The Million Dollar Optimization Strategy - Andre Morys - ConversionXL Live 2015

© 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

http://www.web-arts.com


© 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 theworldwide alliance of leading

conversion optimizationcompanies

@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:

! 2.2m Profit

@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 week500 vs. 550 conversions

+10% Upliftsignificant - wohoo!

2 weeks1000 vs. 1030 conversions

+3% Upliftnot significant - :-(

Run your experiments longer to get valid insights!

@morys




A/BTesting

70% don‘t know that there is a Phase 220% 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

You are too dumb to buy here.

@morys

@morys

@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


#1Is the change bold enough that it will be perceived by

users?

#2Does the variation have

enough contrast to change the behavior of users?

#3Does it use psychological /

social principles?

#4Is 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

[email protected]

Tel. +49.6172.68097-15

www.web-arts.com

Thank You!