Drive and Convert

Jon outlines what businesses should be paying attention to as they begin the CRO process, in order to make sure your commerce website's revenue continues to grow over time. TRANSCRIPT RYAN GARROW: Jon, usually my goals are around revenue, new clients, employees, you name it, but as a sub-point of some of my goals I find myself penciling in a line that's usually says something around improve website. Usually, when I'm penciling that in, in my head, I'm not articulating it correctly, but in my head, I want to increase the conversions with the traffic I already have, because I've already got some traffic going to these sites. I just want to get more out of it, how to squeeze this lemon a little harder and get more juice out of it, but given the dynamic nature of conversion rates based on traffic type seasonality, I've struggled with even figuring out how am I supposed to be setting a goal around my conversion rates other than just better. I want it to be better. It's never going to be good enough, everything make me happy that we've got this conversion rate, I just need to be better. As an expert in this field and probably the smartest person I've ever come across in the conversion rate space, [chuckles] should I even be setting goals around conversion rates, or should it be like am I going about it in the wrong way? JON MACDONALD: First of all, Ryan, I appreciate this topic. I think it is timely and it is something that a lot of people I talk to on a daily basis struggle with. The reality is, what gets measured gets improved. There should be some goals here, and you do need some data to make data back decisions about how to improve your site. With that in mind, I think it's only helpful to really be thinking about goals, but around conversion optimization improvement there. Yes, there's tons of goals you should be thinking about, but just better is probably not going to get it done because where do you start from that? RYAN: [chuckles] Good point. I always keep putting it on there, and I don't actually have anything around it. [laughter] Probably not the way I should be going about this. JON: One of the things to be thinking about here is that you really want to break that down a little more. I would think about it in terms of are you looking to increase average order value? Are you looking to increase the amount of people getting to a particular point in the site? A conversion rate, let's just start there. Overall, most people think it's just converting the amount of visitors into buyers, and overall, yes, that's true, but there's so much more underneath that. Think about, do you want to get people from a landing page to the next step in the funnel, and then from there to a product page and then adding to cart? Then once they're in cart to actually completing that process, and then what even happens after that? How do you get them to come back in order again? You really want to be thinking about all of the different steps that go into this and then just look at improving each of those steps. That is what is going to bring you sustainable growth and conversions as opposed to just saying, okay, I really need to just get more people to buy. We all want that, but unless you're improving every single step of the process that our consumers going through on your site, you're not going to see much of a sustainable growth there. RYAN: Got it. There's a lot in that statement from you. As an econ business owner myself, my goal is, click-buy. My thoughts around conversion rate is, all right, well, if I change my button from pink to blue, and test that A/B, one of those colors is going to cause people to buy more, but you're saying, yes, you could probably do that, but it's probably not a great good idea. You should probably start thinking about how people are getting down to that product page or getting into the shopping cart experience. Try to not lose people on the way and that would probably be and you can fix my verbiage, maybe there's a better way to starting your conversion optimization process, rather than just looking at the Add to Cart button. JON: Right. I think you brought up something that you've heard me rail on 100 times probably. Maybe that why it's in your mind. RYAN: Yes, just maybe. [laughs] JON: Is the button color issue. Here's the thing, changing a button color are very unlikely to do much for your site, but if you go online, and you Google conversion rate optimization, one of the first things that comes up is a case study around a brand that somebody wrote this article. It's been handful of years, now it's been out there and it's a running joke with our team, but a brand said they changed the button color on their website and got like $5 million in additional revenue because of that. I call bullshit, first of all. RYAN: Wow, I'll do that. [laughs] JON: Exactly. Second of all, it's really setting a bad precedent for conversion optimization because it's really not about button colors. You go online, the second thing you're going to find is checklists all over the place of things that you should just do to your site. Here's a bunch of checklists. The problem is, they're not based on data from your specific site visitors. Now, are there best practices, of course, but do they apply to you? The only way to know that is to truly understand your site visitors. That means collecting data. All of this, I've said already, data back decision making is what's imperative here. If you don't have the right data, you don't have good baselines for where you're at today, how do you even know if what you're doing is working? That's where you have to track every click and movement that people are taking on your site. What's that mean? Well, get Google Analytics, but Google Analytics out of the box, it's meant to help people like you Ryan, some more ads. RYAN: [chuckles] It's good for that. JON: It's all about driving traffic. It's great for that, but most people, unfortunately, try to use Google analytics as a viewpoint for how to improve their website, but out of the box, it's horrible at that. Doesn't mean it's not good for it, you just have to take a different view of the data and do a little bit of extra work. What does that mean? Well, really quickly, you could just go in if you're an e-commerce site and make sure you have e-commerce tracking turned on. There's so many sites, even some large ones doing tens of millions a year that don't have that box checked, and it's an easy win. RYAN: Blows me away. JON: Yes. I'm sure you see that all the time too. RYAN: I do it, just I don't get it. JON: It's all because again, only the marketing team that's driving traffic has really used GA when