Conversion as a Service

ContentsIntroduction ......................................................................................................................................... 1

Traditional Interactive Marketing ................................................................................................ 2

Conversion Marketing...................................................................................................................... 3

Challenge of Conversion Marketing............................................................................................. 1

Innovating for Competitive Advantage............................................................................. 1

Achieving Business Goals....................................................................................................... 1

Meeting Consumer Expectations......................................................................................... 1

The Case for Conversion Marketing................................................................................... 2

Choosing the Fastest Route to Revenue .................................................................................. 2

Integration .................................................................................................................................. 2

Reporting .................................................................................................................................... 2

Testing ......................................................................................................................................... 2

Targeting..................................................................................................................................... 3

Expertise ..................................................................................................................................... 3

Infrastructure ............................................................................................................................. 3

Vision............................................................................................................................................ 3

Conversion Marketing Options.....................................................................................................4

Platform Add-ons.....................................................................................................................4

In-house Development ...........................................................................................................4

Conversion Marketing Vendors ...........................................................................................4

A New Model: Conversion as a Service .................................................................................. 5

Outcomes…Not Software ...............................................................................................................6

Transparency: Trust between clients and providers.................................................... 7

Alignment: Measurable business objectives ...................................................................8

Value: Revenue attributable to new business ................................................................8

Conclusion ...........................................................................................................................................9

IntroductionConversion is a priority for online businesses today because it is the lasthurdle in turning consumers into customers. Today, online businesses havemultiple options when choosing conversion solutions that improve onlineconsumer experiences. This paper investigates various conversiotechnologies and vendor categories available to online businesses andmakes recommendations on how to pick a route to revenue.

Interactive marketing budgets for enterprises are projected to grow at a15-20% compound annual growth rate through 2014, toppi(Forrester, 2010). Of this, companies are spending only 3% of their budgetson improving conversion, with the rest going toward traffic generation.This huge spend is driving increased traffic to sites, increasing onlinerevenue, and fueling an explosion of solutions designed to attract andengage consumers. Yet despite all the attention being given to the space,conversion rates continue to hover around 3%heading in the same direction, it is the companies who do momarketing spend that will break away from the pack. This requires afundamental shift in marketing to better align interactive marketing spendwith revenue generated by online conversions.

Figure 1. Average conversion rates

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online businesses today because it is the lasthurdle in turning consumers into customers. Today, online businesses havemultiple options when choosing conversion solutions that improve onlineconsumer experiences. This paper investigates various conversiontechnologies and vendor categories available to online businesses andmakes recommendations on how to pick a route to revenue.

Interactive marketing budgets for enterprises are projected to grow at a20% compound annual growth rate through 2014, topping $55 billion

(Forrester, 2010). Of this, companies are spending only 3% of their budgetson improving conversion, with the rest going toward traffic generation.This huge spend is driving increased traffic to sites, increasing online

an explosion of solutions designed to attract andengage consumers. Yet despite all the attention being given to the space,conversion rates continue to hover around 3% (Figure 1). With everyoneheading in the same direction, it is the companies who do more with theirmarketing spend that will break away from the pack. This requires afundamental shift in marketing to better align interactive marketing spendwith revenue generated by online conversions.

(Forrester, 2010). Of this, companies are spending only 3% of their budgets

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Traditional Interactive MarketingIf you bring them, they will buy

For most online businesses, marketers monitor channels and touchpointsto identify whether SEO, SEO, SEM, email, display, and affiliates are drivingvisitors to the site. They might work with merchandisers on promotionsand offers to generate new activity on the site, but their work is essentiallydone as long as the site traffic is sustained. The breakdown is that themetrics governing marketing success focus on delivering people into thepipeline, but not on conversion to revenue. This creates division betweenmarketers and merchandisers where conversion rates remain low, but thelack of end-to-end accountability leaves the question open as to whetherthe right people are being drawn to the site or the onsite experience failsto seal the deal.

To overcome the barriers, companies are beginning to adopt a lead-to-revenue management model (Forrester, 2011). This model suggests thatmarketing is uniquely positioned within the company to monitor andmanage the capture and conversion of business throughout the customerlifecycle. This process and focus on revenue generation rather than trafficand leads is known as “conversion marketing.”

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Conversion MarketingHelping consumers complete online conversions

Is it really that simple? For e-business, it should be. In reality, conversionmarketing is a complex combination of software, services, and knowledgethat work together to eke out every last bit of revenue for businessconducted online.

Conversion marketing is an approach to online conversion, not simply acollection of technologies deployed on a site. It includes customerexperience management, thoughtful use of web analytics, personalizingthe consumer experience, and closing the feedback loop to bring the voiceof the customer into product decisions and site design.

Typical solutions in the space include:

Analytics. Traffic patterns, sources, destinations, and abandonmentin relation to conversion rates, not simply site optimization.

Recommendations. Behavioral analysis identifies products andcontent relevant to customer intent.

Targeted Offers. Targeting drives the right promotion to the rightperson based on behavioral and demographic information.

Ratings and Reviews. Increase conversion rates, capture voice ofthe customer feedback, and earn the trust of visitors with user-generated ratings and reviews.

Email Personalization. Email with embedded recommendationsand chat feels tailored and personal – and provides your customersa compelling reason to continue their online experience.

Chat. Consumers abandon sites after as few as three clicks. Useproactive chat, reactive chat, and exit chat to convert consumersquickly.

Click-to-Call. When visitors move from the web to the phone, click-to-call supports cross-channel conversions without losing thecontext of the conversation.

Voice of the customer. Critical feedback about product offerings,services, and online experiences captured through miningstructured and unstructured data to measure satisfaction, identifymarket trends, and create opportunities to innovate.

Conversion marketing is not simply a last, desperate act to get consumersto conduct business. Rather, it is a prolonged engagement with consumersto find likely customers, inform them about your products or solutions, andpersuade them to convert onlinethrough support or re-engagement campaigns. These phases ofengagement form the basis of the customer life cycle, and variousconversion marketing solutions can be used to help ease the transitionfrom one phase to the next (see below

Figure 2. Conversion solutions aligned with consumer life cycle.

Sales and marketing groups may want to think of the role conversionmarketing solutions plays in moving consumers through the sales funnel. Inthis case, the solutions in the discover phase of the customer lifecycle arethe things that move people into the funnel, while the solutions in the reengage phase bring consumers back into the funnel. The heart ofconversion marketing takes place within the funnel using the solengage and convert consumers on your site. (Figure

Figure 3. Conversion marketing solutions in the sales funnel

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Conversion marketing is not simply a last, desperate act to get consumersto conduct business. Rather, it is a prolonged engagement with consumersto find likely customers, inform them about your products or solutions, andpersuade them to convert online – then maintain a relationship post-sales

engagement campaigns. These phases ofengagement form the basis of the customer life cycle, and variousconversion marketing solutions can be used to help ease the transition

see below).

. Conversion solutions aligned with consumer life cycle.

Sales and marketing groups may want to think of the role conversionmarketing solutions plays in moving consumers through the sales funnel. In

in the discover phase of the customer lifecycle arethe things that move people into the funnel, while the solutions in the re-engage phase bring consumers back into the funnel. The heart ofconversion marketing takes place within the funnel using the solutions thatengage and convert consumers on your site. (Figure 3)

. Conversion marketing solutions in the sales funnel

to conduct business. Rather, it is a prolonged engagement with consumersto find likely customers, inform them about your products or solutions, and

marketing solutions plays in moving consumers through the sales funnel. In

utions that

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Below is a brief taxonomy of things to consider when mapping out yourconversion marketing strategy. It provides a high-level overview of theelements required to drive conversion throughout the customer lifecycleand demonstrates the complexity involved for online businesses.

Table 1. Conversion marketing matrix by solution type and customerlifecycle.

Discover Engage Convert Re-engage

Technology • SEM (keywordoptimization)

• Socialnetworking(brandadvocacy,social sites,communities)

• Targeted ads• Organic search

(landing pageoptimization)

• User-generatedcontent(ratings andreviews, blogs,wikis, forums)

•Recommendations (similar)

• Ratings andreviews

• Onsite searchoptimization

• Offeroptimization

• Chat (reactive)• Co-shopping

•Recommendations (related)

• Chat (proactive)• Guides andtutorials

• Callback andclick-to-call

• Email(recommendations, click-to-chat)

• Retargeting• Mobile alerts• Surveys

Customerexperience

• Continuity (siteshould reflectlanguage anddesign of ads,links)

• Navigation (task-based toshorten flow)

• Labels (clear andlogicallyordered)

• Search (easywith usefulresults)

Analytics PPC validation;bounce rate

Clickstreamanalysis; linkpopularity; onsitesearch results(what are peoplefinding, or not)

Conversion rates;abandonment

Click-through rates

Personalization Ad targeting Recommendations;offer optimization

Recommendations;proactive chatlaunch

Recommendations;retargeting

VoC Social mediamonitoring;mining user-generatedcontent

Mining reviews,chat transcripts,and co-shoppingconversations

Mining chattranscripts

Survey results

Challenge of Conversion MarketingSimultaneously meeting consumer and business goals

Organizations face numerous challenges in trying to convert consumersonline – in particular, how to meet consumer expectations and businessgoals while continuing to innovate to maintain a competitive edge.Balancing these objectives is difficult in a world where visitors to onlinebusiness are largely anonymous and individual motivations areunknown.

Innovating for Competitive Advantage

Online businesses are highly competitive — trying to outpace rivals inkey metrics such as page views, average order value, and conversionrates. Investing in conversion marketing allows businesses to engageconsumers and keep them onsite to complete conversions instead ofabandoning to a competitor. Adding real-time behavioral analysiscapabilities to a site can drive keyword optimization for SEM spend,personalize landing pages with relevant content and productrecommendations, serve targeted offers, and trigger the use of chat toengage consumers who are confused or at risk of abandoning a site.These solutions provide clear advantages to businesses who deploythem using industry best practices.

Achieving Business Goals

A common disconnect in the consumer-business relationship occurswhen businesses confuse site visitors by substituting their own goals forthose of the consumer. For example, a financial services company mayfocus on driving visitors quickly to complete online applications, whileconsumers come to research plans, options, and account types and mayfind this immediate push to convert off-putting. Conversion marketingsolutions can solve this conflict by using behavioral targeting to identifyproducts or services that match visitor intent and ratings and reviews toprovide peer opinions. This kind of research assistance helps consumersfeel comfortable with their choices and meets the business objectives todrive conversion without sacrificing the consumer experience.

Meeting Consumer Expectations

A strong voice-of-the-customer program provides the feedback thathelps businesses understand how consumers view their onlineexperience. These programs gather consumer perceptions and feedthem into systems to drive change and align business objectives withconsumer objectives. These programs support customer interactions atkey decision points identified during the analysis of customer pathsthrough a site, such as the point where they add items to a cart, beginto complete a form, or even abandon the site altogether. Unfortunately,

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businesses rarely assign teams to identify enabling technology and howto use it to improve the online consumer experience.

The Case for Conversion Marketing

The range of conversion marketing solutions and the level of expertiserequired to deploy and manage multiple solutions effectively — so thateach enhances the other — makes it difficult for online businesses tomeet consumer goals and business goals while continuing to innovaterapidly enough to maintain a competitive advantage. Vendors whosesole purpose is to improve online conversion rates can provide industry-specific knowledge, operational expertise, and the infrastructure andexperience to select and deploy the solutions that will best serve bothconsumers and businesses.

Choosing the Fastest Route toRevenueA shopping list for a conversion marketing solution

Before you begin exploring the landscape of conversion marketingsolutions, keep in mind these basic tenets for evaluating the suitabilityof the solution and the ability of the company to stand behind it.

Integration

Conversion marketing platforms provide an integrated view of the fullbreadth of conversion marketing solutions so the customer experience,rather than the technology, remains the focus. This also ensures that asnew solutions are introduced into the marketplace, they can beintegrated into sites without disruption.

Reporting

Reporting should allow a high-level view of consumer activity and anability to drill down to activity at the conversion level. It detailsconversion lift and calculates the impact on revenue. This enables thekind of transparency necessary to trust the decisions of any conversionmarketing solution.

Testing

Marketers should not try to guess how visitors will respond toconversion marketing solutions; they should run tests and track theoutcomes against a control. Online testing improves the consumerexperience and drives metrics that optimize landing pages, content,

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forms, promotions, and technical decisions to improve site usability,improve relevance, and boost conversion rates and revenues.

Targeting

Key to successful conversions is the ability to identify behavior andtarget individuals with products, content, and live interactions. Businessrules should be available and triggered based on visitor behavior.

Expertise

Regardless of the route you choose, solution providers shoulddemonstrate expertise in dealing with your business. Solutions shouldbe finely tuned to industry needs, and vendors should possessexperience within each industry to implement best practices forsuccess.

Infrastructure

Whether you build your own or choose a vendor solution, ensure thatyou have adequate infrastructure to meet the performanceexpectations of consumers. This includes scalable data centers and tagmanagement to reduce IT burden and page load times.

Vision

Conversion marketing is often reduced to point-solution status byvendors whose expertise only covers one aspect of the market.Consider the ways you might use conversion marketing solutions onyour site and choose a vendor that will help meet your goals both todayand in the future.

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Conversion Marketing OptionsPlatform add-ons, in-house dev, and conversionmarketing vendors

Choices for conversion marketing solutions typically fall into threedistinct categories: add-ons from e-commerce platform vendors thatoffer some kind of basic capabilities; solutions built in-house; or a seriesof best-of-breed purchased solutions that must be threaded together.Each option would deploy a common set of technologies with varyingabilities to support them.

Platform Add-ons

Online businesses who seek to beef up their conversion rates want tomake sure they are making the most of what they already have.Invariably, they look to e-commerce platform providers whose solutionsare already installed and licensed to see if they offer the features theyneed. However, while these solutions excel at the management anddelivery of content and analysis of data, they are likely to only providebasic conversion marketing capabilities – and rarely are the capabilitiesseamlessly integrated. In addition, the add-ons are often acquiredtechnologies that require new installation and have their own userinterfaces and reporting tools. Thus, the only real benefit is the easewith which they are licensed.

In-house Development

Some of the largest companies may be tempted to build pieces of theirconversion marketing infrastructure in-house. With teams dedicated todata and merchandising, it might seem an interesting proposition tobuild upon their knowledge of their customers and markets andcombine them with existing analytics and e-commerce platforms tosolve their problems. But the sheer number of solutions available on themarket makes it impossible for internal teams to compete with theavailable capabilities of the ever-shifting conversion marketing industry.

Conversion Marketing Vendors

While solutions that focus on increasing conversions appear the be thebest choice for improving the bottom line for online businesses, mostvendors are adept at handling one or two of the conversion marketingsolutions that span the customer lifecycle. Few vendors can handlemore than that, and even fewer can measure the effectiveness of eachindividual solution against the other to determine which onesdemonstrate the greatest value. Vendors of the latter sort focus less onpoint-solution technology than the infrastructure to deploy and managethe application of it on behalf of the online business.

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A New Model: Conversion as aServicePlace the burden to perform on solution providers,not online businesses

The Conversion as a Service (CaaS) model (Figure 4) allows clients totake advantage of the expertise a vendor accumulates over years ordecades, rather than either developing and maintaining the expertise in-house or outsourcing the expertise through a third-party services firm.Opting for vendor expertise ensures an enduring knowledge base forthe lifetime of the relationship and real-time program optimization asindustry best practices evolve. CaaS vendors must understand yourbusiness, include a mix of conversion technologies, and provideconversion design and optimization services to ensure the bestperformance possible.

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Figure 4. Conversion as a Service binds all facets of ConversionMarketing.

Outcomes…Not SoftwarePay-for-performance models lead to shared success

Key to the notion of Conversion as a Service is the use of outcomes tomeasure performance. The success or failure of a solution is not basedon whether providers successfully deploy software, but on whether ornot the solution delivers desired, measurable results. In this model,providers and clients forge a relationship which aligns their efforts tomeet a set of agreed-upon metrics that determine whether or not therelationship is valuable.

Figure 4. CaaS model delivers results to customers

In most cases, the metrics used by online commerce revolve aroundgains in incremental revenue directly attributable to a solution provider.Whether the specific metric is an increase in average order value,increase in cross-sell and upsell, or a decrease in cart abandonment, thesolution provider must be able to clearly demonstrate that an increasein revenue can be tied to the presence of their solution. There are threegoals for this clarity.

Transparency: Trust between clients and providers

At the heart of pay-for-performance models is trust that the agreedupon success metrics are accurate and verifiable. That means the mathmust be as simple as possible and the ability to inspect the data mustbe readily available. This requires a level ofof the vendor to share with clients both the process for collectingthe data and for measuring the results.

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delivers results to customers.

In most cases, the metrics used by online commerce revolve aroundgains in incremental revenue directly attributable to a solution provider.Whether the specific metric is an increase in average order value,

sell and upsell, or a decrease in cart abandonment, thesolution provider must be able to clearly demonstrate that an increasein revenue can be tied to the presence of their solution. There are three

t between clients and providers

performance models is trust that the agreed-upon success metrics are accurate and verifiable. That means the mathmust be as simple as possible and the ability to inspect the data must

available. This requires a level of transparency on the partof the vendor to share with clients both the process for collectingthe data and for measuring the results.

gains in incremental revenue directly attributable to a solution provider.

sell and upsell, or a decrease in cart abandonment, the

of the vendor to share with clients both the process for collecting

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Alignment: Measurable business objectives

Organizations often use metrics to define success for groups andindividuals, to guide their activities, and to grade their performance.Similarly, vendors should be incented to meet the business objectives ofan organization. In most pay-for-performance models, vendors definethe metrics by which they will be graded. While this model forcesvendors to perform, it does not guarantee that success will directlyalign with business needs. The models result from negotiations betweenvendors and clients to define the metrics and describe success.

Value: Revenue attributable to new business

The goal of most online business is to generate revenue. If the systemfor measurement is transparent and the vendor goals are clearly alignedwith client objectives, then the amount of incremental revenuegenerated by a vendor becomes the final metric for success.

ConclusionPulling together all the technology and expertise to manage aconversion marketing program is incredibly difficult, and choosing thewrong route to revenue through conversion marketing is costly in bothtime and resources. By considering all these topics, you will betterengage your customers and increase revenues as a result. It may betempting to rely on a series of point solutions or adopt a “singlevendor” strategy and simply license technology from a platform vendor.However, choosing a conversion marketing vendor who delivers the fullrange of solutions throughout the customer lifecycle and adopts theConversion as a Service model with shared outcomes will provide betterresults and enable you to adapt and grow as your needs c

30501 Agoura Rd, Ste 203Agoura Hills, CA 91301Toll-free: 800.868.0898Main office: 818.575.2100Fax: 818.575.2105www.touchcommerce.com

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Pulling together all the technology and expertise to manage aconversion marketing program is incredibly difficult, and choosing thewrong route to revenue through conversion marketing is costly in both

idering all these topics, you will betterengage your customers and increase revenues as a result. It may betempting to rely on a series of point solutions or adopt a “single-vendor” strategy and simply license technology from a platform vendor.

choosing a conversion marketing vendor who delivers the fullrange of solutions throughout the customer lifecycle and adopts theConversion as a Service model with shared outcomes will provide betterresults and enable you to adapt and grow as your needs change.

vendor” strategy and simply license technology from a platform vendor.choosing a conversion marketing vendor who delivers the full

Conversion as a Service model with shared outcomes will provide better