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Today, Jon & Ryan talk about how Digital Marketing and CRO work together to create a scenario where one plus one really equals three or four. When these combine it It becomes an explosion of revenue and profit. Today the guys why it is that these two things work so well together.
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You’re listening to Drive and Convert, a podcast about helping online brands to build a better e-commerce growth engine with Jon MacDonald and Ryan Garrow.
All right Jon, today we’re going to talk about how we work well together. You and I have done a lot of talking around the US at least. We’ve done a lot of podcasts together. We’ve worked with a lot of clients together. But we haven’t, at least on this podcast, really talked through how our expertise on each side really work together where one plus one really equals three or four.
I think that’s what happens when you have the best in the business at driving traffic and then the best in the business at converting that traffic. It becomes just an explosion of revenue and profit. Last year, in 2020, we saw this across multiple clients we were working with. We’ve talked previously about e-commerce grew 32-33% year-over-year in 2020.
For our clients that we both work on, that would have been a massive disappointment. We had clients growing 1,000% year-over-year because of the work both of our teams are doing together.
I think it’s really important we start talking about why it is that these things work so well together. It’s not just that you’re a nice guy, I’m a nice guy, we both like whiskey and wine and so we get along. But it’s really that man, you shouldn’t be doing CRO without driving lots of traffic and you should be driving lots of traffic without doing CRO.
That’s a great point.
And doing them right. Let’s put it that way. There’s a lot of wrong ways to do both of those things. Let’s start with you, from your expertise on the CRO side, why is CRO so important to driving traffic?
Well, I think so many brands are spending tons of money and it’s one of the first marketing expense people make is into drive traffic. It’s how they scale. They’re not getting the return on that ad spend that they should be getting.
It doesn’t matter how great a logical position is at driving traffic if they’re driving traffic to a site that can’t convert that traffic into a customer or a revenue.
That’s usually where we can come in and really help these brands to make sure they’re getting the maximum return on that ad spend, that they’re really seeing all the benefits of working with your team essentially.
What really can help just eliminate things is hey, if I could spend a dollar to create $2 in revenue and through traffic, but then I could spend maybe $2 to generate $4 in revenue, I’m going to go for the $4 in revenue and have a bigger scale. Now I have economies of scale at my company.
What that means is then we’re just tacking zeros onto the end of things to where I can take that extra money and spend it in other places and continue to accelerate that return month over month, year over year and reinvest it into more traffic, into other avenues, into trying and experimenting with all these different channels and platforms and ad types and everything else that could be possible out there.
For sure. In my brain, I always see supply and demand curves. And so when I’m looking at driving traffic, it’s okay, I want more volume but I know that that additional volume costs me margin as I’m pushing for volume.
What CRO does is you get to shift the graph. It doesn’t necessarily move you along the line. It’s like no, I’m actually just going to shift that and my margin stayed the same, but my volume went astronomically to the right and I put some competitors out of business, which is always my goal.
Yeah. I’m going to burn you down and [inaudible 00:04:03] if I can. You can’t get that expansion without improving things. What I see often is that there’s these great platforms like Shopify that you just put up a Shopify template and it’s going to convert great and Shopify will give you these wonderful little numbers that you’re converting at 1.78% and that’s better than everybody else. Your vertical is at 1.4, so you get the feel goods. But why are you in 1.78? What’s wrong with 2.5?
Well, and if you don’t have a healthy dose of FOMO, which we just talked about, if you don’t have a healthy dose of that and say, “Okay, well I’ll [inaudible 00:04:37] at 1.78, but why is it not a two? Why is it not a three? Heck, why is it not an eight?”
You could just keep going up and saying, “Okay, I know I can continue to get more and more out of this if I can get more people to buy. I need to understand why aren’t people buying.” I think also CRO when it comes to traffic, if we’re talking about that side of the equation is a lot of times people’s websites aren’t aligned with the messaging behind the traffic that they’re sending.