the e-commerce manager who is actually trying to get more sales out of the site really needs to be paying attention to this data too. The second thing is, get those heat maps, click maps, scroll maps, understand how people are engaging with each page of your site. You can get all of that data through a handful of tools. The one we love the best here at the Good is called Hot Jar, H-O-T J-A-R. It's a really great tool and helps you have a good understanding of how people are engaging with your site. Now, all of that data can then tell you what people are doing, but you also need to understand what they're thinking. That's where things like doing user testing can really come in. Understanding. What does that mean? We send people to the site, who match an ideal customer profile and we ask them to complete tasks on the site. While they're doing that, we record their screen and their audio. Now we could do a whole episode on user testing, we probably should because if you're real deep on this and the insights are just amazing. Really, the point I'm trying to make here is that you have to understand what people are doing on your site and why they're doing it, and then use that data to help you understand what you should be optimizing on your site. Then you can set some goals. At that point only should you be setting goals. You can clearly say, "Well, I'm having a huge problem where people can't find the right product that's a good fit for them. That means that I need to help them filter a little better, or change the content on my site or the navigation." There's a lot of different things to be looking out there already that you could set goals around. Maybe I want to increase engagement with my navigation by 20% because you know that's an issue. Look for the places that people are dropping off in your conversion funnel, and then set goals around that. That's going to be way more effective than just saying I want to increase my overall conversion rate. RYAN: Obviously, if you're an e-commerce site, your goal is to get more revenue to the site. You're saying, if I'm understanding correctly, I'm going to look at who converted and almost use the Google analytics visualization tools to work backwards and say, hey, well, they went here, here, here and then you had drop off here. Maybe that drop off where I'll make it up. I lost 70% of my traffic going through the funnel, maybe I go to that page or that area of the site and say, all right, how do I keep people flowing through the process to the next step in that overall conversion? JON: Exactly. RYAN: Got it. For most businesses that you've seen going through that process, is there a specific part of the site you say most e-commerce companies are overlooking the importance of that part of the site and the flow down the funnel to buying? JON: Well, I think everyone puts an emphasis on their homepage. It's the entry point for the vast majority of traffic, so it's a great place to start. I think though that you should really be focusing on what people do next. What's that second step they take from there? That's truly going to be where the decision is made or broken, and here's why. On the homepage, you're going to have a lot of people just bounce off the homepage that right away they weren't a good fit or they clicked on an ad by accident, whatever. If the highest bounce rate is going to be your homepage, almost always, but secondly, once they get to that next step, that means they're actually interested. At that point, you know in your funnel, those are the people that you need to start paying attention to. Now, I'm not suggesting ignoring your homepage. It's important. Trust me, Ryan, you've seen me do teardowns of websites hundreds of times probably now, and you know how many times I can rail on a homepage. RYAN: Yep. JON: I will tell you, there's a ton of optimization that's it's almost more meaningful for actually converting somebody at that second stage because people who get to that second step are actually interested in your product or service. RYAN: I would say it's almost more than likely a category page after that homepage leads in the e-commerce realm. You'd probably get to a product page from the homepage. JON: I would hope not because, at that point, you really are helping these people do one of two things on your site. They're trying to decide if your product or service can help solve their pain or their need. If they get past your homepage, they think that there's a chance you can help solve that pain or need that they have. Then so they're on a category page now. Now, you need to help them to understand which of those products is going to help them solve that pain or need. RYAN: Interesting, because one of the things I talk about in driving traffic, when I'm separating out like text ads versus shopping ads, almost across the board you would prefer searchers coming to your site off a text ad than a shopping app because it can land on a category page, which most of the time will convert better than a product page. I get horrible generalization across e-commerce sites, but even then, being able to focus on that category page could reap phenomenal rewards in the paid search realm in making that traffic channel much more effective and you can scale it quicker if they're converting or getting through that process quicker at least going into the next step. JON: Right. I've heard Ryan that when you send people to shopping to an individual product, I think I've heard this from you, the vast majority of people don't actually purchase that product, they buy something else, so why not send them to that category page? RYAN: Yes. If you use shopping traffic to get to the site, which I assume most e-commerce companies have done it at some point, when they land on that product page, you want them to find a category page as quick as possible. Breadcrumbs or other things, because really that's when the shopping of your site starts. A lot of product pages get bounced off of from shopping traffic because they couldn't get to a category page and find the product that they were actually looking for. If I'm taking something away from you, at least in this section, it's let's focus on some category pages. If you can, in the e-commerce space, leave the homepage, maybe for the second step as you're looking at conversion rate optimization. If they're not utilizing a conversion rate optimization agency like yours, which they probably all should, what are some of the things they need to be aware of now that they've got hot jar on their site, and they're able to watch people on the page and you can really, I mean, you can get lost in watching people click on your site? It's