Optimizing for Visitor Conversion
Drilling Down Newsletter # 46: 6/2004

Drilling Down - Turning Customer
Data into Profits with a Spreadsheet
*************************
Customer Valuation, Retention, 
Loyalty, Defection

Get the Drilling Down Book!
http://www.booklocker.com/jimnovo

Prior Newsletters:
http://www.jimnovo.com/newsletters.htm
========================

In This Issue:
# Topics Overview
# Best Customer Retention Articles
# Question - Paid vs. Organic Search Quality?
# Question - Optimizing for Goal Conversion?
--------------------

Topics Overview

Hi again folks, Jim Novo here.

If you have been with me for a while you know I try to rotate topics to keep all the different audiences out there happy.  This month we're focusing on web metrics and conversion, and this topic is more about customer acquisition than retention.  So if you're a pure retention freak or offliner (do they exist?  I wonder...) you might want to skip this one.  But...

We do have a couple of great article links, a stunning must-read piece on B2B customer valuation for the retention freaks and another comparing search marketing to direct marketing, which I consider a "crossover" article.  So a little something for everyone...

Let's do some Drillin'!

Best Customer Retention Articles
====================

Net Worth (B2B Customer Valuation)
June 1, 2004  Direct Magazine
Absolutely fabulous piece by the very smart Ruth P. Stevens.  All you B2B'ers out there who don't think it's possible to measure and manage customer value, guess again.  Read about how the best in the biz make it happen.

11 Ways Search Engine
Marketing Is Like Direct Marketing
June 8, 2004  DM News
Those of you who know my work can just skip this article, we started on this idea in 2000 when looking at search audience quality, and I got into it more specifically here.  For those who don't think all this has basically been done before, check the article out.  The most important statement for you folks is this one: "When I give a speech to online marketers, many are intrigued that so much of what they live and breathe has been articulated in direct marketing terms for over half a century already."  'Nuff said.  Read the article, then if you want to know more about how what he is saying affects search marketing directly, read this one and this one.  Interested in the global idea of "internet = direct marketing" and what that means for you in the future?  Click here.

-------------------
If you are in SEO and the client isn't converting the additional visitors you generate, you can help them make it happen - click here.
-------------------

Questions from Fellow Drillers
=====================

Paid versus Organic Search Visitor Quality

In light of the recently released study showing more people click on Organic listings than Paid listings, I thought this question regarding tracking the conversion of Organic versus Paid clicks to be timely info.

Q:  I just read your "Online Advertising Effectiveness?  Tell Me About It!" article.  Interesting stuff.  When I looked at your first set of numbers, it occurred to me that the paid clicks might tend to convert more frequently than free referrals simply because SE's "sponsored results" are in effect filtering out the skeptical tightwads (people like me) who habitually avoid sponsored results as a way to dodge sales pitches.  Think about it: if you're searching (for example) "customer loyalty"
and both paid and unpaid referrals to the same page appear side-by-side, which are you more likely to click -- sponsored or free?

A  Depends on the search.  I click on paid listings because I figure if they can afford to pay for ads, they must be making money, if they are making money, they must be successful, if they are successful, product / service must be good.  Different filter.

Q:  If you're a prospective customer who is easily engaged, I suspect your likelihood of choosing the sponsored link is at least 50%. But if you're a paranoid miser like me and you automatically ignore sponsored links, then your likelihood of picking the paid link is 0.
Is it possible that paid referral visitors are more easily engaged simply because search users who are not that easily engaged are effectively blind to your paid links?

A:  Well, it doesn't really matter why it happens, the point of the article is, in the case of my own site,  it is happening and you can measure it.  Why is irrelevant.  At the time the article was written, everybody assumed that clicks from paid search ads had less value but nobody had measured this  - so that's what I did, and that is why the article was written.

The reality is that paid clicks are often much more valuable than organic clicks for the same search phrase because they convert at much higher rates.  I suspect much of this effect depends greatly on the skill of the advertiser.  If you write bland or confusing paid ads and don't use customized landing pages, it probably is not true.  The point with paid ads
is you can control the environment, and if you are any good at what you do, this control should result in a higher quality click.

Q:  Still, in any discussion of paid referrals, I wouldn't dismiss the value of understanding why visitors make the choices they make. Knowing the psychological factors at play and how they affect my site's productivity is just as important to me as drilling down through my traffic stats.

A:  Well yes, I don't entirely dismiss asking why, and do so myself.  Asking "why" helps to develop new test approaches and leads to better conversion.  My point was really that many people (probably not including you), particularly those in design, tend to do what they think is "right" and ignore the data.  In that sense, it doesn't matter why conversion changes, the fact that conversion either went up or down in response to a change is simply a fact, and it doesn't need to be questioned or fully understood to be important, it just "is".

