Friday, November 30, 2012

You don't need a flashy website

For most companies the answer to all their digital woes is a new website.  Web design has never been so elaborate or abundant, but the truth is that you don't need a fancy website to drive conversions.  If your website isn't delivering the results you want, it probably isn't the underlying functionality or background color that's holding you back.

Don't get me wrong, many websites out there need a radical makeover, but the most important things are purpose and flow.  Go through your website page by page and write down the following things.

  1. Page URL - You'll need to be able to find the same page later.
  2. Page Title - This is what shows up in your browser's tab.
  3. Page Purpose - What is your goal with this page.  Are you trying to explain something, sell something, brag?  Regardless of the purpose, you need 1 clear purpose per page.
  4. Effectiveness - Does the page serve its purpose?  Try to use analytics data or customer feedback to validate your rating.
  5. What next? - No matter what page you're on, there has to be a next step.  You don't want someone to sign up for your newsletter and then leave your site.  You want them to read more posts from your blog, connect with you on twitter and linkedin, and keep browsing.  When you stop the conversation, your visitors have no choice but to leave.
You don't need a new fandagled website with tons of features.  You just need a little different copy, a little cleaner layout, and clear next steps.

Thursday, November 29, 2012

Websites are a sales crutch

One sales person recently told me that he viewed websites, meant to qualify traffic and generate leads, as a sales crutch.  Used in a derogatory manner, he was trying to say that letting a website do this work is not as effective and handicaps the sales people.  I was shocked that he felt this way and my own emotions prevented me from having a solid response.

I have a couple of heroes in the world of sales, namely Zig Ziglar and Ron Popeil.  As you may have heard, Mr. Ziglar passed away yesterday.  His passing has inspired me to look back through some of his material and reminded me of why we sell.

As a website conversion rate optimization consultant, my job is basically digital sales (why I group myself in with sales people.)  Great sales people aren't great because they can sell anything to anyone.  Great sales people are great because they know how to find a customer's weaknesses and strengthen them with the right solution.

If you're optimizing your website so that people don't read the fine print and end up buying something they don't want, you're on the wrong side.

Optimizing your website to help your customers understand their needs and find the right solution isn't a crutch for your sales people, its a service to your customers.

Wednesday, November 28, 2012

Blogging - If you build it, they will come.

Unfortunately, this isn't Field of Dreams and you're not Kevin Costner.  Blogs are a lot of work, and they aren't for everyone.  Every SEO and inbound marketing guru seems to be pushing this notion that "content is king."  You're not cool unless you have a blog to bring traffic to your website.

Assuming you still want to blog for you business, here are some pointers.

  1. Blog about your industry.  A blog about funny cats may get visitors, but I don't imagine very many of those visitors are interested in car parts.  Your blog has to be relevant to your business.
  2. Appeal to the correct side.  A blog about your industry and business can either attract customers or competition.  The ideal blog answers your customers' questions, not your colleagues'.
  3. Build a distribution network.  Too often, companies start a blog and become disenchanted because nobody reads it.  At the end of 2011, there were over 180 MILLION blogs!  Start with a list of personal contacts, then reach out to other successful bloggers.  You can use Twitter, FB, email, etc. to promote a blog, but having a network of people who will promote them for you, is the real key.  (Like the church calling tree.)
  4. Don't hope for conversions.  When a visitor comes to your site to read a blog, they are interested in information.  It's a pretty big leap from reader to customer.  Before publishing each post, think about the steps from the blog topic to a conversion and offer a clear next step.  You can't just hope for conversions, you have to lead the convers(at)ion.
There is plenty of other good advice; be creative, be original, be entertaining, be consistent, etc. etc.  My main point is: a blog isn't a sure-fire way to be found and attract customers.  Blog because you have something to say, not because everyone else is doing it.

Tuesday, November 27, 2012

Because I said so...

Why should I buy from you?  Why are you special?  Why do you need to know?

After you've answered the basics: who, what, when, and where, you need to answer why.  No one is persuaded by, "Because I said so."  

