Optimizing Conversions: How To Get Maximum Impact With Minimal Effort

Assuming you’ve already spent some time optimizing your retention so that you’re not wasting money converting customers with low lifetime values, it’s time to get to work on your conversions.

Now, when it comes to conversion optimization, there are countless strategies an organization can implement, begging the question: Which ones should be prioritized?

To answer this question, you need to identify the strategies that will yield the highest returns. You’re probably thinking, “how can I find the strategy that will yield the highest returns before I actually try it?”

The key is simply finding the main problem area in your conversion process, or what we’re going to call your Area of Greatest Friction (AGF). Just as a bottleneck will slow down an entire operational process, your AGF will dramatically slow and hurt your conversions.

Once you’re able to identify your AGF, even a slight improvement at this step will result in much higher returns.

Finding Your AGF

If you were to visually map out every step in your conversion process, you could see how many people make it to each step and how many people drop off at each step. This is what funnel analysis does.

In the funnel analysis above, we can see that 81.3% of people made it from step 1 to step 2, 39.7% of people made it from step 1 to step 3, and so on. We can also see the percentage of people who made it between steps. For example, we see that 48.8% of people made it from step 2 to step 3 and 3.3% of people made it from step 3 to step 4.

Mapping out our conversion process in this way makes it quite easy for us to identify our AGF, which is simply the step with the largest drop off. In this example, we can see that our AGF is at step 4, “Confirm”, where only 3.3% of people make it from the previous step.

The Cause

Next, you have to understand why there is so much friction at this step. In many cases it will be obvious to you for one reason or another, such as:

  1. The step requires greater effort than the others (e.g. setting up or implementing something technical)
  2. The step requires some type of commitment from the user (e.g. adding a credit card or sharing very personal information)
  3. The step involves obviously confusing UX (e.g. a lack of feedback, non-obvious button)
  4. The step introduces other variables that may be problematic (e.g. sending an email confirmation that can end up in spam folders, be sent to unattended email accounts, etc.)

Other times, the cause of the drop off won’t be as apparent and will require additional analysis. At this point, you will want to set up a sub-funnel to analyze just that step which is your AGF.

For example, say your AGF is your “add shipping details” step. You will want to create a funnel that looks at every minute step required for your users to add shipping details, from button clicks to fields they must complete.

This sub-funnel allows you to take a closer look at your AGF and diagnose the cause of the friction. In the “add shipping details” example, we might find that our shipping options are unclear or that customers are taken aback by high shipping costs, causing them to abandon at that point.

Another way you might find out what is causing your AGF is by comparing how different segments move through your funnel. You may discover that each segment behaves quite differently, particularly if you have customer segments with distinct characteristics.

In the above examples, we were simply looking at averages. However, in some cases, the averages will actually hide more than they will expose, making segmentation critical. For example, say we have two segments that each perform poorly at a different stage of the funnel. If we simply average the performance of both segments, we will end up with metrics indicating that there are no issues at either of these two stages.

You will need to have a good understanding of your customer base in order to know which segment characteristics might affect conversion performance. For example, a B2B company with both small and large accounts may want to segment by company size (smaller companies will likely stumble at different steps than larger enterprises), while a social network might want to segment by student age group.

Fixing Your AGF

If you’ve made it to this step, congratulations! You’ve already completed the hardest part. Now that you know what is causing your AGF, you have a clear compass directing you to your top solutions. Here are just a couple examples of organizations that successfully identified their AGFs and implemented solutions that improved their conversions.

TOPS Products

RR Donnely’s TOPS Products was experiencing an underperforming product launch, despite significant marketing investment and highly positive feedback from focus groups. With some analysis, they were able to identify their AGF: a confusing product search that was preventing customers from finding the new product. As soon as they resolved this issue, their first orders started rolling in.

Woopra, Inc.