Over time, what happens is you begin to understand which changes work and which don't, and you begin to better understand the "why" based on the history you have been exposed to.  Perhaps I was overly emphatic on this point, but it's only because more often than not, people waste a lot of time wondering "why" instead of changing it and getting some real direction on what works and what doesn't.

Q:  Your explanation of the relationship between your experiment's 1-page views and engagement behavior rings especially true for me.  And it underscores the importance of asking "why" in the practice of traffic analysis: if I know why visits are brief (or why visitors don't penetrate), then I know whether to make changes, and what changes to make.

A:  Yes, I think we are on the same page.  A better way to say what I meant would be "Don't out-think it, just make some changes that seem logical and get the data, because you will often be wrong about what will increase conversion.  In the end, it doesn't matter what you think, what matters is what visitors actually do.  So don't waste a lot of time arguing about changes, just try something and measure the changes."

-------------------------------
If you are a consultant, agency, or software developer with clients needing action-oriented customer intelligence or High ROI Customer
Marketing program designs, click here.
-------------------------------

And speaking of conversion....

Optimizing for Visitor Conversion 
====================

Q:  Jim, I've read The Marketers Common Sense Guide to e-Metrics and have a question: can I hire you to optimize my company's web site for higher conversion of visitors?

A:  I'm afraid I don't do "conversion work" in isolation; conversion is only one part of my whole approach to web marketing, and you have to commit to the whole program to get me interested.  But I get this question so much I'm going to tell you how to get the ball rolling and then publish this "how to" on my web site.

Here is the way I approach the first phase of a web site optimization for visitor conversion:

1.  Above all, really think about your business model, and decide what the primary thing you want people to do at your web site is.  Be very specific; if you don't have a clear conversion "goal", you absolutely cannot optimize for it.

2.  Concentrate first on the highest volume entry pages which are also the highest source of 1 Page Visits.  You can keep "score" on this by using a percentage: for each entry page, what is 1 Page Visits / Entry Visits for each Entry page?  Make changes to see if you can decrease the % of 1 Page Visits for the highest volume entry pages.  

Try changing the order of links in the main navigation, and realize that "less is more" - the more you focus visitors by providing fewer link choices, the more likely it is they will click on what you want them to.  

Pay careful attention to the wording of all links in the main navigation - are they crystal clear, do they really say what you mean?  Are they "compelling", do they "beg for a click"?

3.  In conjunction with this, look at the paths from those same high volume entry pages - where do visitors go, what do they do?  Does it look like the visitor is confused?  What can you change in your navigation to get people
to where they should be going?  How close do visitors get to accomplishing the goal?

4.  For most web sites, the newsletter is more important than people realize; many visitors
simply forget you exist after the first visit.  In fact, for many sites that think their conversion goal is to sell something, the primary goal should be newsletter subscription.  The newsletter brings them back, your list is a source of "warm leads", people most likely to buy.  You will sell more by selling to newsletter subscribers than trying to sell cold to new visitors, so the most important conversion goal is newsletter subscriptions.  Make newsletter subscription more prominent, put the "sign up" near the top of the home page.  

Make a link to the "subscribe page" part of your main navigation so it is on every page; you will have to decide which of the links up there now has to go.  Your paths from the home page can help you in deciding.  If you have a "Links" link in the main navigation, get rid of it.  It's a major barrier to conversion by causing people to leave the site.

5.  If your web site analytics support flagging "goal pages" or "Scenarios", enter the pages or paths representing your site goals, and then optimize entry pages and paths so they result in the highest percent of visits reaching these goals.  Make sure every paid campaign has a unique landing page and track all of them for goal or Scenario completion.  Adjust copy in ads and on landing pages until you are maximizing goal completion.

And that's the way I would have started with optimizing your site for visitor conversion!

Jim
-------------------------------

That's it for this month's edition of the Drilling Down newsletter.  If you like the newsletter, please forward it to a friend!  Subscription instructions are top and bottom of this page.

Any comments on the newsletter (it's too long, too short, topic suggestions, etc.) please send them right along to me, along with any other questions on customer Valuation, Retention, Loyalty, and Defection here.

'Til next time, keep Drilling Down!

- Jim Novo

Copyright 2004, The Drilling Down Project by Jim Novo.  All rights reserved.  You are free to use material from this newsletter in whole or in part as long as you include complete credits, including live web site link and e-mail link.  Please tell me where the material will appear.