In this webinar, we provide a tour of the current industry challenges, introduce the broader scope of conversion optimization and how it is able to impact revenue growth, walk through a series of examples highlighting some of the common mistakes that brands large and small make that hurt their online experience, and highlight improvements they can make to that can lead to better online revenues.
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All right, well why don’t we get started. It’s a couple of minutes after. We’ve got a lot to cover today so I want to make sure that we leave enough time to do so, and have time for questions and answers afterward.
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We have, it looks like quite a few people on today. That’s just great. I’m excited about this. Why don’t we jump right in. I’m going to bring the slides up a little bigger so you all can see those, and I’m going to disappear off the screen for a minute. You should be able to see them a little bigger now, so you can read and follow along. Let’s jump right in.
My name is Jon MacDonald. I’m the CEO of The Good. We help eCommerce companies increase their sales. The way that we do that is through converting more of their existing website traffic into buyers. Some examples of brands that we’ve worked with on the right there, brands both large and small. Technically what we do is called conversion rate optimization. We’ll dive into a little bit about what that means as we move forward today.
Let’s look at the agenda real quick. Now, we’re going highlight the state of the eCommerce industry, including some of it’s biggest challenges. We will also get into the secret of eCommerce growth, and we’ll walk through some examples, so you can get a more concrete picture of what we’re talking about. Finally, we’ll get into the Q&A as well.
Old eCommerce isn’t working anymore. It’s changed quite a bit over the last decade. In fact, just to give you an idea, there’s been a ton of retail store closures. By April of this year, only four months in, there’s been at least nine major retail bankruptcies. In fact, just today I saw that Toys R’ US even filed for bankruptcy. Some big names that are disappearing pretty quickly. That’s as many that have filed for bankruptcy in all 2016. There’s quite a big number there. JCPenney. Radio Shack. Macy’s. Sears. They’ve all announced major store closures. Sports Authority has liquidated. Payless filed for bankruptcy. Abercrombie & Fitch is just hemorrhaging at this point. Several apparel company stocks have just hit multi-year lows. Lululemon. Urban Outfitters. American Eagle. Big names that we all know.
All of these companies have something in common. They’ve all struggled to adapt to the move to digital and eCommerce. At the same time, the number of wholesale brands selling directly to consumers in this year alone has grown by over 71%. That’s a big gain in the number of people selling online. As you can tell, everybody is moving in that direction because it works.
What’s the story here? Is it simply that they just couldn’t compete in digital? Is it something more? Why are these companies floundering while there are others that are rising? The answer is that the game has just fundamentally changed. Many of the brands we just mentioned failed to take these changes quite seriously. As the internet and social media have grown in use, the power of the consumers has grown, and the old methods just don’t cut it anymore.
The fact is that consumers now expect an effortless buying experience. Your visitors are really only on your site for one or two reasons. I say this all the time. Researching and finding the best product for their needs and then buy that product as quickly and easily as possible.
The fact of the matter is that any barriers completing just these two tasks, again researching for that product and buying that product will send your consumers looking elsewhere, and your conversion rate will suffer. That’s why the average conversion rate for the top 500 eCommerce sites is only 3.32%. We actually see overall across all of eCommerce that conversion rate is closer to around 2%.
Meanwhile, Amazon has a purchase conversion rate of 74% for their Prime members. That’s huge. Especially compared to that three and a third percent for the top 500 other retailers. Even for non-prime members, it’s still at 13%, which is quite large again. 10% greater than the average for the next 500 retailers. That leads us to the next question.
How the heck is Amazon converting 22 times higher than the top 500 eCommerce sites? A lot of brands have this question, and we get it from our clients a lot. As Fortune magazine recently reported, they reviewed the transcript over the last, I think it was Q2 of 2017, they looked at all of the earnings calls and corporate events such as investor’s days and looked at the transcripts and a trend emerged. Amazon came up a lot. It was mentioned a staggering 635 times in that one quarter, while President Trump came up just 162 times, and wages, a huge impact again to their businesses only discussed 111 times. It’s become even more pronounced over the past 30 days with Amazon garnering 165 mentions compared to only 32 for Trump and 22 for wages. It’s only gaining steam over the next quarter.