The proof of the pudding is in the eating.  Don't beat your visitors over the head with page after page of useless content or over-ripe sales speak.  Give 'em a taste.  Show them what they're missing, then see what questions they have.

Monday, November 26, 2012

If it ain't broke, test it!

Humans have always had a tendency to over "fix" things.  The saying goes, "If it ain't broke, don't fix it."  The problem with this is that if we never fixed "working" things, innovation wouldn't exist.  If we never fixed the telephone, we would still be using party lines.  We if never fixed the computer, we wouldn't have laptops.

Innovation is paramount to success, but sometimes it can be hard.  Hard because people are generally adverse to change.  When you make something new or enhance something old, you have to be cognitive of the fact that your "advances" threaten the current life of your customers.  In order to embrace your changes, they have to let go of what they know.

So, how do you get adoption of a new feature?

Let's first look at an example of how not to do it.  Facebook is constantly rolling out vast changes to its core functionality.  Games, updates to feeds, privacy settings, timeline, facial recognition, etc.  All of these changes came out as a vast update, at least to the general public.  There was no way to opt-out or go back.  If you're on Facebook, you're along for the ride.

When you release a change in this manner, it forces your customers to adapt or leave.  I worked for a publishing company of over 50 staffers and 200+ writers that used Basecamp for all their project management needs when 37signals, the owners of Basecamp, decided to release a major overhaul of the product.  It caused our entire organization to all but stop for a few days while we tried to learn the new system.  We didn't leave Basecamp, but they received plenty of nasty grams from our directors. 

Google, however, has made some very successful changes to their products.  Just the other day I was in my email when it asked me if I would like to try the new inbox message writer.  I decided to test it out.  I didn't like it and so I went back to the classic way of writing emails.  Note: Google asked if I would like to test out the new feature and let me go back to the previous version.  This method lets Google get valuable feedback on how many people are willing to try something new (an indicator that the old way can be improved), and how many people went back to the old way (an indicator of how well their change will be received).  

If you were to redesign Craigslist, a very successful online classified ads website that often gets dinged for its overly simple design, you could use this same method.  Many people believe that if Craigslist ever changed their design, they would lose many of their customers who value the overly simple layout and design.  You could easily make vast changes to the website via CSS and let visitors opt-in to using the new design and back out if they don't like it.  

If you have a strong customer base and are thinking about making a big change, consider testing your changes with an opt-in style test.  You could save yourself a lot of nasty phone calls and blog posts :)

Friday, November 23, 2012

Greedy algorithms for holiday split testing

If you're looking to test different offers or site elements this holiday season, consider using an epsilon greedy algorithm instead of a simple A/B split test.

A/B split tests direct 50% of your traffic to A and the other 50% to B.  This is the quickest way to achieve statistical significance.  But if one variation, A or B, is significantly better than the other, you sacrifice valuable conversions because a split test will continue to send traffic to the poor performing option.

An epsilon greedy algorithm, used to solve the multi-armed bandit problem, maximizes your average conversion rate during the test.  It keeps track of the current conversion rate of both of your options and sends the majority of your traffic to the one with the best conversion rate.  A small percentage of your traffic is used to continuously test the lower performing options.  You don't reach statistical significance as soon, but your average conversion rate during the test is higher.

If you're planning on continuously testing your site this holiday season, don't just get answers, maximize your conversion rate at the same time with an epsilon greedy algorithm.

Visual Website Optimizer's explanation of split testing vs MAB algorithms.

A simple greedy algorithm.

Thursday, November 22, 2012

Use product titles to build anticipation

Happy Thanksgiving!

Today's menu is:
Oven Roasted Turkey Breast with Homemade Brown Gravy, Honey Glazed Ham, Sweet Potato Souffle, Garlic Cheddar Mashed Potatoes, French Cut Green Beans with Onion and Bacon, and Homemade Sweet Dinner Rolls.
Doesn't it just make your mouth water.  Much better than saying, turkey, gravy, ham, sweet potatoes, mashed potatoes, green beans, and dinner rolls.

