Never Miss a Beat - Get Updates Direct to Your Inbox
Conversion Strategy for E-Commerce Businesses: Convert Your Visitors to Buyers
I don’t think there is a topic we’re more passionate yet equally in the dark about as CRO. For every dollar a business spends on Conversion Rate Optimization (CRO) they get nine back – which is a staggering statistic. You immediately see ROI if you use a CRO expert who is good at what they do. There is an entire user journey that happens with CRO, and those businesses that embark on the journey can massively grow their business quickly.
Jon MacDonald is the CEO and founder of The Good, a Conversion Rate Optimization firm. The Good uses data science to help brands turn their traffic into customers by tracking everything on their site and using the data they collect to come up with solutions for growth. Some of the world’s largest companies convert their website visitors into buyers through their services. Jon is here to talk to about this little known powerhouse toolkit for both buyer and sellers.
- What Jon looks at before starting a CRO project for a client.
- Where CRO fits in for buyers and sellers in the e-commerce space.
- The four key areas of data to be looking at to optimize e-commerce conversions.
- Why CRO gets ignored so often.
- Helpful dashboard elements for the three types of online businesses: e-commerce, SaaS, content-based sites and how those elements improve business.
- How microgoals can add incrementally change your flow.
- What CRO advice Jon has for someone who may be getting ready to sell a business.
- Where The Good gets their information and what they do with it.
- AB testing tools Jon recommends for a new business owner getting started.
- How much time an entrepreneur should spend studying and preparing for a good CRO approach.
- How CRO practice can increase asset value exponentially for sellers and buyers.
- The benefit of working with an outsourced CRO team.
Joe: Mark, one of the things that we see happen often is people—we go to these events that we sponsor, meet some amazing entrepreneurs, and sometimes in little pockets of them you hear people talking about their top line revenue. It’s really not what the focus should be. In many cases, it should be about their gross profit, their processes, and what they do to optimize and maximize their bottom line revenue. Because ultimately that’s what the value of these businesses are based on. And as I understand you had Jon MacDonald on from The Good talking about CRO; Conversion Rate Optimization and how important it is to drive that up and what a great return on investment that can be.
Mark: Yeah, that’s right. I don’t think that there’s a topic I’m more passionate about yet equally horrible at than I am CRO; Conversion Rate Optimization. It’s such a phenomenal field and when we look at what you can do using CRO techniques and methodology with a business it’s rather remarkable. In fact, Jon quoted me a statistic in here that for every dollar a business invests in conversion rate optimization on average they get $9 back which is really, really amazing. I know that in the past I’ve hired a conversion rate optimization expert. And they cost a lot of money, right? So I was paying out I think like $2,000 a month. But you know what the first thing they did was? They saved me like $6,000 a month in advertising costs.
Joe: That’s incredible.
Mark: I mean it’s a net win. You’re immediately seeing an ROI if you have somebody good at what they do. And when we think about CRO oftentimes we think okay we’re going to change the color of this button bar, we’re going to change the title on this, we’re going to increase our sign-ups. What Jon and I talked about quite a bit more is the fact that CRO is much, much bigger than this. There is an entire customer journey, there’s an entire user journey here, and there are all sorts of points along the way where this journey can be optimized and can be made more efficient for our clients. I know I’ve talked to clients in the past who have grown businesses massively by just spending literally years doing this and their traffic doesn’t substantially change. But their revenue changes and their bottom line earnings change as well. It’s a discipline that most of us ignore; low hanging fruit for almost all of our businesses. We should be doing it. Jon and I got to talk about some of the methodologies that you need to implement in order to really get going with some CRO optimization of any business for that matter.
Joe: I think it’s going to be a fascinating podcast. I’m going to listen to it myself. Before we jump to that folks be sure to tell us what the movie quote is. Send us a note so we can give you a shout out on the podcast. Alright, let’s jump to it.
Mark: Jon thanks so much for joining me.
Jon: Thanks for having me. I really appreciate it.
Mark: If you could can you provide a quick background on yourself to all the listeners?