So the messaging does a great job of driving qualified traffic and the ads that are getting run really resonate. But then people get to the site and the site isn’t following through with that promise that’s been made. That promise just could be, “Hey, we’re going to help you understand if you can solve… We’re going to solve a pain or need that you have.” And the ad is saying, “Yes, I can help you do that.” Because the person found the ad through searching for that pain or need.
Once they get to the site, they’re like, “Well, I don’t understand. What are they even selling?” That happens so many times. And so it’s really, really hard for these brands to understand what that new-to-file customers experience is like on their site.
Ryan, you’re probably tired of hearing me say this, but it’s really hard to read the label from inside the jar. It’s so true. I think that’s where a lot of sites fall down when they do spend a lot to drive traffic, they drive great qualified traffic but then they just have a poor consumer experience. And so the two have to be there and I’m a little biased on that, but it’s proven out with the numbers as you said earlier.
Yeah. We have mutual clients that grew and one of them that comes top of mind, $7 million in revenue in 2019 and $45 million in 2020. Did not change the business model, it was not a COVID bump. It was not like, “Hey, we’re selling hand sanitizer.” Can’t happen to be going through the roof. This was a staple product that one plus one equaled 10. It’s for sure true.
One of the interesting points that I’ve seen as you improve your ability to convert, your conversion rate on some of the channels we drive, let’s think about shopping for example, might not increase. That’s okay because what you’re doing by getting more aggressive in shopping is you’re moving further up the funnel and getting more broad terms. And so yeah, your conversion rate, I’ll make this up, stays as at 1%, but you drove 10 times the amount of traffic to the site and still converted at 1%.
Whereas if you’d done that before, you would have dropped to like 0.7, 0.6%.
That’s a great point. Naturally, as you continue to scale, you will hit a point where you’re now sending traffic that’s less qualified because you’re sending much more volumes of traffic. So naturally, you’re expanding that audience. That’s why it’s required to really work with an expert firm like yourselves who can help you do that in the right way and track those numbers and make sure you’re not spending into a vacuum.
But I do think that once you start hitting that curve, it’s really important. It’s even more important that you focus on converting once they reach your site because it’s a slippery slope.
You could all of a sudden say, “Hey, you know what? I’m going to go from spending 10,000 a month on ads to spending 100,000 a month on ads.” And immediately what you’re going to see is your conversion rate go down if you did nothing else. Most likely that’s what’s going to happen.
Yeah. It will for sure go down.
It doesn’t mean you won’t make more money. You would make more money and you will grow and you do have other benefits like the brand awareness and everything else. But if you truly want to scale in a sustainable fashion, you need to be adding fuel to the fire. That’s exactly what combination of quality traffic and converting on your site can really do for you.
If you’ve listened to this podcast and gotten to this point, you’ve gotten a lot of insights from Jon that I guarantee you never would have thought of yourself. I learned something every time and I’ve been in the e-commerce business for what, 11, 12 years now and I’m basically dead in e-commerce years just like you, for how fast we change.
But it’s that process of just bringing an expert in to see your site from the outside and tell you, “Why did you set this up this way?” The reason like I would have is because that’s what Shopify allowed me to do at the point and that’s what my developer said I could do.
It wasn’t like I thought through the conversion process. I was like, “No, I need this up there. Get it up there. Oh, it’s on there. Great.” And then your brain comes in and is like, “Well, did you think about maybe not putting that there?” I’m like, “No. Maybe we should test that Ryan. Yeah. We should probably do some user testing there.”
I think that that’s a great point. It’s kind of a good segue into data. One of the best things that conversion optimization will help you do is track every click and movement that’s happening on your site. It will help you to better understand that customer journey. It will help you understand where people are dropping off.
One of the most valuable things that comes from this is the ability to understand what is not clicking with your customer because what you can do then is say okay, they’re dropping off at this point. I’m hearing from user testing and customer interviews and I’m seeing in all of the data that they don’t understand this one point or this one benefit or something of that sort.
That can have a direct line back to your account manager, who’s driving your traffic and then they can alter up the messaging on that side. And so it really is understanding all the additional first party data that you could lose out on if you’re not doing optimization and truly collecting all that data already.