Why are they crushing it? What are the successful eCommerce companies like Amazon, what’s their secret to eCommerce growth? To compensate for low conversion rates, the standard practice for most brands has been to do things like increase paid media spend, offer deep discounts, rely on best practices instead of actual on-site consumer behaviors, but those tactics rarely make up a significant lasting impact so the brand is grossed.
The key ingredient to successful eCommerce brands is that they’re investing heavily and optimizing the online consumer experience. They’re basing changes on their website on the actual clicks and movements of visitors. This is an important distinction. They’re using analytics and testing. Data that their site’s visitors are producing to make incremental improvements that slowly but effectively increase site engagement and conversions. How does this work? How exactly are they optimizing? How can you optimize for your consumer experience, and how do you know what to change to begin with?
The answer is pretty simple, listen to your consumers and you can use conversion rate optimization to help you listen to your consumers. It helps you make data-backed improvements to your sites. I’ll explain a little bit more, but really you want to understand how the consumer uses your website, explore different types of analytics which we’re going to cover next, and then experiment and iterate to improve your site.
There’s two main types of data that we typically look at here at The Good. The first way to hear from your target audience is what’s called qualitative data. With user tests, you can hear recordings from your target audience in their own words about what they’re having trouble on your site in doing as they complete the activities. Now, by activities I mean they’re trying to do those two things; research and find the best product for their needs and buy that product. We run lots of user testing for our clients and I’ll show you some examples of what kinds of insights that can bring out this week as we continue today.
In addition to just user testing, you can do surveys to get feedback directly from your consumers about where they’re having trouble, about where they’re abandoning. You can do interviews. A key input that I think a lot of eCommerce brands, or we see that a lot of eCommerce brands ignore is data from customer service. Talking to your customer service team and having a good understanding of what challenges people are calling in with, can help you to optimize your website pretty clearly.
The second way to hear from your target audience is what’s called quantitative data. When we work with brands, we work with them to track every click and movement that their site visitors are taking. We do that in an anonymous and aggregated fashion. There’s no personally identifiable information there, but things like analytics. We have Google analytics or any of the big analytics packages out there. Heat maps, scroll maps, click maps, all these things, pages and content that your consumers are engaging with. Basically, analytics can tell you where your visitors are having problems, and user testing surveys can tell you why.
It really comes down to using that data to make iterative improvements that have a continual ongoing improvement effect of your site. Look, there’s tons of digital marketing guru’s out there that are pitching quick win individual tactics. I get it. Everybody wants that one thing that’s just going to result in a big online sales gain, but after nine years of helping eCommerce companies increase their sales, we found that the only way to sustainable and real results is through incremental improvements and that’s truly what’s at the heart of conversion rate optimization. It’s very similar to the fallacy in SEO when somebody says, “I’ll get you on the first page of Google.” There’s no way for them to guarantee that.
How does the incremental approach to conversion optimization work so well? By studying your data, developing insights, creating experiments, and testing strategically. With each new test should come new insights, even if it’s “losing test”, which there are no, in our view, losing tests because you’re always learning something from every test. If you have that insight you can now build upon another test so with new insights come new opportunities to discover even more conversion opportunities and you can further tailor your site to your consumers to make sure they’re getting that customized experience.
The more frequent that you can produce this incremental lift in your conversions, the higher rate of growth you’ll see. You should always be testing. Let’s look at some websites and get into some examples of this. I’ve tried to keep it a little high level. We’ll dig a little deeper here, and just see how common some of these are looking at some really big brands. Let’s look at Costco. We’re going to dive into a few different types of pages through some different sites. We’ll start with Costco looking at their home page here.