Jon: Sure. So I am CEO and founder of The Good. We are a conversion rate optimization firm. Now what that means is we help brands to convert more of their existing website traffic into customers. So we do that through data science. Helping brands to track every click and movement that’s happening on their site and using that data to understand where people are dropping off in the process, why they’re not converting, what’s engaging and not being engaged with, and how to solve those problems.
Mark: That’s great. CRO is something of a—I wouldn’t say a hobby of mine, I’m not very good at it but it’s something that I’m fascinated by. I love the idea of being able to grow and sometimes pretty significantly grow a business without adding more traffic and scrapping forward for that more traffic but basically by improving that customer experience to the point where everything just kind of smoothens out and it just opens up more traffic internally but with the revenue of course; the conversions and everything else. Now in my understanding with your firm you guys have done some work with private equity firms as well that are coming into an acquisition of a web-based company and want to find some of those opportunities. Can you talk a little bit about that and maybe some of the scenarios that you’ve looked at there?
Jon: Yeah. So typically when you’re buying an e-com company the first thing you’re looking to do is optimize the return on the investment you’ve just made. And that’s why a lot of folks end up with us. Typically these brands have a lot of traffic coming in already. They’re spending a bunch of money to drive traffic to the site but perhaps that’s just not converting at the level they’d liked or they’re not seeing as high of a ROAs or return on ad spend as they would like to see and they see that that’s an opportunity for optimization. And that’s typically how we end up starting those conversations. It’s not unfamiliar with us. A few brands we’ve worked with have increased their conversion rates, gotten their ROIs up and then made an exit right after. So it happens on both sides. Brands who are looking to make a purchase and or have made a purchase come into us to help them to kind of optimize a little bit and then also companies who are looking to improve their site and optimize it as they get ready to sell and want to increase the value of their company.
Mark: I often think that the CRO portion of a marketing mix is one of the items I think it’s ignored the most often and is often one of the lowest bits of hanging fruit. And one of the things I think people forget about; I forget about it myself but CRO actually has kind of a double whammy effect for you, right? I ran an experiment on another business that I owned outside of Quiet Light Brokerage for getting people to sign up and I know my numbers pretty well. I know that every person that signs up even though they’re signing up for free the value of that client is about $10, right. So I said okay I want to increase these free sign-ups more. But the result was I did increase the sign-ups, I did increase that conversion rate pretty significantly but the other benefit of that is that my cost of acquisition dropped. So not only was I getting more out of what was being sent to me but my advertising dollars dropped at the same time. And so I had this double effect of seeing an increase in my ROIs on both sides just from focusing on one thing. When you’re talking to somebody who is preparing to sell; let’s say it’s an e-commerce business, what are some of the areas that you start to look to see where can you—what are you sort of tracking at a CRO project?
Jon: Well, the first thing is are they tracking the right data? True conversion optimization should not be about going down a checklist of best practices. You can find those and Google those online and I can tell you that really the most effective way to optimize a site is to base it on every click and movement of your specific sites visitors and to make data back decisions on those actions that are being taken. So the best way to do that is to make sure you’re tracking the right data. Now, of course, you want to follow GDPR and all of the other privacy regulations that are in place. So all the types of data that you really should be tracking are done in aggregate meaning it’s not personally identifiable information. And really you don’t need personal identifiable information. But there are really four key areas of data that you should be looking at. The first of course is Analytics. If you’re looking to sell you’re likely going to have Analytics and the buyer is likely going to dive into those Analytics. So if you’re looking at something like Google Analytics out of the box let’s be honest here it’s meant to help you buy more Google Ads. So it’s not that helpful in terms of optimizing your site. Now the best way to do that is to build some dashboards in Google Analytics that are more focused on conversions. And also make sure that