Do your product titles build anticipation?

Wednesday, November 21, 2012

Rewards vs Incentives

The semantics of using rewards or incentives in the work place has gotten out of control.  The truth is that in this context, these words mean the same thing and are used for the same purpose; to get a better work product from your employees, be it measured in time, quality, effort, etc.  This idea extends to customer retention with loyalty programs and customer gifts.

The debates regarding these two terms aren't about which term to use, but how to achieve your goal.  In general, there are two ways to go about rewards/incentives for your employees and customers.  
  • Up front expectations: if you do X, you will get Y.  
  • Surprise gifts: you don't know if you'll get anything, but I'm known for giving "rewards."

The first option, taps into our competitive nature.  (This is how most loyalty programs work.)  We work diligently to rack up points and miles and achieve the highest status.  The problem is when something goes wrong; points don't get added correctly, the rules change, or it is too difficult to redeem your reward/incentive.  This causes employees and customers to get angry and loose faith in the company that made the system.  It was suppose to be a reward for performance, but because it brought out our competitive nature, it has become the spoils of winning.  No spoils, no win.

The second one, surprise gifts, is more like gambling.  It relies on our imagination and over estimation of unlikely events.  Zappos uses this technique, because they know those people who receive the gift of free express shipping are more likely to become ecstatic at receiving a gift.  Ecstatic customers are more likely to come back and tell their friends.  It becomes a game of getting the next gift.  This sort of program can be hard to keep secret.  If the "rules" to the program get out, it can quickly turn into a competition with expectations.

The best rewards are spontaneous (at least to the receiver), they are not monetarily based, and a clear correlation is shown. 

Even though you may have been working on the algorithm for months, the appearance of spontaneity makes the customer feel special and valued.  

Monetary gifts, cash or gift cards, are worth their exact value.  A thoughtful gift comes with the added value of appreciation, enjoyment, and lasting memories.

Regardless of the gift, a clear correlation helps the receiver understand why the gift was given.  This naturally increases that behavior.

Examples:
  • You have worked so hard to make this a record year for the company.  I'm giving you and your family an all expenses paid vacation.
  • Thank you for ordering from us and being so patient on the phone.  I'm giving you a free upgrade to priority shipping.

Rewards and incentives seem like a great idea, but if not done correctly, they can do more harm than good.

Tuesday, November 20, 2012

Give 'em a sneak preview

If your company is doing something for Black Friday or Cyber Monday, don't wait to tell people.  There is so much going on that it will be hard to capture anyone's attention this weekend.

The die-hards are already mapping our their route and putting together a play by play.  The agoraphobics have already stocked up on a weeks worth of food, so they don't have to be subjected to the mayhem.  You won't be able to change someone's plan with a sandwich board and a guy on the corner dressed as a hot-dog.

If you're planning something big for this holiday shopping bonanza, now is the time to let everyone know.  Put up a poster, send out a mass email, and give everyone a sneak preview.  You don't want to miss your chance to be a part of their plans.

Note: This tactic works for other times of year too.  If you're hoping to capture unused budgets before the end of the year, or to be a part of next years budget, don't wait until January to tell everyone.

Monday, November 19, 2012

Pricing tears

Most businesses that use pricing tiers miss the point, which makes me sad.  They end up using prices that are all roughly the same.  When you have similar prices, it actually makes the purchasing decision harder.  Prices are generally a symbol of value and as such, when you have different feature sets at nearly the same price, it says the extra features aren't worth much.

It takes nearly 4 times as much money to purchase twice as much enjoyment.  To test this, lets imagine I just gave you $5.  Think about all the things you can do with a free $5.  I think about food.  $5 will get me a cheap meal at a fast food restaurant.

If I were to double that and give you $10, the value of what you can get doesn't change much.  You can still really only afford a meal at a fast food restaurant, but maybe now can get a full sized meal with a drink and fries.