We conducted user testing on some major websites just to give you an example of the everyday usability problems that hurt conversions. The fact is that even big brands like Costco aren’t immune to usability problems that hurt their conversions. Let take a look at their homepage. First of all, they have ahomepagee carousel. It’s the rotating banner that just flips through automatically at different imagery. These are almost always a bad idea. If you’ve been following us here at The Good for awhile, you’ve heard us say this and seen it in our inside articles time and time again. The first image, we’ll typically only get one to two percent of clicks on a page. The secondary images in the carousel get even fewer, near zero. If you want visibility for these top items to consider independent space on the home page of where you can house them. It’s going to get a lot more attention. As I mentioned we’ve got a ton of inside articles on our site at thegood.com if you’d like to learn more about this particular conversion pillar.
Second, their navigation has a couple of major mishaps that came up in user testing. They showed their head almost immediately. For example, a couple of visitors tried to go to the Photo Center. They were interested in learning more about what Costco can do to print their photos. The clicked on the button and what happened was it took them to a completely different site. They had a difficult time getting back to the main Costco.com to view different products.
Actually, one user tester thought that they were going to look at photo equipment that they could buy, cameras, things of that sort. When they tried to get back to Costco they clicked on the main logo on the photo site thinking, “Oh, it’ will take me back to the Costco home page.” Unfortunately it does not. They’re essentially stuck in that photo center website and they weren’t sure they were on a different site, and they basically gave up trying to shop. We see challenges like this all the times with our clients. These major roadblocks were found just through initial user testing.
Imagine what a much deeper dive would do if we were able to get analytics and look at heat maps, things of that sort. The interesting thing about this site is their main navigation has three separate sites, including the second link in the navigation which is business delivery that takes you even to another site. Its’ something to be thinking about. I bet if Costco had user tested this, they would find that consumers were put off by this.
Let’s take a look at another one. H&M. Most of us probably know who H&M is. They’re one of the larger international clothing retailers. We’ve asked our testers to find an article of clothing they like, and add it to the shopping cart. Seems pretty simple, pretty open ended. It’s just what you’d like to have for user testing questions. Within two minutes we found a couple of conversion roadblocks that are pretty major. The first item is that their navigation drop down, the first item in there is View All. Naturally it’s going to be the most clicked. You can see on there it says, under Women, category is View All. The rest of the site navigation, you can see the drop down there in the top screen shot has so many options that the user tester started looking through them, get overwhelmed, and then just defaulted to viewing all. I be if we were able to look at their analytics and click map data, we would show that this is the most popular item in the sub navigation.
Once they clicked View All, they were shown a huge wall of products. Naturally the users kept scrolling and scrolling. They wanted to see what products were available under the women’s category. When they didn’t see a product they liked within a couple of seconds, they got really frustrated thinking I have to look through every single product to find the ones that I want and they returned to the top of the page, but there was no easy way for them to get there. Basically what they ended up doing was clicking the back button on their browser, which dumped them back on the home page and having to deal with that daunting navigation all over again.
A few minutes later, once they did find a product they liked, they hovered over that product and a “Shop Now” button appeared. That’s great, right. They found a product, and not they can shop very quickly with one button. They clicked it, but it only opened up a small preview window. It didn’t give them all of the product details, just some quick highlights and a little bit larger picture, something they’ve already seen. From a users perspective, this was extremely disruptive for them because they just wanted to add it to their cart. They were interested in learning more and buying that product. Putting myself in their shoes, if I had selected “Shop Now”, and clicked the button that said, “Shop Now” wouldn’t I want to actually be able to shop for that item. This user certainly did and they were so frustrated at this point that they just wanted to leave the site. We just chalk that one up to another lost conversion.
We also did some tests of Cliff Bars website, or should we say websites, plural. Overall, their design looks great if you’re just browsing for items. It’s very branded. It’s clean. The trouble comes when you know exactly what you’re looking for. If you’ve had Cliff Bars before and you want a specific item, a specific flavor, it’s very difficult to find that. When you do click on the item, it takes you to a completely different website. It’s very jarring to the end user and it results in website abandonment that confuses also, messes up their analytics. When you eventually do make it to the product detail page, there are three different CTA’s. I’ve highlighted those below. There’s a CTA to buy one bar, a twelve pack, or 192 pack. 192. It seems like quite a jump from 12 to 192, but perhaps that’s for another discussion.