you’re tracking the right events on your site to get that data in. So that’s one of the first places we look. The second pieces of data are interactions on your site in terms of content. So looking at things like heat maps; where are mouse movements happening around the site, click maps where are people clicking on a page, perhaps they’re often—we almost always find that people are clicking on things that aren’t clickable, and that’s a good indicator that they should be. So it could be as simple as that. You know we also want to look at scroll maps; how far down the page are they going. We do eye tracking as well to understand what people are looking at and how long they’re looking at that content. Lastly—well third I should say you want to do what’s called user testing. So we’ve just talked about all these quantitative pieces of data that really tell you what people are doing. But it’s really hard to get the why behind that from all of that data we just talked about. So user testing comes in and helps us understand why. Now, this is where we send people to the site who match the ideal customer profile and we ask them to complete tasks. And while they’re completing those tasks we are recording their screen and their audio and we also have trained these people ahead of time to talk out loud about the experience that they’re having. So they’re going through a site and they’re saying hey I’m trying to find this page and I can’t find it in the navigation or understand how to get to that content that I’m looking for, I don’t understand what the value proposition is here, or just common struggles that they might be having. And that really kind of coincides with the numerical data to tell us not only what they’ve done but also why they’re doing that and it gives us some context behind that. And we really we do what’s called remote unmoderated user testing. And what that is is a software tool we use usertesting.com most often. And what that means is it’s a piece of software that lives on their home computer that allows us to collect all this data so they can do it in the comfort of their own environment as opposed to somebody standing over their shoulder. Now we’ve done both. We’ve been optimizing sites for over 10 years now and we’ve done both. And what we found is that we get much better data when its remote unmoderated. The people are comfortable and they don’t feel pressure to come up with something on the spot and always be telling us what they’re thinking. We just find it naturally happens when it’s remote and unmoderated. So that works a lot better. The last piece of data is A-B testing or multivariate testing. This is where you say you have 100 people coming to a site, you can segment those visitors and show 50 the current version of a page or even small change on the site, maybe moving content around on a page, or adjusting some headlines things of that sort. And then you would show 50 the alternate page and you test some metrics out of that to understand which one is doing better; the page that exists or the changes that have been made. And we can get really large tests like changing entire pages or we can go really, really small like just changing one headline and seeing what the differences would be and then stacking a lot of those tests and the variations of those tests to truly understand how to optimize each step of that funnel again based on data. So instead of just guessing and launching those changes with this piece of data you’re actually letting the consumer’s actions, your specific sites visitor’s actions and tell you what should be done to permanently change on your site.
Mark: Okay. So I think that explanation was just great. I love the framework that you set up here but I think you just explained why CRO gets ignored so often. And that is there is a lot of stuff to set up here and to configure and I just let’s start right at the beginning with Analytics. You’re right right out of the box how useful is Analytics. It’s interesting. You get to see how many people are coming to your site. You can see what pages are popular and some decent information out of the gate. But really Analytics starts to blossom when you start building dashboards and segments and everything else. But getting into that; I mean that’s kind of a discipline in and of itself.
Jon: Of course.
Mark: I know we could probably talk about this all day and different dashboards for different types of businesses, what are some things that are some useful elements with a dashboard that somebody might want to consider building? And I want to break this up into maybe three different types of sites. And if you don’t work with any of these types of sites that’s fine, just let me know. But e-commerce would be one, SaaS would be another, and then content-based sites that are really looking more for that user engagement and reading and how much are they digesting the information. So what are some dashboards that you would recommend people look into for each of these?