If I double the offer again to $20, you can afford a meal at a decent restaurant.  This change for me, the chance to eat at a decent restaurant vs a fast food restaurant, would likely double my enjoyment of the meal.

If your product tiers stand to double the experience, you should have 3-4 degrees of separation between the prices.  This serves to elevate the value of the options even more.  If you only raise the price a little, because the extra features don't really increase your costs, it serves not only to cheapen the higher option, but also the lower options.

The Ford Shelby Mustang GT500 is almost 3x the price of the basic Ford Mustang.  The basic Mustang is just a sports car, but the Shelby is a super car.  Having the option of a super car that looks just like the sports car makes both the sports car and the super car more desirable.

Pricing tiers aren't meant to allow more people into the market at exactly the price they desire, they are a tool to increase value and desirability of your offering.  If your goal is to let your customers choose the price, consider รก la carte.

Friday, November 16, 2012

CRO best practices aren't

Following best practices is not a best practice.  At best, best practices are just what worked well for a number of other people, but best practices are just a shortcut.  Like any shortcut, if you follow best practices, you may not end up where you want to be.

Look at it a different way.  If you want to know how Seth Godin thinks, don't read his books and blog, read what he reads.  Reading what Seth writes will only teach you what he thinks, not how he thinks.  If you read what Seth reads, you can learn the thought process that lead to his popular books and blog.  

If you want your website to be successful, don't copy other successful websites.  Find out how they found the path to success.  Then, you can find your own path to success.

Website conversion optimization is about finding a path to success for your website, not implementing best practices.

Thursday, November 15, 2012

Never miss an opportunity to talk to your customers

When things go better than expected, it's easy to talk to the customer and revel in your success.  But, when things go bad, we all have a natural tendency to shy away from contact, hoping the customer won't notice, and that we can fix it.  

Sometimes this works, and a hard conversation is avoided.  More often than not, this just makes the problem worse.

When the customer realizes there's an issue, they feel late to the party, they lose trust in your ability to handle things correctly, and they are left with a bitter taste in their mouth.

Chances are they noticed before you thought they would, and they complained to a colleague, friend, or spouse.  Would you rather your customers yell at you or about you?

Whether things are good, bad, or just okay, never miss an opportunity to talk to your customers, deliver the news, and include them in your process.  The outcome may surprise you.

Wednesday, November 14, 2012

How to earn the trust of a stranger

Engaging a visitor to purchase a product on your website is like earning the trust of a stranger in the mall.  

Trust comes from many different places.  What you're wearing, the way you walk, the way to you talk and even the look in your eyes can serve to add or reduce trust in the exchange.  To begin a conversation, you generally only need a warm smile and a simple greeting.  If you want to make it past the common courtesy of a friendly greeting, you will need to bond.  

The best way to bond with someone is to share a common interest or view.  You can use visual cues from their wardrobe or belongings to find something that resonates with you and strike up a conversation about your shared interest.  Once you have earned the appropriate level of trust, you can ask your question or give your pitch.  

There are different levels of trust, necessary to achieve different results.  The general rule is that the higher the stakes, the more trust is necessary.  To ask someone for directions, a simple greeting will probably build up more than enough trust.  To ask someone for their birthday may require a little more. It is also important to realize that there is no common exchange rate for trust.  Different people require different amounts of trust for the same action.

Your website should have a friendly greeting and be able to strike up a conversation about a common interest with your visitors.  There is no harm in too much trust.  Someone who trusts you with their life, will easily trust you with their email.

Can your website earn the trust of a stranger?

Tuesday, November 13, 2012

Trust is everything

Trust is everywhere.  It may even be more ubiquitous than hydrogen.  Trust boils down to expectations, and these expectations are what run the world and maintain the status quo.  You trust your doctor to give you good advice, the grocery store to stock the groceries you want, McDonald's to have happy meals, the government to make decisions in the best interest of the people, terrorists to die for their cause, and that you'll wake up tomorrow.  

