Conversion optimization is among the best in terms of ROI ways to extract additional value from organization's digital properties. It can be used across multiple channels: web, mobile, email marketing and can work especially well for online retail/e-commerce and campaign.
This presentation covers basics of conversion optimization:
- Why and when should you bother;
- A/B testing,
- Multivariate testing,
- Segmentation and targeting
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Conversion optimization basics: how to extract more value online
1. How to extract more value online
using conversion optimization
A/B testing, multivariate testing, segmentation and targeting
2. Agenda
Intro: why bother about conversion optimization?
Testing
A/B testing
Multivariate testing
Segmentation and targeting
Conclusion
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Created by Alexander Levashov, 21 Nov 2013
3. Intro
Value
Ways to extract it
Conversion
How conversion can be improved
Sample results
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Created by Alexander Levashov, 21 Nov 2013
4. Meet Daniel
E-commerce manager in
ASX200 business (retail)
Responsible for online
business
His duty is to improve both
top and bottom lines of the
online business
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Created by Alexander Levashov, 21 Nov 2013
5. Value
For commercial organizations value means money
Fundamentally there are 2 ways to get more value
Sell more units
Get better margin
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To more customers
More units per customer
Sell for higher prices
Have lower expenses (cost per unit)
Created by Alexander Levashov, 21 Nov 2013
6. What Daniel can do?
Bring more new
customers to online
store
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Created by Alexander Levashov, 21 Nov 2013
7. What Daniel can do?
Increase prices
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Created by Alexander Levashov, 21 Nov 2013
8. What Daniel can do?
Extract more value from
existing flow of prospects
and customers and
current prices
Conversion
optimization – get
more sales (or other
target actions) per
100 visitors
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Created by Alexander Levashov, 21 Nov 2013
9. How can we increase conversion?
Give more value to customers
Discounts/specials
Better customer service
Longer warranty
Unique product range
Etc
Make a purchase easier for them
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Faster website load
Support of multiple devices
Better content and UX
More relevant offers
Created by Alexander Levashov, 21 Nov 2013
10. Sample calculation
Conversion
Visits per day
Sales per day, number
Baseline
2%
Optimized
2.25%
100,000
2,000
100,000
2,250
Average sale, $
$100
$100
Revenue per day, $
$200,000
$225,000
Revenue per month
$6,000,000
$6,750,000
Change, $ per month
+ $750,000
Not bad, especially if the cost associated with that
increase is several thousand $$$ - good ROI
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Created by Alexander Levashov, 21 Nov 2013
11. Daniel is happy as well as his boss
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Created by Alexander Levashov, 21 Nov 2013
13. Why test?
WITHOUT TESTING, OPINIONS ARE JUST THAT—OPINIONS.
ONLY WITH TESTING CAN YOU REALLY KNOW WHAT DRIVES
RESULTS.
“Testing your content is like a license to print money.”
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Created by Alexander Levashov, 21 Nov 2013
14. Testing process
Select what
to test
Select the
winner
Review
control
Review
results
Make
hypothesis
Test
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Prepare
challenging
versions
Created by Alexander Levashov, 21 Nov 2013
15. A/B testing
In A/B test we change one element of the page
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Created by Alexander Levashov, 21 Nov 2013
16. A/B testing example
Original (control) version
New, challenger version
Sample of A/B test – we change branding graphic only
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Created by Alexander Levashov, 21 Nov 2013
17. A/B testing example: implementation
50
%
50
%
All
traffic
Original (control) version (A)
New, challenger version (B)
Next
step
We send a share of traffic to challenger version, keep rest with original version and compare
conversion (in our example case it can be click-through rate)
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Created by Alexander Levashov, 21 Nov 2013
19. Multivariate testing example
2 variations of header/logo
3 variations of headline
2 variations of branding graphic
5 variations of text copy
2 variations of form
2 variations of main call-to-action button
In this example the total number of combinations will
be 2x3x3x5x2x2 = 360
Hardly possible to do multivariate testing manually, a special software
is required
Note: good MVT tool does not need to run every possible combination
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Created by Alexander Levashov, 21 Nov 2013
22. Testing do’s and don’ts
Make sure that you have enough traffic and time
Choose number of combinations wisely
Preview combinations
Keep control variation in testing
Measure right things
Test again
It's fine to celebrate success but it is more important
to heed the lessons of failure.
Bill Gates
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Created by Alexander Levashov, 21 Nov 2013
23. Segmentation and targeting
What is segmentation
Segmentation as a part of conversion optimization
Approach to segmentation
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Created by Alexander Levashov, 21 Nov 2013
24. Definition of Market Segmentation
Segmentation is a marketing term referring to the
aggregating of prospective buyers into groups
(segments) that have common needs and will
respond similarly to a marketing action.
Segmentation criteria:
1) Homogeneity (common needs within segment)
2) Distinction (unique from other groups)
3) Reaction (similar response to market)
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Created by Alexander Levashov, 21 Nov 2013
25. Definition of Market Segmentation
Webtrends’ definition:
Segmentation is an ability to identify high-opportunity
customer groups within your marketplace.
Why use segmentation?
To increase sales, uncover new opportunities and
improve customer retention.
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Created by Alexander Levashov, 21 Nov 2013
27. Segmentation in conversion optimization
General marketing
segmentation
Digital
segment
Digital
segment
―Digital‖
segmentation
Digital
segment
Digital
segment
Digital
segment
Digital segmentation is specific: you can target more segments than with traditional marketing.
Example: people who spent 10 minutes on product description page in motobikes category
People who abandoned shopping cart, but returned to your online store
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28. Approach to segmentation and targeting as
a part of conversion optimization
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29. Conclusion
Conversion optimization is a good way to extract
additional value for your business and provides good
ROI if done in right way.
Where to start? Try landing page A/B testing, it is the
easiest way to test the water and build a case for
your organization stakeholders.
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Created by Alexander Levashov, 21 Nov 2013
30. That is it!
Thank you for your attention!
Contacts:
Alexander Levashov
Email: alex@levashov.biz
Phone: +61 (0) 401 744597
Skype: altima-interactive
LinkedIn - http://au.linkedin.com/in/alevashov/
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Created by Alexander Levashov, 21 Nov 2013
Notes de l'éditeur
For example, an athletic footwear company might have market segments for basketball players and long-distance runners. As distinct groups, basketball players and long-distance runners will respond to very different advertisements.
Geographic• Region of the country• Urban or ruralDemographic• Age, sex, family size• Income, occupation, education• Religion, race, nationalityPsychographic• Social class• Lifestyle type• Personality typeBehavioural• Product usage - e.g. light, medium ,heavy users• Brand loyalty: none, medium, high • Type of user (e.g. with meals, special occasions)