I began writing this column on marketing optimization in 2001; yet this morning, 12 years later, I find myself in LA to train a well-known company that wants to start “crushing it” by developing an optimization culture, rarer than running a few tests a month. This is the third such training I’ve done this year already, and I am willing to bet this client will be one of the most successful of the three.
Why is that?
“A growth team that ‘crushes it’ cannot be built in the absence of culture, priorities and hiring since tactics and strategy are made possible by the former.” – Andy Johns, user growth team, Facebook
This is a training where the CEO and the president/founder will be joining us. Those of us who work in the conversion optimization/user experience space must be thrilled after all these years that conversion optimization is now one of the top priorities for the C-suite. However, like social media, or content marketing, it is not something you can just throw tools and dollars at to make successful.
I had hoped 12 years ago that many of those C-suites would have learned that what makes an online marketing team successful is not about what they do with their part of the $100+ billion that was spent this year on driving traffic, but what their team did to convert that traffic into sales or leads. In 1998, when the first industry benchmark for conversion rates came out, conversion rates hovered in the 2 to 3 percent range for most companies, and they still do even today. But not those who have invested in optimization cultures – more frequently than one would expect, they enjoy conversion rates five to six times the average.
Which brings us to this: spending a fortune to drive traffic to your site – when most of it never does anything while there – results in such a high cost of customer acquisition that it’s hard to sustain growth year after year.
It seems clear that trying to increase sales by driving more traffic to a site with a terrible customer conversion rate is like trying to keep a leaky bucket (your sales funnel) full by adding more water instead of plugging the holes. What you need to do instead is work on keeping more of those people from falling out of the funnel on the way to the close.
You have five great reasons to focus on increasing your conversion rate:
- You don’t just get more sales; you get more sales from your existing traffic. There’s no need to increase your marketing expenses.
- Your customer acquisition cost goes down.
- Your customer retention rate goes up.
- Your customer lifetime value goes up.
- The effect is permanent. It outlives any particular marketing program.
Other than those, it’s a terrible idea… 😉
The Econsultancy/RedEye Conversion Rate Optimization Report 2012 showed that companies whose conversion rates have improved over the previous 12 months are performing on average 24 percent more tests and using 26 percent more methods to improve conversion than those companies whose conversion rates have not improved. And that’s just the average compared to those who don’t optimize continuously…imagine the depth and breadth of tests and techniques used by really successful companies on top of their conversion game.
Seventy percent of the responding organizations that said they had a structured approach to conversion had improved sales. This year’s survey also found that companies that adopt a structured approach are nearly twice as likely to have seen a large increase in sales.
That’s the catch! Putting in place a structured program; learning to use the multitude of conversion optimization techniques, tools, and tricks to optimize the user experience; having a person directly responsible for the conversion rate success of your website; and incentivizing your team on conversion success. So much needs to go into the infrastructure of the organization to really hold it accountable for “crushing it” with optimized growth.
P.S. Big businessman crushing a small one courtesy BigStockPhoto.com