If you lose trust in any of these, it changes everything; where you shop, where you eat, who you give your taxes to, and even your personal sense of security.  Pandora's box is said to contain hope.  If it were lost, the world would lose hope and be in disarray.  But hope is just a function of trust.  You trust that you have the power to change your circumstances and that someone out there has your back.

Your website visitors trust you, but maybe not in the right way.  They trust you to provide a mediocre product, not to care about them, and to screw them over.  Whatever they trust you for, you've earned it.  While trust is not easy to earn, it is to lose.  Surprise your customers with excellent service and honestly care about their satisfaction.  You may even earn a different kind of trust.

Monday, November 12, 2012

CRO improves lead generation on the web

Website conversion rate optimization isn't just for e-commerce sites with millions of visitors.  CRO can improve your online lead generation, no matter what size your business is.  

Lots of small businesses have two problems with their online lead generation.  One, they don't get very many leads, and two, the ones they do get are soft leads.

Most companies view these problems as a numbers game.  If my website has a 10% conversion rate for leads, and I close about 10% of those leads, then I need 100 visitors for my website to get 1 new customer. While this logic is sound, it doesn't address the problems.  Why are you only closing the deal with 10% of your leads?

I find that most websites do a poor job of qualifying and prepping leads.  It's easy to fall into the trap of thinking that if you can just get someone's number or email, you can sell them anything.  You don't want to scare them off with a high price or slow manufacturing time, so you wait until you talk to them to break the news.  

Your website can sell your products and services better than any sales person.  Not because your website is better at convincing people to buy, but because it can talk to thousands of people at the same time, and let them do the leg work of qualifying themselves for your offering.  If your website weeds out the un-committed visitors, prepares your leads with the downside, and excites them about getting started, all you have to do is take orders.  Website conversion optimization isn't just about increasing your conversion rate, it's about increasing the quality of those conversions too.  A 3% conversion rate with a 100% closing rate, would triple the size of the business in the math above.

Could your online leads be better?

Friday, November 9, 2012

Persuasive marketing with reciprocity

The principle of Reciprocity is that when you give something to someone, they not only give you something in return, they want to.

I've noticed a trend on the web where more and more companies are requiring that you give them your email in order to read their case studies or blog posts about a particular topic.  Other companies are charging a "tweet" for the article, sight unseen, as payment.

This is not a great use of reciprocity.  When websites require the exchange upfront, the reciprocation is on their part.  For your email or tweet, they will share their knowledge with you.

If you have a website, consider the consequences.  This doesn't promote loyal followers that will spread your message.  This creates individuals who feel that you owe them for their payment.  The job of exciting them and exceeding their expectations has just gotten exponentially harder.

If you give useful information to your visitors, they will feel a sort of debt to you.  The more useful the information, the more likely they are to return and feel the need to reciprocate.  If you want a tweet or their email address, all you have to do is ask.  The beauty of reciprocity is that you can build up credit and ask for something big when it counts.

Thursday, November 8, 2012

7 Myths about split tests

Split tests or A/B tests are the best way to determine the impact of your changes.  They are fairly simple to perform and more people could benefit from doing them more regularly, but there are a few myths that I believe are holding people back.

