The Million Dollar Optimization Strategy

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

© Andre Morys, Web Arts AG www.web-arts.com3
André Morys
@morys

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

115 Conversion Experts in 15 Offices worldwide
5
Web Arts is founder of the
worldwide alliance of leading
conversion optimization
companies
@morys

© Andre Morys, Web Arts AG www.web-arts.com
Agenda today
6
1.Don‘t call it „Conversion Rate Optimization“
2.Optimization is not Testing.
3.Don‘t let the numbers lie to you. (Case Study)
@morys

Growth of Top 10 e-Commerce Ventures in 5 Years (DE)
15

Part I:
It‘s about Growth, stupid.

Who has a business plan for CRO?

Do You Have a Business Plan for Your CRO Strategy?
@morys

Profit Margin
20
Opportunity Cost:
! 500‘ Profit
@morys

Challenge needed?
21
@morys

Compare the effect of two optimization strategies:
22
@morys

Profit Margin
24
Opportunity Cost:
! 2.2mProfit
@morys

Now you can re-invest ! 2.2m in
optimization...
25
@morys

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 (%)
26
@morys

„If you
double the number
of experiments
you do per year you're going to
double your
inventiveness“
Jeff Bezos, CEO amazon, 2004

0
300
600
900
1200
2008 2009 2010 2011 2012
The Zalando Effect?
28
@morys

So, what‘s the problem?
29

For a 25% Compounded Global CR Increase, You Need...
30
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%?
5 5 5 5 5 5 5 5 5 5 10 Tests à 5%?
5 5 5 5 5
20 Tests à 5%
and 50%
success rate?5 5 5 5 5
Problem #1:
Organizations are too lame
to execute 20 tests per year.
Problem #2:
This is really expensive and
complex. Organizations hate
both.
Problem #3:
Most CMOs still prefer to
buy 25% more traffic.
@morys

Why only 5% average uplift per test?
32
‣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 size.

A/B Test Result
Reality
„I can‘t feel the uplift!“
@morys

Testresults - Significance versus Validity
1 week
500 vs. 550 conversions
+10% Uplift
significant - wohoo!
2 weeks
1000 vs. 1030 conversions
+3% Uplift
not significant - :-(
Run your experiments longer to get valid insights!
@morys

A/B
Testing
70% don‘t know that there is a Phase 2
20% have no answer
10% have an idea how to reach Phase 3
@morys

KPI: Average E-Commerce CR Uplift per Template Type
44
0 %
2,5 %
5 %
7,5 %
10 %
Homepage Category Product Page Cart Checkout Site Wide
9,81 %
7,3 %
6,59 %
9,28 %
6,35 %
3,32 %
Average Uplift by Template Type (n= 134)
@morys

‣Growth is 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.
45
@morys

Part II:
Where do good optimization ideas
come from?
@morys

where would you buy?
why?

quantitative qualitative
How much? Why?
♥︎

Traffic
Website
Web
Analytics

Traffic
Website
Web
Analytics
Click
Hand
Motor Control
prefrontal Cortex
Limbic System
Perception

Test: facebook Acount Deaktivierung
58
@morys

ROI
„I have to buy it.“
Brand, Habits
„I want to buy it.“
Motivation, Emotion
„I can buy it.“
Usability, Accessability,
Visibility
Focus on Consumer Behavior
@morys

© Web Arts AG www.web-arts.com60
Factors, that influence the chance of conversion, can be
identified with a conversion framework
7E Framework
@morys

© Web Arts AG www.web-arts.com81
Conversion Optimization means:
„Get a relevant unique value
proposition in the users mind.“
good feeling
@morys

82
‣It is not hard to implement a testing tool. It‘s hard
to find the right things to optimize.
‣ Find out, what really motivates users.
‣ Use different qualitative methods, like user research, personas, etc.
@morys

Conversion DMAIC®
Lean Innovation Process by Web Arts AG www.web-arts.com
83
quantitative
qualtitative
LEARN
BACKLOG
CONTROL
IMPROVE ANALYSE
DEFINE
MEASURE
@morys

#1
Is the change bold enough
that it will be perceived by
users?
#2
Does the variation have
enough contrast to change
the behavior of users?
#3
Does it use psychological /
social principles?
#4
Is it situated on the primary
path of conversion?
@morys

85
‣Always prioritize your testing hypothesis!
‣ Optimization is not trial and error.
@morys

Part III:
Measure The Right Stuff.
@morys

Control Template Discount Value Prop.
143 %
114 %113 %
100 %
Visitor - Order Conversion (relative)

Control Basis Preis QualitätControl Template Discount Value Prop.
291 %
204 %
243 %
100 %
Return rate (relative)

Control Basis Preis QualitätControl Basis Preis QualitätControl Template Discount Value Prop.
122,2 %
87,1 %
102,3 %
100 %
Profit Contribution (relative)

96
‣Measure economical KPIs.
‣ Don‘t try to get them statistical significant.
‣ Conversion goal = organisations goal
@morys

Five Pillars of Growth Strategy:
1. CRO -> Growth.
2. Efficiency -> Effectiveness.
3. Prioritize Hypotheses.
4. Motivate users.
5. Measure the right stuff.
It makes a difference.
97
@morys

„If it doesn‘t sell,
it isn‘t creative.“
David Ogilvy
@morys

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

The Million Dollar Optimization Strategy

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The Million Dollar Optimization Strategy