Conversion Optimization: Drive More Sales from Existing Traffic and Increase Marketing ROI

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In the online world, sell-through is known as conversion rate optimization. For almost every online business, conversion rate is the single highest leverage point for increasing sales and return on marketing spend.

In this presentation, Zac Aghion goes through the basics of conversion rate optimization. From A/B to multivariate testing and beyond, the presentation reviews the theory, case studies and best practices in this critical field of online marketing.

The presentation begins with an overview of the basic web analytics terms and concepts needed to grasp the value of conversion rate optimization. It continues with an example of

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Conversion Optimization: Drive More Sales from Existing Traffic and Increase Marketing ROI

  1. 1. ConversionOptimizationDrive More Sales from Existing Trafficand Increase Marketing ROIPresented by Zac Aghion for Barcamp ShanghaiMarch 23, 2013
  2. 2. Some Basic Web Analytics Visitors – Number of people that visit yourwebsite Conversions – Number of visitors that complete agoal (purchase, sign up, download, click, etc.) Conversion Rate = Conversions ÷ Visitors Example: 200 Visitors and 5 Purchases Conversion Rate = 5 ÷ 200 = 2.5%
  3. 3. A/B Testing OverviewTest two versions of your website to see which converts at ahigher rate.
  4. 4. Which Version Won?Source: WhichTestWon.com
  5. 5. Marketer’s Surprise: ‘FREE’ LosesSource: WhichTestWon.comVersion B led to a +13.48% increase in conversion rate.✔✗
  6. 6. What to Test?Source: TechWyse.com
  7. 7. Red Distraction & ClutterSource: TechWyse.com
  8. 8. Remove Clutter, Promote SignupSource: TechWyse.com
  9. 9. Red Truck & Logos DistractionSource: TechWyse.com
  10. 10. Remove Logos, Yellow ButtonSource: TechWyse.com
  11. 11. That’s Much Better!Source: TechWyse.com
  12. 12. Multivariate Testing Overview Every landing page has X elements (MM’s hair) For each element, we test Y variations (Neon) In total, we have (Y1× Y2 × Yx) LP combinations
  13. 13. How Obama Raised +$60 MMSource: Optimizely Blog
  14. 14. Four Button Variations
  15. 15. Six Media Variations
  16. 16. 24 Landing Page Combinations!
  17. 17. And the Winner is…
  18. 18. +40.6% CR = +$60 MM Original CR  8.26% New CR  11.6% (+40.6%) 10 million signups from New (would be closer to7,120,000 signups with Original) +2,880,000 additional signups $21 average donation / signup +$60,000,000 in additional donations
  19. 19. Testing With ConfidenceSource: Optimizely Blog
  20. 20. Confidence Intervals Confidence intervals indicate the statisticalsignificance of an observed conversion rate 95% CI = Observed CR +/- (1.96 × Standard Error)Standard Error = √ (p × (1-p) ÷ n) Common Pitfalls Low # trials = non-significant results High # trials = significant results General balance between speed and reliability My website has less traffic than Obama But I still want +40% CR How??
  21. 21. Enter Genichi Taguchi Japanese statistician(1924 – 2012) Taguchi Methods – fractionalfactorial experimental designs Basic Concept – data collectedfor a specific subset ofcombinations can beextrapolated to determine thebest performer of a full factorialset
  22. 22. Orthogonal Arrays Taguchi arrays are used to determine whatsubset of combinations need to be tested toextrapolate results Most Basic Taguchi Array, L4:
  23. 23. L8 Array: Testing Efficiency +32x 7 page elements, 2 variations for each 2 × 2 × 2 × 2 × 2 × 2 × 2 = 256 LP combinations Data extrapolated from specific subset of 8combinations determines best of 256
  24. 24. In-House or Agency?In-House AgencyProsLower initial costsMore control over thetesting processMore relevantadvanced goal testsNo need for internal resourcesFaster results as agencyprovides specialized expertiseLearn best practices and gainexperienceConsLong time to buildexpertise from scratchLonger time to startachieving great testresultsHigher initial costsLess understanding ofcomplex details of yourbusiness goals and industryLess control over testing
  25. 25. Thank You!For More Information:Zac AghionEmail: zac.aghion@hotmail.comChina: +86 15921631924 | US: +1 6177506684Twitter: @zacaghion | Skype: zac.aghion | Blog: www.ChinaAppMarketing.com

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