  1. You will get results - Not all tests are created equal.  Actually, most tests don't have a significant impact on the business (maybe why more people don't test.)  If you do your homework and get insights into what affects your visitors, you have a better chance of crafting a significant test.
  2. Test everything - "Everything" doesn't matter to your visitors.  I don't buy a product online just because the "Buy Now" button is red.  On the other hand, if I can't find the buy now button, there is a good chance I will go somewhere else.
  3. Statistical significance is all that matters - Statistical significance is only important in the world of statistics.  Statistical significance is a good indicator that your test is valid, but make sure that your results are good for the company as well.
  4. Your results will hold - Not all results stand the test of time.  This happens for a number of different reasons, but suffice it to say, the world, your visitors, and the web is constantly changing.  Just because people are worried about security today, doesn't mean they will be tomorrow.
  5. Never show your test to returning visitors - If you have long time visitors to your website, on one hand, you don't want to shock them with a crazy test, but if your test is valid, a little improvement may be all they need to convert.
  6. Multivariate testing (MVT) is the holy grail - MVT rarely works.  If you want to find out which one of 3 ads works best in which one of 2 spots in combination with one of 3 headlines, you are looking at 18 different combinations.  If a simple A/B test takes 2 weeks to get enough visitors to be relevant, you could be looking at 18-36 weeks before you get a positive result from your MVT.  If you decided to test all 18 combinations with A/B tests, you could realize incremental results every 2 weeks.
  7. You should always be testing - Not all websites get enough traffic to do split testing efficiently.  For those that do get tons of traffic, if you have a high number of returning visitors, too much change can make the site feel unstable.  Every situation is different, but you don't want to loose confidence from your returning visitors by constantly changing the core of your website.
If you're thinking about doing a split test or are already doing them, hopefully this list will help you avoid some of the pitfalls.  If you have found other myths or unexpected results in your split tests, please share in the comments.

Wednesday, November 7, 2012

Marketing like a specialist

A lot of really smart people will tell you that if you want your business to succeed, you need to specialize.  A specialist doesn't have to worry about all the fringes or how their work fits into the whole picture.  They only have one focus, and as such can spend more time researching, testing, and becoming an expert in that focus.  But that's not why they suggest you be a specialist.  The main reason for specializing is because it is easier to attract business.

Why?  Why is it easier to attract new business when you are a specialist in a very particular field? 

If you're looking to order the perfect Christmas tree, in Phoenix, this holiday season, consider these two options.
It feels safer to go with the company that specializes in Christmas trees, and when you visit their website, linked above, you know you have arrived at a place for Christmas trees.  Moon Valley Nurseries is more than capable of providing an excellent tree, but the landing page doesn't feel "Christmasy."  It doesn't let you know that you have arrived at the place for Christmas trees.

You don't have to specialize, but you do have to let your visitors know they have arrived.  They don't need to look any further, because you are the expert they have been looking for.

If your business sells multiple products or services, consider making separate landing pages that let your visitors know they came to the right place.

Need help with your landing pages?  Hit me up at jsmith@contourthis.com to see how we can help.

Tuesday, November 6, 2012

Price anchoring with comparisons

Price anchoring is a very effective technique in which you ask your visitors to consider 2 or more price points for the same or similar product.  The decoy price affects your visitor's opinion of the real price.  One of the most common ways of price anchoring is when you show two very similar products that have very different prices.  

This comparative technique can be used in two different ways; to increase the perception of quality in the higher priced item, or to increase the economy of the lower priced item.  It is important to be conscious of who your visitors are and what their goals are.

High end designers, like Coach, often have a couple of really expensive handbags ($1,000 and up) to make the $300 and $400 handbags look affordable.  Coach even uses this same technique on their website where I counted 27 handbags over $1,000 sprinkled in a sea of almost 700 items.  Designers succeed at this because their customers want to be associated with the brand but can't always afford the most expensive items.  These expensive items also serve to elevate the value of the brand.

High end car companies, like BMW, love comparing themselves to their, often lower priced, competitors because it elevates their perceived quality.  Their ads encourage the thought that for just a little more money, you can get a better, faster, stronger product.  Car companies succeed at this because their customers want the best their money can buy.

Many companies actually do both.  They lure you in, telling you their product is the best money can buy and then get you to look at an extremely high priced version of their product so that your decision seems much more practical.

It's important not to confuse these two price comparisons.   You want to be the quality choice when compared to your competitors, but once they have chosen you, you want to help your visitors make the practical choice for your product offerings.  

Monday, November 5, 2012

Practical association

Association is when you naturally think of two or more things as belonging to a group or sequence.  The letter "A" is associated with the alphabet and alligators.  Ketchup is often associated with french fries, but is also a condiment and thus associated with other condiments such as mustard, relish, and even bar-b-que sauce.