And then how that data can really cycle back into traffic generation to really alter perhaps some messaging that might happen there and then bring that back into converting more and it just creates this great circle of data. And so it’s really important that not only you have that data and that you’re making data decisions, but you have companies that can work well together and have worked well together on other clients because then that communication channel is open. That’s really where it gets really effective.
Yeah. We should probably get some kind of graph about that circle. Like traffic, convert, increased revenue, more traffic, convert.
It’s a flywheel. It’s funny… That’s such business bingo to say flywheel, but it’s true. It is a flywheel. You get that going. You just keep reinvesting and it will keep converting at a higher rate and you’re really just going to continue to add fuel to the fire. I keep going back to that, but that’s just exactly what you’re doing.
Conversion optimization is like your traffic firm has done a great job at starting a fire, getting it lit and growing that fire over time. And then you have two options: you can throw money onto that fire that will fuel it and make it much bigger, and forgive for basically saying you’re burning cash here, that’s not what I’m talking about, but it’s the fuel that would help that fire burn faster; or you can take lighter fluid and just pour the lighter fluid on it and it just combusts and really takes off quickly.
To me, that’s what CRO can do. There’s other ways perhaps to do that. But CRO is what we found is the most effective and that’s why we focus on it.
You’re listening to driving convert a podcast focused on e-commerce growth. Your hosts are Jon MacDonald, founder of The Good, a conversion rate optimization agency that works with e-commerce brands to help convert more of their visitors into buyers, Ryan Garrow of Logical Position, the digital marketing agency offering pay-per-click management search engine optimization and website design services to brands of all sizes.
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The way I picture the internet marketing world, it’s a very level playing field and I can compete, like for example, Joyful Dirt compete with Scotts Miracle-Gro head-to-head because on the internet, on our sites and the traffic we are buying, I can buy the same click they can.
As a smaller brand, I might need to convert at a little bit higher rate than them. But again, it’s just website versus website at this point and my budget can grow very quickly if I’m getting the conversion rate and I’ve removed all that friction on the site, I don’t care who I’m competing against.
It might be David and Goliath. At the end of the day, if my site converts better, I get to scale much quicker than a larger competitor and it’s probably easier for me to make changes as a smaller competitor in the space.
That’s exactly it. A lot of those behemoth corporations surprisingly are not optimizing. We work with a lot of them and I get in there and we immediately are like, “Why have you not been optimizing? How did you get how big you are?”
It’s always interesting to see that where the mom and pop shops that are competing, they’re out there saying, “Man, I can never compete with this corporation because they have all the resources.”
Well, unfortunately that for the corporations, that does not mean they’re deploying the resources correctly. I think it’s a big opportunity for a small or mid-sized brand to provide a better online experience, answer all the questions that the consumers have and when a consumer is doing their research, because they are there, if they’re looking at fertilizer, they’re doing their research and they’re going to say, “Is it Joyful Dirt or is it Scotts Miracle-Gro? What are the differences and why did Joyful Dirt start?”
That’s usually where their head’s at, it’s why is this competitor there? It’s not a replica of the product or otherwise it’d be a commodity and they’re not going to compete. There’s something different. It’s a unique formulation or they’re solving a specific, smaller pain point, more niche, pain point or whatever it might be.
Maybe it’s better for the environment or it’s all organic and natural. Whatever that might be, if you can tell that story appropriately on your site, consumers will buy from you over that massive brand who’s just doing basically spray and pray.
They’re just trying to get the message out, really generic terms. They’re the ones spending a thousand bucks a click on things like fertilizer which is why the small brand could never buy that term because you’re not going to spend a thousand bucks on fertilizer.
It doesn’t make any sense, but they’ll just do it just because it’s easy and they have the cash to do it. I see that happen all the time where the small and little guy can come in. The companies you’ve mentioned today, they have massive competitors, massive competitors and they’re still growing thousands of percent year-over-year and they’re really excited about that.