Jon: Well, there’s a couple built into Google Analytics that get ignored pretty quickly. On all three of these sites it would be helpful. But the first is page flow. What is the flow that people are taking through the site? And most people ignore this because in Google Analytics the view is one where it shows the funnels but then has lines drawn between them and it looks extremely complicated at first. So most people see that, they get overwhelmed, and they leave and don’t really pay attention to the data. But there’s so much rich data there you can dive into. And you don’t have to do anything other than have the snippet on your site. So it’s not requiring you to set anything else up necessarily. So that’s a great place to start. For e-com businesses we often find one tidbit; a lot of companies no matter what their size is when they first come to us one of the first things we always check is do they have the e-commerce tracking engaged. It’s one button to turn on and off. So many brands don’t have that turned on and they lose so much rich data that Google automatically starts sorting through and looking for. So for e-com just having that turned on could be amazing. And it’s so easy. Now in terms of metrics that we’re looking for on e-commerce conversion rate in terms of to purchase but also what are the other metrics that you’re looking for? We call them micro conversions; things that you know people are doing that influence that purchase. Is it signing up for an email? Is it where they visit certain pages on your site? So we know that if they are visiting or even just like a great instance of this is if they’re visiting a product detail page but then they click to read more of the user reviews. That’s always a great indicator because what we find is consumers who read reviews convert much higher. Because often consumers are going to trust the content that’s in reviews much more than what the brand even says about their products because it’s coming from people like them. They also; for a clothing site for instance or shoe site, it’s really helpful because they will use that to better understand sizing, especially relative sizing. So a medium runs a little larger you’re probably going to want a small things of that sort. That’s really, really helpful for people who are really there to dive deeper and answer specific questions that are all buying questions.
Mark: Let me stop you on that real quick because let’s say that you start measuring these micro goals. What does that give you? I mean I would imagine a lot of the people that are taking those actions already have a high user intent.
Mark: In my head I’m thinking okay let’s say sizing options, you said I want to increase the number of micro-goals of people checking out the different sizing options. Does that really increase each individual user’s intent or you’re really just more making the flow easier for those that are already there?
Jon: Both. If you’re finding that out of 100 visitors that 50 of them are looking at sizing and of that 50, 25 convert you really want to try to influence that metric. So if you know that people are looking for sizing then make that information surface at higher so it’s easier to find. Now people only visit websites for two reasons. This is outside of Facebook or anywhere that you’re just trying to maybe perhaps spend some time; kill some time. Now they are there because they have a pain or a need and they think that your website can help solve that pain or need. And two once they realize that it can or they believe that it can, they want to do research on how to convert as quickly and easily as possible. And that means that they’ve done that research and now they’re ready to purchase. So you need to make those two things as easy to do as possible. Now it sounds pretty simplistic but understanding as you go deeper on those what people are looking to research and then surfacing that information as high as possible is really important. So making that as easy to find and do that research. So if you know that people who convert always are looking for sizing information but they have to go into the reviews to find it. That’s a problem. So instead make it easier for people to understand what size they should wear. And if that’s the case they’re going to convert much easier. And then when they’re ready to convert it’ll make that checkout flow, that conversion process as easy as possible. And when you look at lead generation sites which is the second one of this one that you’ve mentioned, it’s the same thing with form completions. We often work with companies who have made it very easy for somebody to come to the site and do research about what particular products or offering that that company has that aligns with their need. But we also see at times the consumers come to the site and they’re looking at the home page and the value proposition is not clearly stated. And so how many times have you been to a B2B service page website and you look at it and you said I have no idea what these people do. So that can be a big challenge; just understanding is the consumer in the right place and allowing them to do that research. But then once they get to the form they’re asking for a ton of information that isn’t really necessary at that first step. So they might be asking how many employees do you have, or what industry are you in; all these things that could have been filtered prior to them filling out a form by just saying this product is best for people who have this many employees, this much revenue, this industry, and things of that sort. So trying to help people understand if they’re in the right place and how to convert as quickly and easily as possible can apply to both e-com and lead gen.
Mark: That’s helpful. Let’s go on to one of the other ones here and that’s the scroll maps and click data. A, where do you get this sort of information? Do you have any servers that you recommend? And then B, once you get in what do you do with this information once you start to get it?
