001888.optimization Demystified
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OPTIMIZATION DEMYSTIFIED Using the MarketingExperiments Conversion Sequence to Improve Your Marketing Results
How can this guide help you improve ROI? The MarketingExperiments Conversion Sequence was developed by our researchers to facilitate testing and optimization with our research partners. This heuristic device illustrates the relationship between six core principles of the online marketing and sales process (or the buy process). In addition to our partners, many of our students have seen significant gains in ROI after completing our training courses, learning these same conversion principles, and applying this methodology to their own efforts. This primer is designed to introduce you to the essential elements of the MarketingExperiments Conversion Sequence. It also complements many of the case studies, test results, and optimization strategies we share in our training events and publishing initiatives. You can use this primer to: • • • • •
Complement our twice-monthly web clinics Identify strengths and weaknesses in your marketing funnel Provide a source of inspiration for new test ideas Develop and refine optimization strategies with your team, and Improve your marketing ROI
Plus, this guide includes an index of related resources, with links to (free) research briefs and worksheets so you can learn from real test results and make your optimization workflow even more efficient. If you find Optimization Demystified a helpful resource, please share it with colleagues, send us your feedback, and let us know about the results you have seen from using it. In other words, join our community of marketers as we work together to “discover what really works” in optimization. – The MarketingExperiments Team
www.MarketingExperiments.com
Page 2
Table of Contents: Section 1 – Introduction to the Conversion Sequence Section 2 – Clarity of the Value Proposition Section 3 – Motivation of the User Section 4 – Friction Elements of Process Section 5 – Incentive to take an Action Section 6 – Anxiety about Entering Information
Additional Resources About MarketingExperiments Research Partnership Opportunities
www.MarketingExperiments.com
Page 3
Section 1: Introduction
C = 4m + 3v +2(i-f) – 2a ©
The Conversion Sequence is a conceptual tool for understanding and remembering the essential factors that affect website conversion and the relationships among them. Conversion is the process of successfully achieving the primary objective of a specific page or website. Conversion Rate (CR) is the primary measure of conversion and is computed as:
CR% = (#Successes / #Actions) * 100
Conversion rates you might track include: 1. Conversion to Sale 2. Conversion to Email Capture 3. Phase-Level Conversion Phase-Level Conversion Rate can be established for any process or process-subset for which the number of arrivals and number of successes is measurable and meaningful (e.g. completion of forms, clicks on banners)
www.MarketingExperiments.com
Page 4
Section 2: Value Proposition
C = 4m + 3v +2(i-f) – 2a ©
Clarity of the Value Proposition: There are two skills necessary to leverage the power of a value proposition for your landing pages: 1. You need to be able to identify an effective value proposition. 2. You need to be able to express an effective value proposition.
Identifying an Effective Value Proposition Value proposition is the primary reason why a prospect should buy from you. 1. This requires you to differentiate your offer from competitors’. 2. You may match a competitor on every dimension of value except one. 3. In at least one dimension of value you need to excel. 4. In this way you become the best choice for your ideal customer. 5. There is a difference between the value proposition for your company and the value proposition for your product. You must address both. Principles for evaluating a value proposition: 1. A value proposition is not usually determined; it is discovered. It grows out of need. www.MarketingExperiments.com
Page 5
2. Avoid a sales-driven approach to product development. You should develop products for the market. 3. Ask yourself this question: “Why should my ideal prospect (the group you intend to serve) buy from me instead of a competitor?” 4. Compare your answer with the claims of your main competitors. 5. Refine your value proposition until you can articulate it in a single, instantly credible, sentence.
