Conversion Optimization: The Million Dollar Optimization Strategy

1. André Morys The Million Dollar Optimization Strategy Uh Oh. © Andre Morys, Web Arts AG FRANKFURT - HAMBURG - MÜNCHEN www.web-arts.com

2. André Morys @morys © Andre Morys, Web Arts AG 8 www.web-arts.com

3. 5.8 bn ! Retail / Lead-Volume 6 4,5 3 1,5 © Web Arts AG 9 www.web-arts.com 0 2008 2010 2012 CRO Volumen (Mrd. !)

4. 115 Conversion Experts in 15 Offices worldwide Web Arts is founder of the worldwide alliance of leading conversion optimization © Web Arts AG 10 www.web-arts.com companies

5. Agenda today 1. Don‘t call it „Conversion Rate Optimization“ 2. Optimization is not Testing. 3. Don‘t let the numbers lie to you. (Case Study) © Andre Morys, Web Arts AG 11 www.web-arts.com

6. Part I: It‘s about Growth, stupid. © Andre Morys, Web Arts AG 12 www.web-arts.com

7. Who has a business plan for CRO?

8. Do You Have a Business Plan for Your CRO Strategy? © Andre Morys, Web Arts AG 14 www.web-arts.com

9. Net Sales © Andre Morys, Web Arts AG 15 www.web-arts.com

10. Profit Margin Opportunity Cost: ! 500‘ Profit © Andre Morys, Web Arts AG 16 www.web-arts.com

11. Challenge needed? © Andre Morys, Web Arts AG 17 www.web-arts.com

12. Compare the effect of two optimization strategies: © Andre Morys, Web Arts AG 18 www.web-arts.com

13. Net Sales © Andre Morys, Web Arts AG 19 www.web-arts.com

14. Profit Margin Opportunity Cost: ! 2.2m Profit © Andre Morys, Web Arts AG 20 www.web-arts.com

15. Now you can re-invest ! 2.2m in optimization... © Web Arts AG 21 www.web-arts.com

16. More-Growth-Through-Testing-Rule #1 ‣It‘s not about conversion rates. It‘s about GROWTH. ‣ Set your goals properly. ‣ Measure your optimization efficiency. ‣ Average Uplift per Test ‣ Amount of Tests per Year ‣ Cumulated Uplift per Year ‣ Test Success Rate ‣ ROI per Test (%) © Andre Morys, Web Arts AG 22 www.web-arts.com

17. „If you double the number of experiments you do per year you're going to double your inventiveness“ Jeff Bezos, CEO amazon, 2004 © Andre Morys, Web Arts AG 23 www.web-arts.com

18. Growth of Top 10 e-Commerce Ventures in 5 Years (DE) © Andre Morys, Web Arts AG 24 www.web-arts.com

19. The Zalando Effect? © Web Arts AG www.web-arts.com 1200 900 600 300 0 2008 2009 2010 2011 2012 25

20. So, what‘s the problem? © Web Arts AG 26 www.web-arts.com

21. For a 25% Compounded Global CR Increase, You Need... Problem #3: Most CMOs still prefer to buy 25% more traffic. 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 10 Tests à 2.5%? Problem #1: Organizations are too lame to execute 20 tests per year. 5 5 5 5 5 5 5 5 5 5 10 Tests à 5%? © Andre Morys, Web Arts AG 27 www.web-arts.com 5 5 5 5 5 20 Tests à 5% and 50% 5 5 5 5 5 success rate? Problem #2: This is really expensive and complex. Organizations hate both.

22. Reality Check: „We do 200 experiments per year. We test everything. We don‘t need help.“ „Whats your success rate?“ „10%“ © Andre Morys, Web Arts AG 28 www.web-arts.com

23. Wait... © Web Arts AG 29 www.web-arts.com

24. Why only 5% average uplift per test? ‣In the last case study, they talked about 45% Uplift! -> E-Commerce conversion rate is not email subscription or download CR. ‣My last test had 33% Uplift! -> Was it real? Don‘t confuse statistical significance with validity. Tests should run around 4 weeks for a sufficient sample. © Andre Morys, Web Arts AG 30 www.web-arts.com

25. A/B Test Result „I can‘t feel the uplift!“ Reality © Andre Morys, Web Arts AG 31 www.web-arts.com

26. Testresults - Significance versus Validity Run your experiments longer to get valid insights! 1 week 500 vs. 550 conversions +10% Uplift significant - wohoo! 2 weeks 1000 vs. 1030 conversions +3% Uplift not significant - :-( © Andre Morys, Web Arts AG 32 www.web-arts.com

27. KPI: Average E-Commerce CR Uplift per Template Type 10 % 7,5 % 5 % 2,5 % 9,81 % 7,3 % 6,59 % 9,28 % 6,35 % 3,32 % © Andre Morys, Web Arts AG 33 www.web-arts.com 0 % Homepage Category Product Page Cart Checkout Site Wide Average Uplift by Template Type (n= 134)

28. More-Growth-Through-Testing-Rule #2 ‣It‘s all about effectiveness. ‣ To increase real CR, you need many really good test results. ‣ Average Uplift per Test influences your growth directly. ‣ So: Do the right things! ‣ Don‘t do it too fast. ‣ Don‘t test everything. It is expensive. © Andre Morys, Web Arts AG 34 www.web-arts.com

29. Part II: Where do good optimization ideas come from? © Andre Morys, Web Arts AG 35 www.web-arts.com

30. © Andre Morys, Web Arts AG 37 www.web-arts.com

31. where would you buy? why? © Andre Morys, Web Arts AG 39 www.web-arts.com

32. © Andre Morys, Web Arts AG 40 www.web-arts.com

35. Traffic prefrontal Cortex Limbic System Perception Website Web Analytics Click Motor Control Hand © Andre Morys, Web Arts AG 43 www.web-arts.com

36. Traffic prefrontal Cortex Limbic System Perception 99% Website Web Analytics Click Motor Control Hand 1% © Andre Morys, Web Arts AG 44 www.web-arts.com

39. ROI „I have to buy it.“ Brand, Emotion, Value „I want to buy it.“ Psychology „I can buy it.“ Usability, Accessability, Visibility Web Arts ROI Pyramid

40. 7E Framework Factors, that influence the chance of conversion, can be identified with a conversion framework © Web Arts AG 49 www.web-arts.com

43. You are too dumb to buy here.

44. Conversion Optimization means: „Get a relevant good unique feeling value proposition in the users mind.“ © Web Arts AG 71 www.web-arts.com

45. More-Growth-Through-Testing-Rule #3 ‣It is not hard to implement a testing tool. It‘s hard to find the right thing to optimize. ‣ Find out, what motivates users. ‣ Analyse your website from different perspectives: ‣ Web Analytics: Where is the problem? ‣ User Testing: How do useres think about it? ‣ Persona: What do they not tell us? ‣ Expert Evaluation: Which psychological principles could we use? © Andre Morys, Web Arts AG 72 www.web-arts.com

46. Conversion DMAIC® Lean Innovation Process by Web Arts AG www.web-arts.com DEFINE quantitative LEARN qualtitative MEASURE © Andre Morys, Web Arts AG 73 www.web-arts.com BACKLOG CONTROL IMPROVE ANALYSE

47. André Morys CEO Web Arts AG andre.morys@web-arts.com Tel. +49.6172.68097-15 www.web-arts.com Thank You! © Andre Morys, Web Arts AG 90 www.web-arts.com