Jon: Yeah. So Hotjar is likely your best fit. Now there are tons of different heat mapping softwares out there right now. Crazy Egg is another good one. There’s a few of us who—we find Hotjar has the most reliable data and also for the cost has the best benefits. So I believe it’s about $9 a month and it’s totally worth the data you get back for $9; easily a large return on your investment there. Now, what should you do with that data? Well, Hotjar will let you track again all the mass movements that happen on your site and give you a heat map of those. Now for those people who aren’t familiar with the heat map it just shows you from red to—and then cools off from there; so red, yellow, green, blue, and then the lack of colors where people didn’t use their mouse at all on a page. So it allows you to really look at that and say where are people interacting. Now, a quick tidbit on this; on desktop, your eye will follow your cursor. So heat mapping is not so much about the cursor movement as it is about a good indicator of where people are looking and what they’re engaging with on your page. Understanding just where a cursor is going on a page is not as helpful. So that’s a better way we think to look at it is what content are people engaging with. And that’s what’s really helpful there. Now, what can you do with that data? Perhaps you find that there is a piece of data that you had found earlier that people really engage with every single time they purchase. Well it’s really helpful to surface that content up higher on the page and then track whether or not people are engaging with that over time; so testing that by understanding what content to engage and moving that content to a different area of the page and then looking at the heat map to see if it’s being engaged with.
Mark: So let’s move on then to A-B testing and this is a personal pet peeve of mine because all the tools out there just feel—at least that I’ve used feel expensive and kind of shoddy and maybe I’m not using them right. Are there tools that you particularly recommend? What do you think about let’s say Google Optimize as a free option there? And we’ll start with that. I would also like to get into setting up experiments that actually make sense.
Jon: Right, of course.
Mark: Let’s talk first about the tools.
Jon: So there are a numerous number of tools for optimization as you mentioned. It’s pretty common now to try to sell a whole optimization platform; so one tool that can do everything. The great thing about Google Optimize is that it doesn’t do that. It focuses just on running those tests. And it also integrates extremely well with Analytics so you can pull segments out of Analytics that you’ve set up and run tests just for those segments. Now it is free and it does have some limitations in the sense that you can run a limited number of tests at the same time. There are some ways to get around that. I would be happy to chat about that with anybody at some point but really the idea here is Google Optimize has come a really long way over the past year. It has in terms of pure testing the same functionality as a platform like VWO or Visual Website Optimizer which is another one that I would tend to recommend if you want to get over the number of tests limit that Optimize has VWO is a great tool. It works extremely well for the testing side. It has a whole bunch of other functionality that at The Good we don’t typically use. But if you’re looking for a full platform it could be okay. And then if you’re in the enterprise space Optimizely is really the gold standard. They were the first really solid tool. They made a shift about two years ago to focus exclusively on the enterprise side. So we still have some clients that are on their legacy plans from five to six years ago that are paying 200 bucks a month. They don’t offer anything like that anymore. It’s now probably closer to 10,000 a month just for their platform. But if you are looking to optimize every experience; your mobile experience, and your app experience, and your desktop or web experience as well Optimizely is really where you’d want to play. But you need to have the budget and the traffic levels especially. This is another thing and I think most companies tend to want to jump into running testing but they don’t have enough traffic to do it. And they sign up for something like VWO and start paying the fees for the platform and they aren’t seeing the results very quickly. That’s where it can get frustrating. You really need to make sure you have enough traffic to be able to see statistically significant results in a meaningful timeframe to get the return on that investment.
Mark: What would you recommend for sites that have low traffic amounts?
Jon: I would recommend playing around with Google Optimize but running bigger tests. So what do I mean by bigger tests? Try changing an entire page content; don’t just change one piece of content on a page. So the bigger the test the quicker you’re typically going to see some results positive or negative. Now it’s hard to get fine-grained but testing even bigger tests like that you will see increases in the key metrics that you should be tracking like conversion rate, average order value, things of that sort that really are going to drive impactful meaningful improvement for your brand.
Mark: Yeah, that’s great. I’ve noticed the same thing in the testing that I’ve done there where—and this leads to the next segment that I wanted to talk about that and that is saying that meaningful tests where the whole sale page changes. I just ran a test on another business I own where we did a whole sale page difference and the lift was significant. It was almost definitely the conversion rate on a completely different page design. When you’re setting up a new test especially if you’re coming in cold and say that you bought a business and you’re now working on different ways to be able to grow that business that you just acquired, where are some places that you would typically start with testing? Let’s assume that there is enough traffic there to be able to run more of this fine-grained sort of tests. Would you recommend some of these bigger tests to begin with or maybe a more nuanced approach?
