9 Year Journey: 3 Lessons

Mobile V.s Desktop Traffic

I’ve spent the last 2 months reflecting on everything I’ve thought about buyer psychology as it applies to ecommerce.

There is just too much information out there. Too many shiny items to chase down.

Too little time to do things.

Fortunately, there are a few principles that immediately come to mind.

So if you simply don’t have the time to test and experiment with every new idea don’t be disheartened.

We’ll distill the 3 big ideas that will help you see 20% growth.

Strategy 1: Focus on Mobile

There is one secular trend I’ve seen over the last 5 years that applies to the 40+ completely different ecommerce sites I’ve studied. And that’s this: the percentage of overall mobile traffic is growing (whether you like or not) every quarter. And it’s going to continue rising. But mobile revenue as a percentage of overall revenue is still garbage.

Mobile Traffic:

Graph showing mobile traffic vs desktop traffic

Mobile Conversion Rates:

Graph showing mobile conversion rates vs desktop conversion rates

We used to believe mobile visitors were in research mode. They did research on their phone and then completed a purchase on their desktop/laptop. That’s not true anymore. It was true for a long time but not any more. Shoppers take a long time to change their behavior, but once the spark is lit it spreads like wild fire.

Simple trick to know if you are thinking mobile first? In the last 30 days how many times did you see the mobile version of your site versus the desktop version?

To maximize conversions you need to see what your visitors see. Walk in their shoes. It will unlock amazing growth opportunities.

Strategy 2: Focus on First Time Buyers

Stop looking at monthly revenue numbers, they hide the truth. Instead, focus on first time purchases. Here are some questions worth thinking about:

— How much time are new users spending on the site? Is it going up or down?

— How many pages are new users seeing?

— Am I getting new orders for cities we’ve never shipped to? Is there an opportunity here?

— How many chat/calls are we getting from new users? Up or down? What could it mean?

— How many product reviews are we getting from first time buyers? Up or down? What could this mean?

— What’s the #1 reason why new users are exiting without buying?

First-time buyers are a crystal ball through which you can see the future of your business. Obsess over them.

Strategy 3: Leverage Your Strengths, Exploit Competitor Weaknesses

My favorite image:

Every disadvantage has a hidden advantage. Exploit that.

Some examples:

— You are a really small etailer. Your competitor is 10x the size. Let first-time buyers know how much harder you work. Learn from Avis’ genius marketing:

— If you are the leader of the space with the largest supplier base and warehouse talk about the number of customers you’ve served all over the country.

— If you don’t have a deep product line your messaging should be focused on your specialized focus on a narrow product line.

— If you are brand new talk about your vision to challenge the old guard.

— If you are a 2 person company focus on your origin story. What motivated you to start this business? Let me know why you decided to stay small (to keep the service personal).

— If your product is a low cost leader talk about how your goal is creating a product that’s accessible by all.

— If your product is 30% more expensive than alternatives talk about your singular focus on quality and craftsmanship.

That’s it. Focus on these 3 things and your marketing calendar is set for the next 12 months.

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Conversion Rates Are a Pretty Crappy Metric

We have an unhealthy obsession with site conversion rates.

When they’re up we feel good. When they’re down we want to shoot someone.

As a former conversion addict I can tell you conversions aren’t the right only metric. Just like carat weight of an engagement ring isn’t the only measure of love.

When you focus on conversion rates you are telling yourself (and your team): people that buy are everything and those who don’t buy mean nothing.

And what you believe drives your team’s attention. When the big cheese says something (even if it’s presented as a possible idea) the team runs with it.

So, What’s the Trouble with Conversion Rates?

The single most valuable asset in the world is attention. So people navigating your site might not be paying with their credit card but they most certainly are paying with attention. And attention is $$.

When we focus on credit card digits we end up ignoring attention.

Why Focus on Attention?

Because getting credit card digits is the end result of attention. It’s impossible to succeed in the attention game and fail in the credit card game. But it’s very possible to succeed in the credit card game and fail in the attention game. And those who fail attention eventually die.

Framing the Question

Don’t ask: Why is our conversion rate 3.2%?

Ask: How come 24% of our visitors spend 4:10 minutes (which is an eternity online) but only 3.2% end up buying?

You’ll realize that the second question will take you down a completely different path.

How to Track Attention for Your Site

That’s going to vary from site to site. It can get complicated (because we’ll need to add markers at critical steps of the funnel). But one simple solution is to look at visitors who spend more than 2 minutes and view 4 or more important pages.