At the company where I work, we found our AGF was at the step where customers were required to add a JavaScript tracking code to their website or application. The cause of friction was quite obvious to us – although adding the tracking code requires only 5 minutes, many users who sign up do not have the energy or the ability, to add the tracking code in that moment. The first solution we implemented was quite simple. We triggered an email to be sent to users who signed up but failed to add the code within 3 days. The email offers assistance and also directs them to documentation to help them add the tracking code. After just one week, this simple email campaign improved our conversion rates by 20%.

Ultimately what both of these organizations have in common is their ability to maximize their return on investment in conversion optimization by first identifying their AGF. By focusing their efforts, they were able to achieve maximum impact with minimal effort.

Why Retaining Customers Is More Important Than Attracting New Ones

Customer retention is the unsung hero of the successful business. Its flashier sister, customer acquisition, usually steals the spotlight, but retention is what ultimately builds the foundation of a company that is positioned for growth. After all, it’s much easier to fill a bucket than a sieve.

So Why Exactly Is Retention Important?

1. It’s More Cost Efficient

It’s always more cost effective to re-market to existing customers rather than attract, educate, and convert new ones. The fact that these customers have already demonstrated an interest in your offerings and are engaged with your brand gives you an advantage that you’d be mistaken not to capitalize on. The rule of thumb is that it is 5 times more expensive to acquire new customers than it is to retain existing ones.

2. It Improves Lifetime Value

At the end of the day, what really matters isn’t how much a customer pays you today, but what their entire lifetime value is. For example, a customer may pay me $1,000 today and then disappear, while another one pays me $200/month for 5 years. Which one do you think is more valuable to my company?

It’s important to spend time optimizing retention before you spend on conversion. Otherwise, you will invest in converting customers and then lose a good portion of them, meaning they will have low lifetime values. Don’t waste your (or your investors’) money winning new customers who will have a low lifetime value.

3. It Builds Your Brand

In addition to cost savings, retaining customers means there will be more customers who have been using your product for longer and are therefore deeply engaged with your brand.

Building brand loyalty among existing customers really means you’re building a fanbase. And fans will evangelize for you in a very organic way, which ultimately brings you new customers. Keep your customers happy and engaged, and you’ll both benefit.

How To Improve Retention

So now you’re convinced and ready to tackle that pesky churn. But as with most things in life, improving customer retention is much easier said than done.

I wish I could give you a single, golden rule to improve retention. But the truth is, it absolutely varies case by case. What I can tell you is that the only way to find out what you need to do is to first measure and analyze. Ninety percent of your work is identifying the problem. Once you know the issues, implementing the solution is relatively easy.

Measuring retention in the most basic way looks something like this:

In this retention report, we see that of all the customers who initially came to the website, 32.7% returned 1 week later, 23.8% returned 2 weeks later, and so on.

Now this is a good start, but frankly, it doesn’t tell you all that much. The problem with this report is that it doesn’t measure the retention of similar customer groups. That is, it doesn’t compare apples to apples.

It would be more insightful for me to look at a report that showed me for how long customers continue to use the product after they sign up.

This report will filter out all those people who visit the website and never sign up, enabling me to focus on understanding the retention of that segment of customers who actually tried the product. It also allows me to measure not just how long this segment continued to return, but for how long they actually continued to use the product, which is ultimately what I care about.

But wait, there’s more.

Where I will really start getting insight is when I look at my cohorts. Cohorts show you the retention for groups of customers who began using the product at the same time.

I can clearly see that the group of users who started using the product during the 31st week are churning at a faster rate than those who signed up before them. While previous weeks saw 30%-32% of customers returning 1 week later, the 31st week only shows about 20% of customers returning 1 week later. Perhaps I pushed a product update at that time. My guess is that the update wasn’t received well and caused customers to abandon the product.

Now I’ve finally found my problem and I’m ready to hypothesize the solution, test, and measure all over again.

Social Media-Newbies Getting Started

Social Media on the Internet is one of the advantages of having an business online. With time to learn and do everything at a premium, you will need to get the most bang for your buck.