Jon: I would typically recommend a little more nuanced approach that is based on the results from that user testing. So by starting; I mentioned four areas and I mentioned the A-B testing last because the other three are really going to help you determine what you should be testing. And that’s almost as important as running tests at all. So if you are going; there are so many brands that we see that just sign up for these platforms to run tests and start running tests and they just randomly cherry pick ideas to run but they don’t have any hypotheses behind them or data to back those up. So really again understanding the data has to come first so that you can make some data back decisions about what to test. Now, what’s going to be impactful? I’ll tell you that if you start reading general articles online about testing the first thing they’re going to say is things like button colors, or maybe a headline change, or image change. Those very rarely actually move the needle. So you need to find that balance between a whole site or a page change and changing one small element on the page because it’s in the middle where you’re really going to see the results. But also the best way to be thinking about this is the testing needs to be a three or six-month plan. So that doesn’t mean that you should expect one test to run that long but you should be thinking okay I’m running this test to make what learning do I want out of that test; positive or negative change? That’s fine but you should always be learning something. In fact when a test doesn’t have the outcome that we want here at The Good or that we were expecting I should say we don’t call it a failure; we call it a learner. Because we’re always learning something out of that. That will influence what the next test is that we want to run. And then you continue to stair step that. Conversion optimization should really be thought of as an iterative compounding effect over time. There’s nothing that you’re going to change on your site that is going to double your conversion rate overnight short of massive discounting. And I just call that margin drain. That’s not an optimization. So you really want to be thinking about this in small incremental gains. That each test is going to help you get that will have a compounding effect over those three to six months. And so impactful tests are ones that you know are building the foundation for a larger change that you would like to see.
Mark: Talking to about this it seems so clear that you’re setting this up into almost two distinct steps, right? The bulk of what you suggest of these four suggestions really relies and rests first on having good data and a good data framework for understanding your site and your business and knowing what sort of metrics you want. And once those metrics are set up then you can take a look and say okay well let’s look at this or what would happen if we were to change this micro goal? Does this micro goal really have a correlation with revenue or is it just something that we’re kind of seeing right now? Maybe there is no correlative effect. Maybe we can increase a micro goal and it doesn’t change anything at all. But I think the challenge then becomes not necessarily how do you run a really great A-B test but how do you set up a really good framework of data and data collection and those dashboards as well. What advice would you give to an entrepreneur who’s thinking about their business and saying okay I know I need to get data on my business, I know I have Analytics set up maybe I turn on the e-commerce tracking but I’ve not ever created segments. I don’t really know how to use segments; 10,000-foot view, what’s a way that we can instruct the entrepreneur here to just start understanding what they need to start setting up for a good data framework?
Jon: Well I mentioned the other three areas besides A-B testing and you don’t have to go super deep on those. I know there’s—you could. As you mentioned earlier we could spend a whole hour just talking about each of those individually perhaps. I think you need to start somewhere but just having that data tracking in place and then paying attention to it; look at it once a week spend; set an hour side on your calendar, just spend an hour once a week looking at that data. You will start to see trends. You will start to see things that help you to better understand how people are engaging with your website. And just giving that that hour per week will put you miles ahead of the competition because you’re going to start to see those trends and the actions that people are taking on your site. And you’ll start to have empathy for how they use your site. Now I often like to say that it’s really hard to read the label from inside the jar. So many site owners or brands or e-com managers what they do is they build the site and all the content and the navigation for them because they know the product. But what happens if somebody comes in via Google to search in a topic. Google thought that site might be the best answer they send them there. They’re missing all of that knowledge about the products they sell. So when they go to the navigation and if it’s not set up appropriately the consumer has no idea what they’re looking at or how to figure out what product is the best one for them. So that’s another way that user testing can really kind of help. It’s brief empathy for the end user and helps you see it from that perspective as opposed to somebody who built the site or is on the site every single day. So I think two things; one, just have the data and look at it and you’ll start to build up that empathy. And that’s really going to help you understand what you should test and where you should go from there. Then secondly you can really start to dive deeper. You can then say oh I want to run scroll tracking on these pages because I’m finding that people aren’t reading this type of content that’s further down the page and I want to verify that. So you start to post questions. It’s not about the data; it’s really about asking the right questions once you have that data in place.