Thank you for investing time to read this post. If attention is something you want to explore further, just comment below and let’s talk.

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Screw Automation

96% of marketing emails are obviously templates (or is it 100%?).

I know why companies don’t send personalized messages; it’s too damn expensive.

If you think sending personalized emails is too expensive you’re asking the wrong question. The right question is:

How can we communicate with our mailing list of X thousand in a profitable way?

Just because no retailer is doing this doesn’t mean it can’t be done. Most companies are basing their marketing on what others are doing. The blind are following the blind.

I’m not saying this is easy. It’s definitely not, which is why no one is doing it.

But, if a retailer can find a creative way to have a profitable pen pal relationship with their customers it could would transform their business.

This isn’t for all types of businesses.

If you’re a business like LifeSource Water (lifesourcewater.com) where people buy just once this idea might not be for you. Though I’d argue lifesourcewater.com could still develop a strategy around my idea. But if you are a site like missouriquiltco.com this idea is a slam dunk.

How does one operationalize such a strategy?

— First, let’s identify a pen pal size. I think 2 hours a day sending 10 personalized emails is doable. I’d recommend the business owner take the lead on this experiment. Once we calculate ROI you can have a junior employee do it.

— The next step is identifying conversation topics. Here are some templates:

>> You can create a welcome email to new buyers.

>> You can recommend item Y to a customer who previously bought X.

>> You can contact a customer who last purchased a year ago. To this person, you can talk about all the things that happened with the site in the last year.

>> You can contact a customer who just posted a review.

… you get the idea. Just identify a communication strategy that fits your brand.

— Do this for a month. The goal is to send out 200 emails. Make note of replies. Are people happy to receive your emails? Are people wanting to continue with the conversation?

— Wait 6 months and compare the productivity of these 200 contacts against your larger list. Don’t look at the cost of sending out the emails at this point. The reason we’re ignoring the input cost is that over time it will go down 70%. You’ll get more efficient. At this point, we’re only interested in seeing if personalized communications drive profitable action.

Update: After writing this post I received this amazing comment from Chris:

This has made a big impact on me. This is precisely how I send emails to my mailing list. I believe the results speak for themselves. My average open rate is right at 50% (quite a bit better than the 10-11% industry average.) The click rate varies depending on the subject and just how much emphasis I put on it but I have seen click rates of over 40%. And if I send a strong recommendation for something to the list I’d BETTER put a bunch of it in stock because they are going to buy.

In the body of my emails I ask questions of my readers and encourage them to reply. When they do reply they will get a personal reply from me. I certainly don’t spend quite as much time as your suggestion implies but the time I do spend is richly rewarded.

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Designing for Distracted Shoppers

Are you easily distracted? No? Go check your browser history over the last 2 hours.

I thought I was super disciplined, methodical, and task oriented. Turns out, my browsing history betrays this self-image.

Checked your browser history over the last 2 hours?

Are you a little shocked??

If this is how distracted we are (and it’s scary to see) why would our site visitors be any different? Truth is, they aren’t.

Here is the bigger problem: This chronic issue of depleted attention has been on the rise for the last 10 years. What did irresponsible marketers do when they learned visitors who normally spend 5 minutes were now spending 3? They started cramming more on the page. The strategy was simple: cram down 5 minutes of content in 3 minutes.

This is stupid and there is a better way. Persuade the shopper to spend 5 minutes. Give them a good reason to spend 5 minutes. Minimize distractions so their 5-minute session is high quality.

Assignment for today. Identify an important page where visitors don’t spend enough time and answer this question, “How can we improve the quality time on this page by 20%?”

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Jobs to Be Done (JTBD) + CRO

I’ll never forget the first time I understood the connection between site visitor data and conversion optimization (CRO). That was 11 years ago.

On November 15th, 2018 life took another turn. I attended a 2-day workshop by Bob Moesta for Jobs to Be Done (JTBD).

Jobs thinking isn’t exactly new. I read Clayton Christensen’s book The Innovator’s Dilemma in 2005. The book describes the famous McDonald’s milkshake insight. Watch this video:

It’s also not the first time I’ve heard Bob Moesta speak. I often share Bob’s condo story where he increased condo prices, added free storage + moving service, and ended up driving by condo sales 17%. Bob achieved this outcome by understanding the job condo buyers were trying to do. But it is the first time I fully acknowledged that conversion optimization without Jobs thinking is mostly meaningless.