They’re able to make that happen through the combination of driving the right traffic and making sure that traffic converts and they have a great experience. Telling the right story.
Yeah. If I look at it from the marketing side, there is a threshold of limitation on what a brand can spend based on their conversion rate. I know that if they’re fully following what I advocate and preach for a brand on non-brand terms where your growth comes from, you’re going to spend down to breakeven.
That’s where you’re going to go. You will spend an unlimited amount till you get to that point and so you might be able to spend 50,000 to get to that breakeven on non-brand terms in shopping and there’s a huge halo effect on there.
But if you can move the conversion rate up, even just a fraction by doing CRO, you might be able to spend a hundred thousand dollars at breakeven and you just increased your market share dramatically and all you had to do was incrementally increase your conversion rate on the same traffic that allowed you to capture a larger segment of it. And any time that person comes through to your site and converts on non-brand, that is a win for you and a direct loss for your competitor.
There is no, “I got some and maybe they got some.” It’s you got it and they didn’t like it. That person’s not probably buying that same thing from two sites at the same time.
Right. That’s a great point.
That’s like the warm, fuzzy. Like every new customer I get is a customer my competitor didn’t.
And do you own that data now. You can continue to market to them and you’re going to get that lifetime value out of them. that’s the data I was talking about earlier.
Mm-hmm (affirmative). Yeah. So if you really do want to win and that is your desire to capture market share and push your competitors around and own the customers in your space, you have to be doing both of these things.
If you do CRO and you’re not driving traffic to your site, number one, you’re probably not able to get enough testing done because you don’t have visitors unless you have phenomenal organic traffic, but you want to capitalize on that. And every investment in CRO is magnified by increasing your traffic and going from that $50-100,000 in ad spend on non-brand to capture an additional 30% of the market.
Let’s talk about that for a minute. I think there’s different ways that CRO and traffic work together at different sized companies. When you start thinking about, okay, there’s the enterprise, of course it makes… It should be easy to prove that out.
You’re spending X amount, you’re getting a Y ROAS, how do you just increase that conversion rate and all the numbers go up? But as a smaller brand who can’t do testing because they don’t have enough traffic, to do meaningful testing. I think it’s interesting that there are a lot of ways that you can help brands that are smaller but I think we should talk about what that looks like at each step. What are the goals for a small brand on the traffic side? What should they be?
As a small brand, you are growing and you have to look at the future. It’s not a… If you are a small brand looking at profit now and that’s how you’re managing your business, it’s really going to be difficult to scale and grow.
You almost have to be able to askew now profits to say, “Look, I’m not going to be hugely profitable now but I know I’m going to be really profitable in six months to a year.” And just extending your horizon out. And so your traffic driving is really… It’s going to come from paid avenues because you can’t throw a site up and expect organic traffic overnight. Google doesn’t work that way, Bing doesn’t. It’s not going to happen. And so you are going to be building that traffic and awareness with paid search or paid social.
Somewhere somehow, it’s going to cost you. And if you do SEO, you’re spending money now for investment later and if you do it yourself, it’s time versus money, but there’s a cost to getting that traffic.
And so the clean, clear data from a small business from paid search that you can see the queries allows you to start diagnosing where some opportunities are for improvements because if you’re using and again, I’ll [inaudible 00:20:08] on smart shopping campaigns, but shopping campaigns in e-commerce is a huge opportunity for traffic. Shopping is generally and this is a horrible, broad statement, but generally cheaper per click than text ads.
And if you can’t see the search queries, you really don’t know what your conversion rates should be or could be because in a smart shopping campaign, they could be searching for brand terms and non-brand and remarketing all in the same campaign and all three of those sources of traffic should have different conversion rates.
Your brand terms should be higher than remarketing should be higher than non brand. And if they’re all bucketed in one, you really don’t know okay, if I increase my conversion rate month over month, was it because more people knew about me? Was it because I had more remarketing clicks? So you have to be able to break that out.