Mark: You’re echoing exactly what I heard at Traffic & Conversion this past year. I went to a CRO talk and one of the bits of advice that he gave was to start with the questions that you want answered because then the reports will build themselves. If your question is how many people are signing up for this email list and then taking a second action well now you know the report that you need to build there is a report that shows just that information. The other thing that you’re saying that I think is fantastic and this is the trend in marketing in 2019 and frankly it started I think as early as 2017 and has been building steam and that is this personalization; both of the user experience but also in the way that we think as far as marketers and the internet is no longer just a big cold faceless place. Let’s start putting a face to those numbers that we’re seeing in Analytics and understand those are real people, real eyeballs and what is their experience like. And what you said you have some empathy for the user and what they’re going through because then you can start asking those questions and building the reports. And then once you build the reports, you’ve answered the questions, now you can start forming the thesis of okay this is what we’re seeing as far as the answer to this question. Now finally once we get all this in place lets A-B test. Does that summarize it?
Jon: Yes; very, very well.
Mark: Awesome. Alright, let’s talk about wins.
Mark: I could do your job.
Jon: I’m looking forward to it.
Mark: I know that for a fact. Let’s talk about wins. Let’s talk about some of the—without getting and divulging clients or anything like that, let’s talk about this is what you want to put on your site as far as the testimonial because it’s eye-popping and then also the realistic sort of wins that you would see say over six to 12 months from a CRO campaign.
Jon: Yeah. You know on average we see about a 9:1 return on investment. So for every dollar that’s put into conversion optimization on average, you’re going to see about a $9 increase in revenue. Now there is not one single metric that you can do that’s going to have a bigger impact on your site than focusing on conversions. But I think the industry of conversion rate optimization gets shoehorned often into that one factor which is conversion. We’ve talked about a lot of different metrics today that really need to be improved and optimized and that all goes back into conversion optimization as a whole. Of course, average order value, cart abandonment rate, we talked a lot about ROAs and return on investment of ad spend. I think in a lot of that is what needs to happen there. Now specific wins, I have a bunch of case studies up on our site. They’re public so I’m happy to talk about some of those. For instance, Easton Baseball; if you don’t know who Easton Baseball is they make aluminum baseball bats mainly and softball bats. About 99% of college swings are done with an Easton baseball bat. They pretty much own baseball bats for Little League. And if you’re a Little League player you’re going to use one of their bats. Now, having empathy for the consumer; what we found when we came into their site was you go to their product page and it would be a wall of bats. Now if you imagine what a bat looks like online and you see a whole bunch of them. You have no idea what the differences are, right? And they’re just maybe different colors but you really don’t know because you can’t feel the weight difference or really see how the size differences of the bats online that well. And especially if you’re a parent with a kid in Little League, you have no idea what bat you should be buying. And we did a bunch of user research and what we found was that consumers were coming to the site to buy a bat for their kid and they would buy the bat take it to practice and had spent a couple of hundred dollars on this bat and then the umpire tells them they’re not allowed to swing with that bat. Now the reason is that all these different Little Leagues have certifications for their bats and if their bat does not have that certification stamp on it you can’t use it. Also, either your kid swings for the fences or he’s just trying to get on base. And there are different types of hitters, and different bats fit with different types of hitters. There are also different price points that parents want to spend. So there’s some that might want to spend $100, some are willing to spend 500. It really varies. Using just those three metrics what we found was that so many parents are buying the wrong bats that they were getting frustrated and there was a high return rate. They were calling customer service quite a bit. Well, what we did after learning all of that is we built up bat finder. So instead of having parents navigate through all these bats and look at all of them and spend time trying to figure that out, they simply just answer three questions and those three questions kicked out three or four bats for them. And so these are the ones you should really look at. Now once you got to those bat pages they often had; Easton had put in a ton of technical terms that were branded around what the bats did. So I can’t remember the names exactly but instead of just saying this bat reduces sting because with an aluminum bat if you hit it really well and you’re hitting for the fences you can sting your hands really bad. And Easton has some wonderful technology that eliminated that bat sting and still let you get the great pop of the bat to hit it over the fence for a home run. Well, what we found was they had branded that term instead of just saying it reduces bat sting they came up with some random term for that. And consumers didn’t know what it meant. So we helped them solve that problem. And that was found through user testing and just having empathy for what the consumer is going through. So we fixed those two things on their site and they saw over 600% increase in revenue year over year and their conversion rates skyrocketed. I think it was 187%. And you know when you think about it just having a little bit of empathy and making those two small changes can have such a big impact. And that’s really what conversion rate is about. It’s understanding what people are doing, what they’re not doing, and how they’re engaging, and using that data to then inform what should be changed and tested on a site.