I’m starting a new journey to fully understand Jobs-to-Be-Done from every angle. I’ll be reading a lot. I’ll be writing a lot. I’ll be thinking a lot.

What prompted me to look beyond A/B testing?

Trouble. Clients paid us to identify and fix site friction. A/B testing is a great program to make an existing page as good as it can be. We unearthed amazing counter-intuitive lessons about buyer psychology. Insights that gave clients an edge over the competition. But when I consider our impact beyond A/B testing I’m left disappointed. We haven’t been able to transform clients’ businesses inside out.

Hey, A/B testing isn’t bad. It’s an inexpensive way to start making scientific changes. It’s 100x better than not testing. But it can exclude the end customer from the process. Jobs thinking moves the spotlight to the actual buyer. In fact, Jobs to Be Done (JTBD) thinking doesn’t care about the product the business is trying to sell, it also doesn’t give a damn about the A/B tester (me). It only cares about the end buyer.

I still love A/B testing. I’ll still continue doing it. But I’m going to add JTBD thinking to our process.

I suspect everything is going to change, just like it did in 2007. If you’re interested in following our journey post a comment below and come along for the ride.

Have a great week.

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My Problem with Amazon

Everyone is saying Amazon will gobble up independent retailers. But Amazon isn’t perfect. There are too many vendors listing the same product on its platform, which creates a poor buyer experience.

Here is my story:

Here is the Amazon listing page: https://www.amazon.com/s/ref=nb_sb_ss_i_4_11?url=search-alias%3Daps&field-keywords=fever+tree+naturally+light+tonic+water&sprefix=fever+tree+%2Caps%2C198&crid=1EXDTAORECG8S

 

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Difference between System 1 and System 2?

Video explanation:

Written explanation for the video above:

If you want to improve your conversion rates, you’re going to have to understand the mind of the shopper. And if you want to understand the mind of a shopper, you need to understand how the shopper’s brain works. And in order to understand the shopper’s brain, I can think of one simple model that really simplifies our understanding. That is to imagine the brain as a two-part system: System 1 and System 2.

System 1 is impulsive and fast. System 2 is slow and methodical. Really, when you think about it from the perspective of a shopper, they’re always trying to activate System 2, because System 2 is what helps you see the world for how it is. System 1 is the way you see the world from the perspective of what your aspirations are.

I’ve thought a lot about a simpler way of explaining System 1 and System 2. Recently, while walking, had a breakthrough of sorts.

Think of System 1 as your finance department, and think of System 2 as your accounting department. So, System 2 looks at the world as black and white, just like an accountant does. Finance, on the other hand, is all about the future implication of an investment today. That’s exactly what System 1 is always focused on.

Again, this is not a perfect analogy because really System 1 does not look into the future, but I think the way System 1 makes decisions is more akin to a finance person, versus an accountant. So, let’s understand what is the difference between finance and accounting. If you would open a new retail store, let’s say that you knew that Santa Monica is a growing market and you want to open a retail store.

You’re going to have to spend a lot of money to open a retail store, you’re going to have to spend a lot of money to get licenses, you’re going to have to spend a lot of money to train people, and it’s going to take at least a year before the store is getting the right kind of foot traffic, you know, you’ve worked out all the kinks, you’ve trained your staff, all of that good stuff.

Now, from an accounting perspective that is a black hole. An accountant would simply look at your finances and say, “Look, you have spent one year on this location in Santa Monica, this is the rent, this is how much we’re paying for training,” and they’re looking at it purely from a cost perspective, and you will get one version.

However, the finance department will look at it differently. They will look at the growth of the demographics in the Santa Monica area, they will look at the trend lines for foot traffic, they will look at trend lines for returns, they will look at the impact of word-of-mouth, they look at all of these other metrics that give you an idea about the future, and likely draw a totally different conclusion.

So, that’s how you should think about System 1 and System 2. These are two different parts of the brain. Hopefully, this analogy has given a better insight into how System 1 makes decisions versus how System 2 makes decisions. If you have any questions, comment below and I’ll be happy to answer them.

 

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Ethical Line of Persuasion

If you don’t like watching videos here is the written version of the article. The things I do for my readers 🙂

Marketing has become incredibly powerful. Whenever you go to a website (whether it’s CNN or Walmart.com), often times anonymous aspects of our data are sold in the marketplace. The goal of this is to not release personal information but to instead stitch together certain aspects to determine purchase intent. We can use this information to market products effectively.