Expressing an Effective Value Proposition Holistic approach: Every element at every step along the buy process must either state or support your value proposition. 1. Congruence - having every element of your page either state the value proposition or support the value proposition. 2. Continuity - Making certain that each step of the buy process either states or supports the value proposition.
www.MarketingExperiments.com
Page 6
Section 3: Motivation
C = 4m + 3v +2(i-f) – 2a © Motivation: 1. Motivation has the highest coefficient in the Conversion Sequence. 2. To understand Motivation, you must look at your channels. 3. The point is to determine the nature and the magnitude of customer desire within a given channel. 4. The best way to accomplish this determination is through development of a Channel Map (see below). Motivation can be thought of in 2 components: 1. The magnitude of the customer’s demand for the product 2. The nature of the customer’s demand for the product – i.e., the reason(s)
Channel Maps
To maximize relevance within your landing pages, you will tie insights from your Channel Map to: 1. The headline of the landing page. 2. The intro/problem text of the landing page. 3. The benefits statement of the landing page. 4. Additional elements such as pictures, sub-headlines, and copy www.MarketingExperiments.com
Page 7
Constructing a Channel Map 1. List Each Channel You can use almost any metrics program and shopping cart program to extract your data. If you do not have all the data, just fill out what is available. The two most important values are the cost of the traffic and the revenue generated from that traffic. Other fields will provide the information for subsequent steps. 2. Rank Each Channel For most businesses, this will mean ranking them by descending profit or descending revenue. Ranking your channels in order of descending performance helps you to identify patterns and to prioritize your channel profiling efforts in steps 3-5, where you will uncover the nature of the demand. 3. Profile Each Channel You will begin by identifying core commonalities among the top-performing channels focusing on the Magnitude and Nature of the channels and customers. Magnitude: Channel types, recency of interaction. Nature: Common demographic attributes. Then, you will use these key insights to develop headlines and key phrases that address these motivations. 4. Track Each Channel Simplify your tracking to essential channel metrics. The objective is to keep this tracking system as simple and easy as possible. 5. Match Each Channel Identify additional channels that match ideal profile. External Discovery: Search within publications, organizations and industry associations for other prospects that possess the same core commonalities of your ideal profile. Internal Discovery: Poll or interview your highly motivated profile customers to find out other channels they use. In this way you discover other access points to the same highly motivated profile group. 6. Optimize Each Channel Maximize relevance within each channel. Relevance is achieved by matching content to the customer. Core commonalities can help you establish high relevance. Use insights from Steps 3 and 5 about the Magnitude and Nature of customer demand to maximize relevance between channels and corresponding landing pages.
www.MarketingExperiments.com
Page 8
Section 4: Friction
C = 4m + 3v +2(i-f) – 2a © Friction is psychological resistance to a given element in the sales process. Friction exists in the mind of the consumer.
Principle 1: One of the most effective ways to increase conversion is to decrease Friction. Indeed, our experiments suggest that there is a disproportionately high return on efforts to reduce Friction. Principle 2: The objective is to minimize not eliminate Friction. If you eliminate all Friction you, necessarily, eliminate the sale. Principle 3: Once Friction has been minimized, you seek to overcome the remaining Friction with incentive.
Common Errors – All Pages 1. Placing too many fields on your landing page forms. You should request no more information than you absolutely need at that stage in process to accomplish the primary objective of the page. 2. Placing primary offer content in the right or left columns of your offer page. These should be reserved for navigation and supporting elements only.
3. Concentrating all of your selling efforts on the offer page. You must “sell” on every page of the order process, right through the confirmation page.
www.MarketingExperiments.com
Page 9
Common Errors – Category Pages 1. Placing too many products on a single page 2. Confusing layout with products organized haphazardly; especially both horizontally and vertically without an immediately obvious pattern 3. Navigation bars that change from page to page in non-intuitive or unconventional ways Common Errors – Product Pages 1. Too many elements concatenated on a single page without navigational references or a natural decision-development flow 2. Call-to-action buttons that are vague or ambiguous (for example, “Submit” or “Continue” instead of “Add to Cart”, “Choose Product Options” or “Buy it Now”) 3. Extra steps or off-page clicks to support the purchase-decision process
www.MarketingExperiments.com
Page 10
Section 5: Incentive
C = 4m + 3v +2(i-f) – 2a © Incentive is an appealing element you introduce to stimulate a desired action. Principle 1: The objective of Incentive is to “tip the balance” of emotional forces from negative (exerted by Friction elements) to positive. Principle 2: Incentives must be tested. There is an “ideal incentive”. Until you find one that gives you a major boost, you must assume you have not yet found the ideal incentive.
www.MarketingExperiments.com
Page 11
Section 6: Anxiety
C = 4m + 3v +2(i-f) – 2a © Anxiety is psychological concern stimulated by a given element in the sales process. 1. Anxiety is more lethal to the close and the buying process than is Friction. 2. Coefficient may be the same but in terms of impact, anxiety has higher impact. 3. While anxiety often is stimulated by a legitimate concern, its degree/impact is often disproportionate to the measure of risk. 4. In practice, this fundamental understanding of the psychological aspects of anxiety calls for over-correction in the buying process. 5. Anxiety is localized in the buy process. It is closely associated with the geography of the page. When mitigating anxiety one must think in regards to the substance and in regard to perception.
Common sources of customer anxiety 1. Quality of service 2. Reliability of the product 3. Credit card security 4. Price
www.MarketingExperiments.com
Page 12
Ways to effect an over-correction External factors (what others say about you) 1. Security seals (HackerSafe) 2. Credibility indicators (BBB, Trust-e) 3. Testimonials (categorized, sequenced, and specific to the cause of anxiety) 4. Third-party ratings (PriceGrabber, Yahoo! store, etc.) Internal factors (what you say about yourself) 1. Copy 2. Language 3. Tone (match tone to buying decision) 4. Personalization 5. Signatures 6. Images, colors and themes (match look and feel to niche) 7. Privacy policy 8. Satisfaction guarantees 9. Contact phone number (reassure that the company is legitimate and you can talk to an actual person)
www.MarketingExperiments.com
Page 13
Additional Resources Use the following links to access examples, case studies and test results, and tools related to elements of the MarketingExperiments Conversion Sequence.
Section 1 – Introduction to Conversion Sequence Clarity Trumps Persuasion
A Clinical Assessment of Landing Pages
Optimizing Offer Pages
Section 2 – Clarity of the Value Proposition Powerful Value Propositions
Value Proposition Worksheet
Powerful Value Propositions II
Section 3 – Motivation of the User Optimizing Headlines and Subject Lines
Optimizing ecommerce Websites
Optimizing PPC Ads
Section 4 – Friction Elements of Process Lessons Learned
Improving Conversion by 162%
Ecommerce Holiday Playbook
Section 5 – Incentive to take an Action B2B Landing Pages
Filling the Pipeline
B2C Landing Pages
Section 6 – Anxiety about Entering Information Email Marketing Tested
Optimizing Site Design
Using Testimonials Effectively
www.MarketingExperiments.com
Page 14
About MarketingExperiments MarketingExperiments was the first internet based research lab to conduct experiments in optimizing sales and marketing processes. Today, with multiple optimization formulas, and with its MarketingExperiments Lab™ technology, MarketingExperiments partners with companies ranging from small businesses to Fortune 50 companies to drive breakthrough discoveries and “discover what really works in optimization.” This has enabled MarketingExperiments to develop the world’s largest collection of optimization-related experiments and case studies. More than $10 million worth of optimization research is disseminated via our publications, including our free web clinics, MarketingExperiments Journal and blog; this research library is also the foundation of our Sciences division, which produces our optimization training courses and workshops.