Mark: Yeah. And just to put this in terms of acquisitions; bringing it back to really the subject of this podcast here, I want people to think about this in terms of what I mentioned earlier on the podcast. If you’re seeing a 600% increase in your revenue which is phenomenal you’re also seeing a reduction in your cost of advertising to acquire a client which means your bottom line margin is actually probably improving more than that 600%. And that’s an assumption on my part. But let’s for the sake of argument just say that it also is increasing by 600% at a minimum, it might be even increasing more. And now you’re taking the multiple approach of maybe for an e-commerce business 3, 3.5, maybe 4 and you can start seeing how much you’re growing the asset value of a business that you own; maybe you acquired or you’re preparing to sell. You are seeing significant gains in that asset value of what you’re hanging onto to the point where the numbers really become kind of silly to even say it because it doesn’t sound believable. But that’s the low hanging fruit of CRO is the money that you said 9:1 investment to payback ratio. That’s phenomenal and for preparing to sell or buying and trying to grow a business asset value you’re not only getting that 9:1 you’re getting the multiple on top of that as well. That’s phenomenal.
Jon: Yeah. And I’ve specifically mentioned Easton because it’s a public knowledge but after about 18 months to two years after we helped them optimize their site and then moved in and help them optimize their mobile as well for even larger gains there they did sell to another private equity firm and had a very good return on their investment there overall and that was almost entirely fueled by the digital side and the effort they’d all put in there.
Mark: That’s awesome. Where can people learn more about you and more about your company?
Jon: Sure. Yeah. So The Good you can find us online at TheGood.com. That’s just TheGood.com and you can sign up for our insights there. So if you liked a lot of the tidbits and helpful tactics I talked about today we do produce one great article per week about learning. There are no sales pitches involved it’s truly just educational content about conversion optimization; things that you can take home and do to your site and start thinking in this way. We fully recognize that it is really hard for one person to have all of the skill sets at their company to do conversion optimization. I think you talked about this earlier when you said hey you just mentioned all these things and that’s the challenge most people have around optimization. It’s true. It’s really hard for one person to do all of that. And so we try to help educate as much as we can around all of this type of things. But TheGood.com is the best way to get a hold of us. Feel free to email me directly if you have questions. I’m happy to answer questions that come my way it’s just [email protected]. And I do try to read and respond to every email. So I will do my best.
Mark: Yeah. That’s great. And as far as the task list, I mean you’re exactly right. The fact is CRO is a mix of being somewhat of a data scientist and there’s also a technical side to it as well being able to get all the integrations right and then there’s also the creative side as well to understand how to really understand the user testing and how that empathy and then be creative with the tests and ask the right questions. It’s very difficult to find somebody who can master all three of those skills and those abilities. So working with an outsourced team; I think CRO is one of those things where doing it alone is probably not the best approach unless you’re just really, really some sort of a renaissance man who can have these multiple disciplines. Thank you so much for coming on Jon. This has been an awesome discussion I’d begin maybe because I just love CRO but I appreciate you coming on and sharing some of the tips.
Jon: Well, thank you so much for having me, Mark. I really do appreciate it.
Links and Resources: