Is Conversion Rate Optimization a Dead-End?

A book by conversion agency PRWD that features 17 well known CRO professionals.

Jeff Bezos CEO & President amazon.com

“This year, Amazon became the fastest company ever to reach $100 billion in annual sales. Also this year, Amazon Web Services is reaching $10 billion in annual sales … doing so at a pace even faster than Amazon achieved that milestone.April 5, 2016 Annual Report

“We [CRO practitioners] are the dirt under the fingernails of the digital industry,”

— CEO André Morys of Web Arts in the foreword of a recent ebook by Conversion agency PRWD featuring seventeen well known CRO professionals.

Happiness = Reality - Expectations

What is a conversion rate?

The conversion rate is the percentage of users who take a desired action. The archetypical example of conversion rate is the percentage of website visitors who buy something on the site.

The three-letter acronym (TLA) being CRO…

No, we don’t optimise conversion rates, so CRO is a fundamentally flawed TLA. Despite the cool allusion to a black carrion bird, it cannot stand. We optimise revenue, growth, pricing, value propositions, images, navigation and more. — Brian Massey, Conversion Sciences

Type to enter textCopywriting Testing & Experimentation Search Marketing Social Media Design & Layout

Psychology, Human Behavior & Persuasion Marketing & Branding Sales Presentation Usability & User Experience Information Architecture Business & Web Analytics

Tweak a button?

Measuring your conversion rate is like taking your temperature. It cannot tell you what is wrong.

The Kellogg Foundations’s logic model of inputs to impact separates the work from the results.

• Inputs - resources that we need to make a change • Activities - what we’ll do with inputs to make a change • Outputs - the volume of work accomplished • Outcomes - the benefit or change derived from our activities • Impact - the long-term consequences from the change

CRlook!

The Kellogg Foundations’s logic model of inputs to impact separates the work from the results.

• Inputs - resources that we need to make a change • Activities - what we’ll do with inputs to make a change • Outputs - the volume of work accomplished • Outcomes - the benefit or change derived from our activities • Impact - the long-term consequences from the change

CRlook!

In a letter to shareholders in 2010, Jeff Bezos said:

Senior leaders that are new to Amazon are often surprised by how little time we spend discussing actual financial results or debating projected financial outputs. To be clear, we take these financial outputs seriously, but we believe that focusing our energy on the controllable inputs to our business is the most effective way to maximize financial outputs over time.

Getting numbers is easy; getting numbers you can trust is hard — Ronny Kohavi, Microsoft (previously at Amazon) “

Funnels Measure Outputs

Missed targets

Bounced visits

Failed to persuade

You create the system your visitor must navigate. People don't cause defects, systems do." - W. Edwards Deming

Gravity?• Register • Subscribe • Buy • Share • Review • Like • Follow • Upload • Comment

Conversion Trinity

Example A - Raw Data - CR = 2.25%Example B Step Visitors

1 10,000

2 9,500

3 8,100

4 5,700

5 3,400

6 1,700

Example A - Conversion At Step

Example A - Chance to Convert Forward

Example B Step Visitors

1 10,000

2 3,300

3 1,320

Example B - Raw Data- CR = 2.25%

Example B - Conversion At Step

Example B - Chance to Convert Forward

a) Conversion isn’t a random event with random probabilities at each stage.

b) No variable is neutral; everything matters, but not everything matters equally

Example A & B - Chance to Convert Forward

Conversion, Intent & Outcomes

Our Goal When... They Want What We Want They Want Other

We Can Help 100%? FIX IT!

We Can’t Help FIX IT! GO AWAY!

In a word: Silos — Chris Goward , Wider Funnel“

When things get complicated, we simplify by saying ‘what’s best for the customer?’ And then we take as an article of faith if we do that, it’ll work out in the long term.”

People not knowing what they’re doing is a big problem - especially when they think they DO know. Content people - not practitioners - write more and more articles about CRO to get more trafic, backlinks etc. - but they’re really clueless about it. This bullshit content makes people believe CRO is a list of tactics, a swipe file. This creates false beliefs, unrealistic expectations and a naive world view about the whole thing.

— Peep Laja , Conversion XL

"The miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others.” The bias was first experimentally observed by David Dunning and Justin Kruger of Cornell University in 1999.

More confidence, less competence!

• The average conversion rate for Top 500 merchants is 3.32%.

• The top 25% of online retailers convert at 5.31%

• The top 10% of online retailers convert at 11.45%.

• Amazon.com non-prime customers convert at 13%

—Source: 2015 study by Millward Brown Digital

Survivorship Bias & Best Practices

Logical errors of concentrating on the people, companies or things that "survived" some process and inadvertently overlooking those that did not because of their lack of visibility.

Best Practices or Survivorship Bias?

Survivorship Bias & Best Practices

Logical errors of concentrating on the people, companies or things that "survived" some process and inadvertently overlooking those that did not because of their lack of visibility.

Best Practices or Survivorship Bias?

Are we keeping up with our competitors?

There are no right answers to wrong questions. - Ursula K. Le Guin“

Are we keeping up with our customers?

What does it say? 1. They make their UVP

clear 2. They test their CTAs 3. They test their headlines 4. They tend to have short

forms 5. and another 16 tips

• Amazon prime members convert at 74%

• Investment firm Macquarie says 50% of U.S. households could be

members of Amazon Prime by 2020.

22x 3.32% vs. 74% conversion rate. What exactly is 22x better?

A lack of focus on the customer’s non-conscious mind… Today, there are many poorly optimised websites that even elementary CRO approaches can help. Once the basics are exhausted, though, more sophisticated approaches will be needed to keep improving conversion rates. — Roger Dooley, Dooley Direct

Conversion rate is a measure of your ability to persuade visitors to take action they way you want them to.

It’s a reflection of your effectiveness and customer satisfaction. For you to achieve your goals, visitors must first achieve theirs.”

“Bryan Eisenberg ClickZ 2001

Performance of companies

“Delivery gap”

Companies that believe they Provide a superior proposition

Companies whose Customers agree

Source: Bain Customer-Led Growth diagnostic questionnaire, n=362; Satmetrix Net Promoter database, n = 375

Jeff BezosCEO & President amazon.com

“The most important single thing is to focus obsessively on the customer. Our goal is to be earth’s most customer-centric company.”

1995...the story begins

~40%of all ecommerce sales go through Amazon

We have our own internal experimentation platform called “Weblab” that we use to evaluate improvements to our websites and products. In 2013, we ran 1,976 Weblabs worldwide, up from 1,092 in 2012, and 546 in 2011.

– Jeff Bezos, 2014 letter to Amazon’s shareholders

“Amazon was doing over 200 a/b tests at a given time since 2004, how many more learnings have they had than you?

The ego of the optimisers makes 90% of test results a lie… Why? Most optimisers suffer from a cognitive bias called “confirmation bias”. They work hard on analysis, hypothesis, concept and building an experiment. If you work hard for something, your mind wants to believe that it is true. — André Morys, Web Arts

Smart people are very good at rationalizing things they came to believe for non-smart reasons.

Smart people will usually be able to brush off criticism since they are convinced they are right and, due to their thinking abilities, can probably out-argue most criticism even if the criticism is right.

The purpose of business is to create and keep a customer.“

Source: Optimove Blog, April 14, 2016

“A brand is no longer what we tell the consumer it is – it is what consumers tell each other it is.”

Scott Cook Founder, Intuit & Board of Directors P&G

One of the biggest barriers to adopting a data-informed mindset, and a culture of testing & optimization, is a lack of trust, belief or empowerment coming down from the senior levels of businesses — Oli Gardner, Unbounce

I think that there is a Gartner Hype Cycle for A/B testing and that many companies end up stuck in the unproductive part, doing testing that doesn’t shift the needle or more significantly, isn’t teaching you anything for the effort — Craig Sullivan, Optimal Visit

80% of CEOs have lost trust in marketers

Source: Fournaise 2012 Global Marketing Effectiveness Program

CEOs made the conscious decision not to expect more from marketing than branding, look/feel good ads and promotions…

CEOs feel marketers “live too much in the brand, creative and social media bubble.”

— Fournaise 2012 Global Marketing Effectiveness Program, which has interviewed more than 1,200 CEOs across North America, Europe, Asia, and Australia.

77% of Marketers still think effectiveness is about awareness, 71% think it’s about engagement, and 86% (of the 71%) mistake engagement for conversion. — Fournaise 2015 Global Marketing Effectiveness Program, analyzed more than 500 Marketing strategy documents, creative briefs and effectiveness reports provided by marketers

Testing call to action buttons or titles is nice, but these tests rarely change a thing and keep companies at a low level of optimisation. In order to change this and utilise CRO to its real extent, you have to run meaningful tests, build strategies, probe customers, ask the hard questions and be bold. — Talia Wolf, Conversioner

Consumers buy your offering; internal teams buy your ideas. Which ‘customer’ converts better? — Angie Schottmuller , Interactive Artisan “

7 Clues To CRO Happiness

Don’t work for toxic clients1

Don’t work for toxic clients

Don’t create or get caught up in the hype

Set the right expectations, explain what you can’t control

Identify and prioritize the problems you can solve

Solve the problems and measure change properly

Report on what you learned and what remains unknown

Earn and build the trust of your clients (see #1)

http://www.BryanEisenberg.comhttp://www.BuyerLegends.com

Phone: (347) 469-1090 Twitter: @JeffreyGroks & @BuyerLegends jeffrey@buyerlegends.com

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