Finally, when a user does manage to get the right items into their cart and they click the checkout button, they’re sent to yet a third website. A big part of helping to reduce cart abandonment and increase conversions is providing that cohesive user experience. How well do you think a user flow can be with three different websites at each step of the process? We’ve looked at a number of familiar websites and fortunately on those we can run user testing and get some insights without their analytical data. Unfortunately though we can’t really go a whole lot deeper into the fixes for those brands without their specific data, but the good news is that I can show you a few examples from our clients of who we’ve helped over the years.
A good example is from Xerox. We worked wit them by studying their analytics, doing user testing, and we discovered that the returning visitors had a 60% higher likelihood of purchase than first time visitors. Because of that, we tested a redesign of that home page, converting returning visitors. Doing this resulted in 86.7% growth in conversions to purchase from returning visitors. What we found was that returning visitors wanted very quickly and easily to find the right product for their needs and buy that product, which in most cases meant supplies like ink for their specific printer that they had sitting in their office, and they wanted to make it quick and easy to buy. After we moved on to their product detail pages, we suspected that by reducing contracting content that did not help them find the right product and purchase that would improve conversions. Seems like a reasonable hypothesis. That alone, redesigning the product detail page layout and removing distracting content resulted in an 18.9% growth in just Add to Cart conversions.
Finally, building on that, that okay we can get people to add to cart. We want to increase that Add to Cart. Again, this is all about an iterative experience, learning from one thing and taking the next step and iterating on that test and that learning to improve. We decided to test changes to the call to action. In doing this we were able to understand what resonated. Was it just by supplies, by ink. What exactly would a consumer who was coming to the site see that made the most sense right away? Once we found a winning test on that that had the most positive outcome, we increased their engagement on those pages by 15.2 percent and then increased the amount of conversions by adding to cart to purchase by almost 4%, which if you’re a large retailer like Xerox, has lots of lots of traffic and it adds up very quickly.
This is just a great example of how testing, learning, and continuing to iterate has compounding effects on results. Ongoing experiments like these lead to better and more consumer focused websites that just drives a sustainable, longer term growth. Another example is a bit of a mobile focus, something we haven’t talked about today. This is for a brand called Bridge and Burn. They’re actually local to us here in Portland, Oregon, and are an online lifestyle retailer. Analytics when we first started working with them showed us that visitors that searched converted much better on mobile. This is something we typically see, but we always want data to guide our decision making, so in this case it rang true. If we can get mobile visitors to do more searching, then they’ll purchase higher. Our hypothesis from this data is improving the invisibility of search on mobile and tablet would increase the number of people using the search, which would then have the longer term effect of getting them to convert into a customer.
We tested moving the search functionality outside of the menu on mobile and tablet into plain view for the visitor. You can see I highlighted it here in the image. The results were astounding. The number of sessions using search on mobile went up 41%. In the conversion rate from visits with search went up from 2% to over 3%. Imagine what a 1% gain in conversion can do for a small retailer like Bridge and Burn. This third example is from a faux flower brand named Diane James Home. They sell in high end retailers like Bergdorf Goodman for instance. They’ve made a big push a couple of years ago to go online. It would help them to improve their eCommerce experience.
When we began working with them though, their conversion rate was super low. They put up a website. They didn’t have a whole lot of insight to what consumers were doing and the challenges they were having. We did always start with a comprehensive audit of all of our customers websites as a first step. What we discovered through that audit was that visitors did not realize that the flowers were artificial until over 13 minutes into a visit. 13 minutes to realize exactly what they were looking at. Consumers visited the site, they saw prices that are going to be much higher than a live flower bouquet from a local flower shop, but they didn’t realize that those flower arrangements were of high quality and forever lasting. At that point, the consumer already developed a negative reaction to the pricing, even though those flowers would last forever, and over the life span were a tremendous value compared to buying live flowers all the time.