It is important to be aware of what people associate your products with.  You can force association through sales copy that brings up useful associations or by using comparisons.  The Mac vs PC campaign did a good job of associating personalities with computers.

Verizon uses a cute girl on a motorcycle to associate itself with speed.  McDonald's has long associated itself with happy children.

You can use association to increase perceived value, quality, interest, and even enjoyment.  What are you associated with?

Saturday, November 3, 2012

The significance of significant

What does it mean to have statistically significant results?  Are insignificant results irrelevant?

To answer these questions, we have to look at what it means to have statistically significant results.  If you have two sets of results, A and B.  
A: 1624 visitors; 72 conversions; 4.43% conversion rate.  
B: 1609 visitors; 96 conversions; 5.97% conversion rate.

B clearly has a higher conversion rate.  Statistical significance helps tell you how likely it is that B will ALWAYS have the higher conversion rate.  

Statistical significance makes an estimate of what the best possible conversion rate will look like and the worst possible conversion rate.  If the worst day for B is still better than the average day for A, then you have a statistically significant result.  However, if the worst day for B is lower than the average day for A, than it is probable, A will actually have a better conversion rate than B on any given day.



In the example above, B's worst day is still better than A's average day, so the results are significant.  In this case we have a 98% confidence level.

But what if the confidence level is low?

Statistical significance is only one tool to help you determine whether a change is good or not.  It is important that you also look at volume, time, revenue, and trends.

If the difference in the volume of conversions is significant to your business, then the results are significant.  In our example above, the difference is 24 conversions.  If 24 conversions, during the time frame of the test, is big for the company, then the results of the changes should not be ignored.

Time is another important factor.  Too little time means you don't have enough natural variation and randomness to demonstrate confidence in your numbers.  If you reach statistical significance in 1 hour, its hard to imagine it will hold at the end of the day.  Results like this often mean you should segment your traffic vs make broad, sweeping changes.  

Revenue can also be a game changer.  If A above generated more revenue because it increased cart size, the conversion rate suddenly becomes less important.  I would suggest testing a hybrid of A and B to both increase conversions and cart size.  

The last thing you want to pay attention to are the trends.  If B is consistently above A on a daily basis, then you have nothing to worry about.  However, if B has a high variability, meaning some days it is very low and some days it is very high, you may want to reconsider.  It can be hard on a company to have an ebb and flow of orders.

Statistical significance is just one part of the story.  It is important to take an overall view of your changes to make sure you are making the right choice.

Friday, November 2, 2012

The power of 9

A lot of studies have been done on the power of using 9's in pricing and the effect it has on our willingness to purchase a product.  All of these studies show that when you put a 9 in a price, people are more likely to purchase the product than when no 9's are used.

You've probably heard about and seen the use of 9 in pricing.  Almost everything you buy has a 9 in the price.  The power of 9 is intriguing, but none of these studies explain why 9's work.  The reason 9's work is a combination of association and anchoring.  

Association
Association is when 2 or more things naturally go together or are part of a sequence.  When you think of one, the other naturally comes to mind.  Think: "ketchup & mustard", "chicken & waffles", "A,B,C", "8,9,10".  When you use a 9 in a price, regardless of location, the following round number is closely associated with the number:  39 & 40, 99 & 100, 495 & 500.

Price Anchoring
Price anchoring is when you compare your price to either a higher or lower one.  The anchor price, the one that's not yours, affects your opinion of your price.  $1,300 seems like a large number, but not when compared to $48,000.  Adversely $8 doesn't seem like a lot until you compare it to $2.

When you think of $39, $40 is the logical association.  After you think of $40, $40 becomes the anchoring price making $39 seem like a good deal.  We often end up over valuing that 1 dollar.

When a price doesn't have a 9 in it, it is missing that trigger to make you think of a slightly higher price and what you associate with the number becomes much more random.

Now that you know why 9's are so powerful in pricing, you can start using them more effectively, but better yet, you can apply the same concepts to other sales material.