However, there is an ethical line that no marketer should ever cross because once you cross that line the whole point of marketing is lost. Let’s talk about it.

So what is the ethical line? The truth is we aren’t even fully sure what it is. There are certainly black and white aspects of what is wrong and what’s right, but there is also a gray area that makes it ever so challenging to determine the morality (i.e. can you blame Budweiser for an idiot who drank 20 beers and then drove extremely fast on the highway?).

I’d like to share a more black and white example that happened to me while on CNN.com. I saw an Outbrain ad and decided to click on it. The ad brought you to a website called SmartConsumerToday where they were marketing a CPAP machine.

Image 1.png

After reading the article I wasn’t particularly impressed with it (as a marketer I am always thinking skeptically). However, what did impress me is that they had 347 comments and that seemed like a strong social proof element:

Image 2.png

When looking at this comment interface you can immediately see the similarities to Facebook. Scrolling through the comment you can see that people were replying to comments, there was a top commenter, and even a follow button for each person. This is where the curiosity began:

Image 3.png

The “347 comments” (seen in the first image of this article) is not actually a clickable element, meaning you can’t sort the reviews. Even worse than that, the comment box was literally just a screenshot, so you couldn’t even leave a comment if you wanted to! The buttons at the bottom of each comment (reply, like, follow post) aren’t interactive and the timestamps for each comment aren’t correct (I viewed this article in the morning and it’s now the afternoon, much more than 13 minutes ago).

Seeing this fake customer comment interface left me absolutely flabbergasted. This is a clear example of crossing the ethical line. Remember to be mindful of all the tools we have as marketers and make sure we are using them ethically.

Treat others how you want to be treated.

 

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Competing with Self

I’m reading a book about Andrew Carnegie. Mr. Carnegie used a clever strategy to maximize productivity at his steel plants. He would pit plant against plant. You might be wondering, “How is what happened at a steel plant relevant here?

I’m mentioning this because I believe you can use a similar strategy for your site. Let me explain …

MDHearingAid.com is a major retailer of hearing aids. Their 2 top-selling products are:

MDHearingAid PRO

MDHearingAid AIR

Both sell in high volume.

To boost sales further I’d break my marketing team into 2 groups and assign each one of those 2 best sellers. I would then have them compete. The goal is to see which team is able to drive more first-time buyers. Here are the ways in which the teams will be able to compete:

1: Each team can rewrite their product description as long as the look/tone of the page remains consistent with the rest of the site.

2: Each team will get their own online ad budget so they can drive traffic to their own page (Facebook, banner, affiliate, influencer, AdWords, AdSense, it doesn’t matter.)

3: Each team will be able to create new video content for marketing purposes.

4: The teams will be allowed to update the product images and thumbnails on their product page:

MDHearingAid_Product_Image.png

5: Teams can email past purchasers for ideas to improve the product descriptions and generate new reviews, video testimonials, or word-of-mouth marketing.

6: Teams will be allowed to configure special marketing campaigns on their product page. For example, the PRO team might want to add custom code on their page so that after 2 minutes on the site page visitors get a prompt that says, “sign up for a secret to buying the perfect hearing aid”. On the backend of the signup, we will have an automated email series. See the image below for a mockup of this idea:

Competing_With_Self_Mockup.png

7: Teams would even be allowed to offer special discounts/incentives on their product pages, as long as the discount doesn’t negatively impact net profits for that item.

8: Teams can decide if they want to focus on the mobile or desktop version of the page. For most sites, the mobile product page has way more upside potential so the team might decide to focus their entire effort on the mobile experience on the page.

9: Teams can even take over “chat” for their designated pages. When customers click chat they’ll be talking directly to the team.  In fact, you could even apply that to the incoming calls associated with each product page.

The bottom line is we’re treating MDHearingAid PRO and MDHearingAid AIR as their own independent units with profit and loss responsibilities.

This is just a small listing of the ways in which these teams can compete. I’m sure you’ll be able to add to this list for your unique site.

The next part is measuring success:

A: We would run the challenge over a 60 day period.

B: The winning team would get an $8,200 prize.

C: Success will be measured by new sales.

Why this would work: Humans love competition. This will shake things up. Marketing teams would enjoy having more voice over their work. It would help build team learnings. It would build teamwork (no more fighting between the AdWords team and customer service). It’s no longer the boss saying, “we can’t do that.” Now the team can see first hand why some ideas work and others fail.

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