5 Places For A Newbie to Start

1. Twitter can be a very effective tool. The trick is to learn it well and use it to your advantage. You will find several twitter posts on this blog that will help you. Look under categories.

2. Your blog– When you are giving good valuable content your blog will be a resource for others. You can be the blog others want to come to.

3. Forums– Join a forum in your niche. Do a Google search for a forum that relates to you niche; dog forums, tropical fish forums, etc.

4. Comment on other blogs. You can create quite a community by giving good information on blogs that are related to your niche. This has worked really well for me. I just bookmark blogs I visit and comment on. Most of my traffic comes from other blogs. The key is to give good data that compliments what the blog is about.

5. Become an expert in you niche on Yahoo Answers. You can strut your stuff in any category that fits your niche and attract potential customers.

Remember what ever you do -learn it well. Pick one item, learn it and get it rolling before moving on to the next tool. Keep it simple.

To your social media success!

P.S. Making Money online is all about Social Networking. It is never two early to get started.

7 Signs Your PPC Campaigns Needs Optimization

Are you getting the most from your pay per click (PPC) campaigns? How would you know? Are you as efficient at getting clicks and converting visitors as you would be carrying water with a leaky bucket? Let me give you 7 signs to tell that you are not optimizing your PPC spend:

1. You use the set it and forget it strategy to PPC. If you setup your PPC campaigns months ago and haven’t adjusted a thing in it, I can practically guarantee you have room to improve it. The seasons change, traffic flow and traffic quality change, even Google’s Quality score changes.

Optimizing for Conversion, Ignoring Consumption

We have worked with many demand or lead generation companies over the past 10 years. Most of the time when they come to us, they ask us to help them increase the number of people they convert into a free trial, a free download, or to create an account.

Conversion Isn’t an Event, it’s a Process

We always like to focus first on increasing the number of leads towards the top of the sales funnel. However, without the next step, consumption, the companies don’t necessarily achieve their better but usually unstated goal of increased revenue.

This is the same fuzzy focus that has companies intent on getting more clicks to their PPC ads just so they can show the increased traffic numbers without focusing on converting that visitor into a lead or sale. To tell you the truth it is not as hard to get visitors to take the uncommitted step, as it is getting them to actually use and consume the product.

When you optimize for customer experience you really need to take the whole scenario from awareness (clicking your ad) through conversion and ultimately to consumption (and ideally to evangelism) into account.

An Example of Trying to Create Consumption

Yesterday I received this email from TimeBridge. I set up an account when I received an invitation from a friend at another company to setup a meeting. You know how challenging it is to coordinate a meeting amongst several people using email, etc. Well I responded to his request and I really enjoyed the experience (partially because it was seamless using my Mac and Entourage) so I decided to setup an account. I even told several people about it. But I was never converted enough to incorporate it into my work flow.

I must have setup countless meetings since then all without the use of TimeBridge. What do you think went wrong? I converted, did a little worth of mouth for them but never consumed the product. Somehow the persuasive momentum was lost.

This is one way to try to initiate consumption. Use emails to try and prod engagement, add a bit of bribery (such as a contest for a $10 Starbucks card) and see how it works. We’ve seen several other really good examples over the years, what is the best method you have ever seen?

Attraction, Conversion, Consumption: Why You Need To Separate the Trio!

Go to a pond where you can visibly see a lot of fish. Take a stone and throw it in the water. Notice what the fish do? Yes, they race towards the stone in anticipation of a feeding frenzy?

Of course, you know what happens next.

The fish figure out you’re just teasing, and with disappointed guppy faces, they swim away. Um… if you continue to throw stones, they’ll keep coming back, till they work out it’s useless to humour you any more.

3 Deadly Mistakes Freelancers Often Make

Freelancing is a great way for anyone to work independently or make some extra money and for employers to hire talent at an affordable price and in a flexible way. However, freelancing isn’t a hobby; it is a full-time job in which you cannot succeed unless you abide by a certain set of rules.