Research Partnership Opportunities MarketingExperiments conducts primary research and marketing experiments in partnership with companies around the world. Once the partnership is established, we conduct a thorough analysis of a focus area (a landing page, Google campaign, etc.) and from this analysis we make a series of recommendations. We then plan and execute a series of microtests, to minimize risk while determining the impact of these recommendations. Throughout the process, we measure and track the results to determine their impact on your ROI. If a microtest yields a significant boost, we immediately capitalize on the opportunity. This disciplined approach can help you “break through” certain marketing barriers. The size of the company is not as important as the nature of the research. A typical research engagement lasts about 12 months. During this time the research partner pays the costs associated with the research, including MarketingExperiments hard costs. As your partner our goal is to have the cost of the research be quickly absorbed by an improvement in conversion and/or overall sales. To learn more about research partner opportunities, contact Andy Mott at 904-339-0068 or visit http://www.marketingexperiments.com/partners. www.MarketingExperiments.com
Page 15
How can this guide help you improve ROI? The MarketingExperiments Conversion Sequence was developed by our researchers to facilitate testing and optimization with our research partners. This heuristic device illustrates the relationship between six core principles of the online marketing and sales process (or the buy process). In addition to our partners, many of our students have seen significant gains in ROI after completing our training courses, learning these same conversion principles, and applying this methodology to their own efforts. This primer is designed to introduce you to the essential elements of the MarketingExperiments Conversion Sequence. It also complements many of the case studies, test results, and optimization strategies we share in our training events and publishing initiatives. You can use this primer to: • • • • •
Complement our twice-monthly web clinics Identify strengths and weaknesses in your marketing funnel Provide a source of inspiration for new test ideas Develop and refine optimization strategies with your team, and Improve your marketing ROI
Plus, this guide includes an index of related resources, with links to (free) research briefs and worksheets so you can learn from real test results and make your optimization workflow even more efficient. If you find Optimization Demystified a helpful resource, please share it with colleagues, send us your feedback, and let us know about the results you have seen from using it. In other words, join our community of marketers as we work together to “discover what really works” in optimization. – The MarketingExperiments Team
www.MarketingExperiments.com
Page 2
Table of Contents: Section 1 – Introduction to the Conversion Sequence Section 2 – Clarity of the Value Proposition Section 3 – Motivation of the User Section 4 – Friction Elements of Process Section 5 – Incentive to take an Action Section 6 – Anxiety about Entering Information
Additional Resources About MarketingExperiments Research Partnership Opportunities
www.MarketingExperiments.com
Page 3
Section 1: Introduction
C = 4m + 3v +2(i-f) – 2a ©
The Conversion Sequence is a conceptual tool for understanding and remembering the essential factors that affect website conversion and the relationships among them. Conversion is the process of successfully achieving the primary objective of a specific page or website. Conversion Rate (CR) is the primary measure of conversion and is computed as:
CR% = (#Successes / #Actions) * 100
Conversion rates you might track include: 1. Conversion to Sale 2. Conversion to Email Capture 3. Phase-Level Conversion Phase-Level Conversion Rate can be established for any process or process-subset for which the number of arrivals and number of successes is measurable and meaningful (e.g. completion of forms, clicks on banners)
www.MarketingExperiments.com
Page 4
Section 2: Value Proposition
C = 4m + 3v +2(i-f) – 2a ©
Clarity of the Value Proposition: There are two skills necessary to leverage the power of a value proposition for your landing pages: 1. You need to be able to identify an effective value proposition. 2. You need to be able to express an effective value proposition.
Identifying an Effective Value Proposition Value proposition is the primary reason why a prospect should buy from you. 1. This requires you to differentiate your offer from competitors’. 2. You may match a competitor on every dimension of value except one. 3. In at least one dimension of value you need to excel. 4. In this way you become the best choice for your ideal customer. 5. There is a difference between the value proposition for your company and the value proposition for your product. You must address both. Principles for evaluating a value proposition: 1. A value proposition is not usually determined; it is discovered. It grows out of need. www.MarketingExperiments.com
Page 5
2. Avoid a sales-driven approach to product development. You should develop products for the market. 3. Ask yourself this question: “Why should my ideal prospect (the group you intend to serve) buy from me instead of a competitor?” 4. Compare your answer with the claims of your main competitors. 5. Refine your value proposition until you can articulate it in a single, instantly credible, sentence.
Expressing an Effective Value Proposition Holistic approach: Every element at every step along the buy process must either state or support your value proposition. 1. Congruence - having every element of your page either state the value proposition or support the value proposition. 2. Continuity - Making certain that each step of the buy process either states or supports the value proposition.
www.MarketingExperiments.com
Page 6
Section 3: Motivation
C = 4m + 3v +2(i-f) – 2a © Motivation: 1. Motivation has the highest coefficient in the Conversion Sequence. 2. To understand Motivation, you must look at your channels. 3. The point is to determine the nature and the magnitude of customer desire within a given channel. 4. The best way to accomplish this determination is through development of a Channel Map (see below). Motivation can be thought of in 2 components: 1. The magnitude of the customer’s demand for the product 2. The nature of the customer’s demand for the product – i.e., the reason(s)
Channel Maps
To maximize relevance within your landing pages, you will tie insights from your Channel Map to: 1. The headline of the landing page. 2. The intro/problem text of the landing page. 3. The benefits statement of the landing page. 4. Additional elements such as pictures, sub-headlines, and copy www.MarketingExperiments.com
Page 7
Constructing a Channel Map 1. List Each Channel You can use almost any metrics program and shopping cart program to extract your data. If you do not have all the data, just fill out what is available. The two most important values are the cost of the traffic and the revenue generated from that traffic. Other fields will provide the information for subsequent steps. 2. Rank Each Channel For most businesses, this will mean ranking them by descending profit or descending revenue. Ranking your channels in order of descending performance helps you to identify patterns and to prioritize your channel profiling efforts in steps 3-5, where you will uncover the nature of the demand. 3. Profile Each Channel You will begin by identifying core commonalities among the top-performing channels focusing on the Magnitude and Nature of the channels and customers. Magnitude: Channel types, recency of interaction. Nature: Common demographic attributes. Then, you will use these key insights to develop headlines and key phrases that address these motivations. 4. Track Each Channel Simplify your tracking to essential channel metrics. The objective is to keep this tracking system as simple and easy as possible. 5. Match Each Channel Identify additional channels that match ideal profile. External Discovery: Search within publications, organizations and industry associations for other prospects that possess the same core commonalities of your ideal profile. Internal Discovery: Poll or interview your highly motivated profile customers to find out other channels they use. In this way you discover other access points to the same highly motivated profile group. 6. Optimize Each Channel Maximize relevance within each channel. Relevance is achieved by matching content to the customer. Core commonalities can help you establish high relevance. Use insights from Steps 3 and 5 about the Magnitude and Nature of customer demand to maximize relevance between channels and corresponding landing pages.
www.MarketingExperiments.com
Page 8
Section 4: Friction
C = 4m + 3v +2(i-f) – 2a © Friction is psychological resistance to a given element in the sales process. Friction exists in the mind of the consumer.
Principle 1: One of the most effective ways to increase conversion is to decrease Friction. Indeed, our experiments suggest that there is a disproportionately high return on efforts to reduce Friction. Principle 2: The objective is to minimize not eliminate Friction. If you eliminate all Friction you, necessarily, eliminate the sale. Principle 3: Once Friction has been minimized, you seek to overcome the remaining Friction with incentive.
Common Errors – All Pages 1. Placing too many fields on your landing page forms. You should request no more information than you absolutely need at that stage in process to accomplish the primary objective of the page. 2. Placing primary offer content in the right or left columns of your offer page. These should be reserved for navigation and supporting elements only.
3. Concentrating all of your selling efforts on the offer page. You must “sell” on every page of the order process, right through the confirmation page.
www.MarketingExperiments.com
Page 9
Common Errors – Category Pages 1. Placing too many products on a single page 2. Confusing layout with products organized haphazardly; especially both horizontally and vertically without an immediately obvious pattern 3. Navigation bars that change from page to page in non-intuitive or unconventional ways Common Errors – Product Pages 1. Too many elements concatenated on a single page without navigational references or a natural decision-development flow 2. Call-to-action buttons that are vague or ambiguous (for example, “Submit” or “Continue” instead of “Add to Cart”, “Choose Product Options” or “Buy it Now”) 3. Extra steps or off-page clicks to support the purchase-decision process
www.MarketingExperiments.com
Page 10
Section 5: Incentive
C = 4m + 3v +2(i-f) – 2a © Incentive is an appealing element you introduce to stimulate a desired action. Principle 1: The objective of Incentive is to “tip the balance” of emotional forces from negative (exerted by Friction elements) to positive. Principle 2: Incentives must be tested. There is an “ideal incentive”. Until you find one that gives you a major boost, you must assume you have not yet found the ideal incentive.
www.MarketingExperiments.com
Page 11
Section 6: Anxiety
C = 4m + 3v +2(i-f) – 2a © Anxiety is psychological concern stimulated by a given element in the sales process. 1. Anxiety is more lethal to the close and the buying process than is Friction. 2. Coefficient may be the same but in terms of impact, anxiety has higher impact. 3. While anxiety often is stimulated by a legitimate concern, its degree/impact is often disproportionate to the measure of risk. 4. In practice, this fundamental understanding of the psychological aspects of anxiety calls for over-correction in the buying process. 5. Anxiety is localized in the buy process. It is closely associated with the geography of the page. When mitigating anxiety one must think in regards to the substance and in regard to perception.
Common sources of customer anxiety 1. Quality of service 2. Reliability of the product 3. Credit card security 4. Price
www.MarketingExperiments.com
Page 12
Ways to effect an over-correction External factors (what others say about you) 1. Security seals (HackerSafe) 2. Credibility indicators (BBB, Trust-e) 3. Testimonials (categorized, sequenced, and specific to the cause of anxiety) 4. Third-party ratings (PriceGrabber, Yahoo! store, etc.) Internal factors (what you say about yourself) 1. Copy 2. Language 3. Tone (match tone to buying decision) 4. Personalization 5. Signatures 6. Images, colors and themes (match look and feel to niche) 7. Privacy policy 8. Satisfaction guarantees 9. Contact phone number (reassure that the company is legitimate and you can talk to an actual person)
www.MarketingExperiments.com
Page 13
Additional Resources Use the following links to access examples, case studies and test results, and tools related to elements of the MarketingExperiments Conversion Sequence.
Section 1 – Introduction to Conversion Sequence Clarity Trumps Persuasion
A Clinical Assessment of Landing Pages
Optimizing Offer Pages
Section 2 – Clarity of the Value Proposition Powerful Value Propositions
Value Proposition Worksheet
Powerful Value Propositions II
Section 3 – Motivation of the User Optimizing Headlines and Subject Lines
Optimizing ecommerce Websites
Optimizing PPC Ads
Section 4 – Friction Elements of Process Lessons Learned
Improving Conversion by 162%
Ecommerce Holiday Playbook
Section 5 – Incentive to take an Action B2B Landing Pages
Filling the Pipeline
B2C Landing Pages
Section 6 – Anxiety about Entering Information Email Marketing Tested
Optimizing Site Design
Using Testimonials Effectively
www.MarketingExperiments.com
Page 14
About MarketingExperiments MarketingExperiments was the first internet based research lab to conduct experiments in optimizing sales and marketing processes. Today, with multiple optimization formulas, and with its MarketingExperiments Lab™ technology, MarketingExperiments partners with companies ranging from small businesses to Fortune 50 companies to drive breakthrough discoveries and “discover what really works in optimization.” This has enabled MarketingExperiments to develop the world’s largest collection of optimization-related experiments and case studies. More than $10 million worth of optimization research is disseminated via our publications, including our free web clinics, MarketingExperiments Journal and blog; this research library is also the foundation of our Sciences division, which produces our optimization training courses and workshops.
Research Partnership Opportunities MarketingExperiments conducts primary research and marketing experiments in partnership with companies around the world. Once the partnership is established, we conduct a thorough analysis of a focus area (a landing page, Google campaign, etc.) and from this analysis we make a series of recommendations. We then plan and execute a series of microtests, to minimize risk while determining the impact of these recommendations. Throughout the process, we measure and track the results to determine their impact on your ROI. If a microtest yields a significant boost, we immediately capitalize on the opportunity. This disciplined approach can help you “break through” certain marketing barriers. The size of the company is not as important as the nature of the research. A typical research engagement lasts about 12 months. During this time the research partner pays the costs associated with the research, including MarketingExperiments hard costs. As your partner our goal is to have the cost of the research be quickly absorbed by an improvement in conversion and/or overall sales. To learn more about research partner opportunities, contact Andy Mott at 904-339-0068 or visit http://www.marketingexperiments.com/partners. www.MarketingExperiments.com
Page 15
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