We call it price anchoring. Based on this discovery, what we found was that we needed to make it more apparent that these were faux flowers as easily as possible. We developed a test to bring creative clarity to the fact that the flowers were manufactured. We landed on the term faux flowers after testing several different high end names that were on brand with their overall brand feel. This helped improve the bounce rate by 52%. It ultimately resulted in an over 50% increase year over year in their online revenue.
This is a great example of how you can pull data from user tests, but not just A/B tests or analytics, and have that flow back into the site. We’ve highlighted how eCommerce success brings back to being, success comes back to being radically consumer focused based on collecting and analyzing data from your consumers, and also being sure that you’re driving iterative experiments and improvements that can lead to exponential growth over time. If you’re wondering what you should do next, we’ve got two resources for you. You can book 15 minutes for us and talk about top 3 things that you can do right away to increase conversions on your website. Just visit thegood.com/schedule and book a time that works for you. There’s a calender option on there.
I also suggest if you’re not already on our weekly insight emails, you should join the tens of thousands of eCommerce and marketing leaders who subscribe to this weekly email list. Just go to thegood.com/sign-up, and we can make it quick and easy. At this point, we’re just about 30 minutes in so I want to make sure that we get to some questions. Remember, you can click on Ask A Question down below on the left hand corner there to submit your questions. We’ll take a minute and see if any questions come in, and start answering.
Dirk asks, How does chat increase conversions? That’s a great question Dirk. We’ve actually been working with a client who started utilizing chat. I believe they’re using Drift as their supplier, but really we tend to be pretty technology agnostic here. Chat has a dramatic effect on conversions because, again, if consumers are looking to do one of two things on our site. They’re looking to research and to find the best products for their needs, and they’re looking to buy it. Chat can directly influence the conversion rate by answering questions right away. The reason I brought up Drift is because they have a nice tool set that allows common questions to get an instant reply via artificial intelligence and send people the resources and specific pages that might be on the site. Something to look into, but overall we find really great success with chat, and it can have dramatic increase on conversions. In fact, you’ll probably notice we even have it up on our site because we do get several people who just have a quick question and want to know an answer but really don’t have the time to dig around the site and look for it perhaps.
David asks, how long does it take to start seeing results with CRO? The idea behind CRO is that you need to have a good base of analytics and again, both data sets, qualitative and quantitative. What we find is we always start with a deep dive conversion audit of a site to help inform a test and plan. We find that every site is unique. The correct answer to this is really that you should start seeing results within a few months, but again there is not one thing that you’re going to be doing on your site that is just going to skyrocket your conversion overnight. If it’s not about one tactic, then you need to start building and growing and learning over time. You’re going to compound those results. You’re going to see them grow pretty quickly, but typically our clients start seeing the results within the first two to three months of working together and testing. That has a really positive effect, because once you start growing, the you start learning. Then you can increase the pace of doing so.
Typically, our clients start seeing a very large return on their investment with us by five to six months in. Jim asks, how large does my business need to be to take advantage of The Goods services? Thanks for asking Jim. This really isn’t meant to be a sales pitch, but I would like to answer your question. I think that we like to have a minimum amount of traffic, and I think that in order to get some initial results, typically it’s a very minimum. We’re looking for somebody to have about 5,000 visitors a month as a bare minimum. Then in terms of revenue, typically if you’re at least doing about a million in revenue a year, that’s around a good size. We can obviously have a conversation, but feel free to email me after the webinar and I’ll put my email address in the chat here if anybody has any follow up questions. Otherwise feel free to email me. I’d be happy to get back to you. If you sign up for our weekly insight emails, those do come from me so you can just reply to any of those as well. It goes straight to my inbox and I’ll be happy to answer any questions.
If there are any other questions I’d be happy to answer them. Maybe we’ll wait another 30 seconds or so and see if any other questions come up. Okay. Well with that in mind, it doesn’t look like there are any more questions so I’m going to sign off. Again, this recording will be available for you almost immediately, and if you signed up, you will get an email for a recording to the webinar here pretty shortly. Again, my email address is here in the [inaudible 00:32:27]. Don’t hesitate to send me an email if you have any questions at all that you think about later on. I really appreciate your time today. Thank you for joining and have a great rest of your day.