So step one is, make sure you have somebody that can break your campaigns out and give you that nice clean data to say, “This query three months ago was converting at 1%, the same query and same product,” that’ll be important as well, “is now converting it this percentage and it went up. So we made some improvements.”
Without that clean, clear data, it is going to be different to do some of that measuring as a small business when you don’t have the brain power of Jon and The Good behind you doing that testing for you and all that insights.
Yeah. Great point. Yeah. Having that legacy data really does help jumpstart things later as well. It gives you a great stepping stone to make the future decisions with this firm. You can see trends and this can be really important there.
Yeah. On the conversion side for a smaller brand, I think this is where you focus a lot more on the qualitative side of data. You’re not looking as much at the analytics or you’re not doing A/B testing because you just don’t have enough traffic to get a return on doing that effort.
But this is where you can just start talking to consumers. This is where you could do the user testing side, where you’re going out and talking to consumers, asking them to complete tasks on your site while you record your screen in their audio and they are doing a think-out-loud protocol where they’re telling you what they’re thinking as they go through these tasks, while you’re watching them do it.
You’re going to learn so much. You’re going to really have a great perspective at that point. And if you’re able to just do that, you will be ahead of 90% of smaller brands because 90% of smaller brands are not talking to their consumers which is shocking but true. Whenever we engage with them, that’s the first step we ask them to do.
Give me an example real quick of what that task would look like. Because I’ve heard you say task a lot, but if I’m going to go sit down with my mom for example, give her my computer and say, “Hey, do this.” Generally what’s a good test for her brand?
Yeah. Well, the first thing you should do is not ask your mom. Ask somebody who is going to be brutally honest.
That’s true. Mom thinks I’m great no matter what.
Exactly. Yeah. There’s a great book called The Mom Test on how to ask people the right questions and who to ask. It’s a great short read. It’s probably 80 pages or something. Well done book, definitely check it out, The Mom Test.
What I would highly recommend is you sit down and you just say, do a five second test first. Okay. You show them the homepage. What do you think we sell? What is our value prop? Okay. Do people get it right away? Right. So they have five seconds to look at the page and do they understand it. The reason we set that at five is generally that’s even being gracious. Generally, if people are going to bounce, they’re going to bounce within that first five seconds.
Because they clicked on that ad, you paid to get them there and then something that’s not aligning as I talked about earlier between that ad and experience on your site. We want to find out what that messaging is, that’s resonating and if there’s one even there.
The second thing that you should really be thinking about is what is the journey that they take through your site. And so you could just say something like pretty generic, find the right product for you and try to buy it. What happens is somebody goes in, let’s just say you’re selling shoes.
Okay. Well, I wear a size 15, 16 shoe. So first thing I’m going to do, I know that most manufacturers don’t make shoes in that size or they have very limited options. First thing I do as a consumer is I go and I try to filter by the size and I want to see if they have my size in the filter list.
And if they don’t, I’m gone because I don’t want to waste my time looking at issues. I can’t own. This is a great example of my task would be getting in and seeing that and immediately going into the category I think that interests me and trying to filter, but if you don’t have a filter, now I have to click through every pair of shoes, see what sizes you have available.
I’m just going to leave. I’m not going to invest that time. As a shoe manufacturer or reseller, what you’re seeing is, well, yeah, I have all those sizes listed on the product detail pages. It’s easy to find the sizes, but as a consumer, I’m saying, “No, it’s not. I want that earlier.” So then you say, “Okay, how do I fix that?”
Well, on a product category page, I need to add in a size filter. So it can be just as simple as that, is understanding what is the journey the consumer’s taking. As you complete five, six, 10 at most of these interviews, you will learn so much information really quickly.
Yeah. And as you’re a smaller brand starting up in this space, shameless plug for you, but you do have a program now that helps companies that are not yet at the full on CRO with The Good. It’s like all right, we know that there are stepping stones too. If you’re doing a hundred thousand dollars a year on your business, you’re probably not a $10,000 a month CRO client. Just logic says that.