Using freelancing marketplaces like freelancer.com, elance.com or odesk.com is a first step in making your freelancing work more professional and will be very helpful in getting your projects. However, even when using such platforms, I have seen many freelancers struggle to get projects by making some major mistakes.

This article is about three deadly mistakes freelancers often make that could easily be avoided.

Not looking pro

It is all about perception not reality! You could be the best designer, the best coder, the best SEO… if your customers cannot see that in a way or another, for them you just are not.

There are many ways to convey a positive image. Some past showcase work and positive feedback (portfolio, testimonials…), others spend a lot of time writing compelling proposals… However, many fail when it comes to producing enterprise-grade invoices in particular and admin papers in general.

YES, INVOICES! I have seen many freelancers unable to provide a decent invoice and others that couldn’t tell me how much they charged for the last project we worked on together!

The solution is simple, use tools! There are so many free and paid tools out there that can help you look more professional and make your job easier. Just imagine you are at one of your customers’ office and he asks you if he can have an invoice in order to pay you. With a cloud-based invoicing system, all you need is a computer with Internet access, and you’re done, give him the invoice and cash in the check!

Here are my favourite invoicing/billing tools:

INVOICERA, The popular one

Invoicera is probably the most widely used. It has always been reliable and handy. If you want to make online invoicing a straightforward and uncomplicated process, this is one of the best tools out there; they even have a free plan.

MAVENLINK, The comprehensive tool,

If you are ready to pay for a pro tool and get some support, this is your most comprehensive choice. Mavenlink lets you collaborate, share files, invoice, track time, and make or receive payment in a custom-branded project management solution.

HARVEST, The easy one

HARVEST is extremely easy to use and can simplify your timesheets with time tracking and fast online invoicing.

Not charging enough

Price is a major parameter in a project manager’s choice, but the quality is also a primary concern. As humans, we have been educated into thinking that quality and price are related, and that’s not always untrue.

In fact, for many people, the price is an indicator of how good your work will be. So being too aggressive on your prices and making sacrifices might have a negative effect on how good you are perceived to be.

In conclusion, my advice is to try and strike a balance between:

  • The cost of the job (time and resources)
  • The price the employer can pay (budget)
  • The price the employer things he has to pay for a good quality work

Over-trusting your employers

Trust is part of life, and many employers need to see you trust them, and they can trust you before they can give you the project.

So you have to inspire trust and manage the customer interactions very carefully. Some people will quickly try and take you to a feeling driven relation because that’s how they do it. In fact, as a freelancer, you will certainly have to work with people from different countries, regions, cultures…

This is why I would strongly advise you to use tools like escrow to make sure you get paid and if not, can file a complaint or a dispute.

As you might already know, most freelancing platforms offer such services, but that doesn’t mean you should entirely rely on them and not filter out your partners carefully.

Of course, once the customer is a recurring one, you might want to be more flexible to speed things up and help make working together easier.

Don’t Overlook These Common Cart Mistakes

I’ve seen a few big shopping cart no-nos lately, so I just want to alert Grok readers to them–they’re pretty easy to avoid:

The Homepage Dump: You add an item to your cart and are thrown into the checkout process. You’ve got another item on your shopping list, so you click the little link that says “Continue Shopping.” You’re dumped on the homepage. This is especially bad when you’ve done a lot of searching and results-filtering, and now it’s all gone. It really does feel like you’ve just been dumped! I can’t think of any good reason why the homepage is the proper place to land a visitor to continue shopping.

Emotionally Speaking

People often ask me what I mean when I say it’s important to appeal to the emotional needs of the folks who come to your Web site. Like, is it really about writing extravagantly, in a fashion that suggests the emotions of the copy’s author are stirred up and yours are about to be next? Should we be in search of flamboyant prose?

It’s then I realize people don’t really have a handle on what it means to appeal to emotion. I mean, if you’re looking to acquire an excavator, how meaningful or appropriate is effusive, flowery language? Think it will stir you up or send you running?