers?

Create relevant and delightful experiences people want to share. Speed up your site, speed up your corporate metabolism, enable everyone to make decisions based on data, and execute rapidly; that is going to be a winning formula for the next several years. Will you be able to keep up?