Well, yeah. Look, you need to have at least, at least 40-50,000 unique visitors coming to your site a month in order to do it has stained with any reasonable expectation of a return and so what most people think about when they think about conversion optimization is testing.
That’s where their mind immediately goes, is doing A/B on-site testing. And unfortunately, while that’s where CRO started, it’s really evolved much more to overall customer experience optimization. And yes, the conversion is still the metric we’re optimizing for but we’re no longer just doing tips and tricks to get people to convert. That is conversion optimization a decade ago.
I changed the button to blue and made a million dollars.
Right. Yeah. The reality now is you’ve got to be looking at this whole sale customer experience and the brands and competitors to the good that have been thriving are those who take that more holistic approach. And those that are not seeing growth or the results are those who just immediately go to testing and try to do testing for everybody. It’s really outdated to do that approach now.
So I think if we had a punchline, it’s like, you need to be doing both and there’s different stages on both sides. Like on the ad side, it’s if you’re starting out, there’s certain things to be doing and on the CRO and improve your conversion rates side, there’s certain things to do.
But the goal is the same regardless. It’s grow the business, but you’re growing it through two legs versus just do this one, then this one, then this one and then this one. It’s much better to continue doing it and understand that neither one of them, there’s not an end date. I think people so often… I think probably more often on the CRO side think about, “Oh, I’m just going to do CRO for six months and then I’m going to be fine. Once I get my conversion rate to one and a half percent, I’m going to make so much money, it’s going to be great.”
And they will. But the reality is you’re never optimized, you’re always optimizing. And that’s the mindset that needs to be taken because the Internet’s always changing. Consumer habits are always changing. Your ad sets should always be changing or at least they’re being revised on a regular basis and reviewed. Your customer base is always changing. The marketing methods. So much of e-comm is in flux at all times that once you stop optimizing, will you see the benefits of that? Yeah. You’ll continue to see some benefits but that starts to have a diminishing return.
Well, it does. As you improve your conversion rate over six months, let’s say, you got to a place where you can spend more money, as you’re spending more money and moving higher up the funnel, your conversion rate goes back down because you’re getting less qualified traffic.
So you have to constantly be evolving your site to improve, oh, as we got less qualified traffic, there’s still people that are searching for our products and services just at a more broad term. We need to adjust the site for that and make sure that those people are getting experienced that their thinking even if they’re further up the funnel so that we can continue scaling and pushing the business.
That’s an interesting thought. It really leads me to people who think that would you stop optimizing your traffic generation methods? No. You’re going to continue to want to get the most out of your traffic spend. So why would you ever stop optimizing your site?
You’re not going to just walk away from your ad agency and say, “Okay, my ads are set up. They’re on autopilot. They’re going to run like that forever and I’m going to continue to get money here.”
No, that’s not how that works. You have to continue to put in the effort. It’s the same thing with anything in life you’re going to stop lifting weights, you think you’re going to come back in nine months and still be able to bench what you benched nine months ago? No.
I was thinking the exact same thing. I was like, my wife is a great example. She doesn’t listen to this podcast so I can talk about her, but she’ll work out and get in shape for a big group trip we’re going to go on this summer and then she’ll stop working out and then inevitably, she has to work out again to get ready for the next trip because she didn’t continue improving and moving to the level that she wanted to get to.
Yeah. Same exact theory. Your CRO is your site exercise regimen and you don’t stop working out as you get older.
I like that.
In fact, generally you have to work out more because metabolism. But-
I love it.
It’s important. People don’t give it the credit they do, unfortunately, but hopefully we’re going to break down those barriers together.
We already do with a lot of clients and I’m appreciative of that and I think that those clients are too, and they’ve recognized it and see it and continue to reap the rewards. So thank you, Ryan. This has been a great conversation. I really appreciate it.
Thank you, Jon. This is good.
Thanks for listening to driving convert with Jon MacDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at driveandconvert.com.
About the Author
James Sowers is the Director of The Good Ventures. He has more than a decade of experience helping software and ecommerce companies accelerate their growth and improve their customer experience.