fascinating as you're in there. You can look up and all of a sudden, an hour's past and you've been watching people just click around on your site. Other than giving us a checklist, how should they be looking at this traffic now that they have some of this data that they've never experienced before? JON: Well, I think the first thing to think about here is most people will set these things up, pay attention to it for a week, and then they forget about it. Now, for all of your sites, how often are you looking at Google Analytics? RYAN: Probably not often enough because I'm not in the weeds as much. [chuckles] Hopefully, some of the people doing the marketing around there are more, but probably not. JON: That's fair. Think about it this way. Most of the people and I surveyed them when we start working with them as a customer, maybe I'm in an initial exploratory conversation, or we just decided to start working with them, the first thing I hear from them is, "I don't know what people are doing on my site." I say, "Well, you already have Hot Jar installed. You're using GA. Well, what's preventing you from understanding this?" They said, "Well, I just don't look at the data." I would say the first step here is just spend 15 minutes a day to set a timer because you can't get lost in it. I think the problem is most people do, what you just said is they dive in, they spent an hour at it, and then they're like, "Wow, I'm overwhelmed," and they just ignore it from there. Instead just spent 15 minutes and try to take away one small insight a day. That's it. Instead of trying to solve all the world's problems on your site, and right away, just say, okay, I'm only going to focus on watching what people do in my category page. I'm going to spend 15 minutes and try to have a good understanding here of how far down the page they're scrolling, what content they're engaging with, how they got to that page, and where they're leaving to go. Just do those four things and spend a few minutes you will learn a little bit more about your consumers that day. Then come back the next day and build on top of that knowledge. You will just continue to learn, day over day, a little bit more about your consumers, where they're dropping off and what frustrations they're having. I say this all the time, but it's really hard to read the label from inside the jar. What I mean by that is, if you are the one who designed or developed your navigation or outlined your part of category pages, you know your products so well that you just assume everyone else has that same level of understanding. They don't. Following what other people are doing on your site will really help you have empathy for that consumer on the other side of the screen. RYAN: Now, that's fine. I didn't quite write quick enough, but what are the four things you say I should be looking at for 15 minutes on Hot Jar or Analytics? JON: Where people came from, so how they got to that page. Where they're going next, so you have an understanding of whether they are clicking into a product or they are doing something else on your site. If they are clicking into a product, what are your top products? That will help you understand where to look next the next day. What they're engaging with on that page. Are they scrolling down and seeing a lot of products where they're dropping off? What content they're engaging with, et cetera? RYAN: I'm always worried on my businesses about distracting with additional information. I have one goal of driving traffic to my site, and that is to get products sold. I know some people go to sites to do research and there's a longer sales process. How aggressive should business owners be at creating that simplicity on their site and avoiding the potential distractions on the site, whether that's category or product pages when your whole goal is just to get them to buy something? JON: Well, I think you hit the nail on the head on me. Maybe it sounds too obvious, but avoid distractions. The whole point here is that consumers have lives happening while they're on your site. I have a three-year-old at home. I can tell you that I had this experience and I'm choosing a flight because this happened to me last week where I was booking a flight and my son interrupted me. I had found the flight out but I hadn't flung the return flight yet, and it just timed me out. I had to start the entire process over again. It didn't save anything, just took me back to the homepage, refreshed it, took me back to the homepage like I had done nothing. It didn't say, "Hey, we timed you out, because we couldn't save your seat anymore on that first flight, but here was the search you did, click here to start it again." That would have been such a great experience, but instead, I came back in 15 minutes, and I was just so frustrated, because it's like, oh, it's spent so much time finding that perfect first flight and now I don't remember exactly what it was. I got a look at my calendar and my agenda and start all over again. There's nothing that I hate more than wasting time and I can tell you that your consumers on websites are doing the exact same thing. RYAN: Got it. It's almost a rule of thumb and give them enough info to be interested maybe in your product or service, but don't overshare or don't put things in the way of them actually taking that next step and that can be almost a step one as you're looking at sites and trying to clean things up and the conversion rate process. JON: Yes. Look, consumers are only looking to do two things on your site, research and understand if you can solve their pain or need. If you can, they want to convert as quickly and easily as possible. Trust me, your goals are aligned on this, not only do you want them to convert quickly and easily, but they do too. Stop making it hard for that to happen. RYAN: Okay. As we dive deeper into this, like, what's a reasonable expectation for CRO improvement? Knowing that my end goal is to get more people to buy something, and I'm going back in those steps to move people through the process better, do I still set the end goal? Do I give it like, hey, I want to go from 1% to 2% on my site within the next six months? Is that a goal that makes sense or are you like you got to do it this way and it should be a lot different than that? JON: Well, I think the best goal to think about is what is the return on investment from the activities that you're doing to optimize conversion rates? The reason being is, I've worked with sites that if we move that conversion rate even a 10th of a point, it's millions of dollars in revenue. I've worked with sites where I'd have to double that conversion rate to even make it worthwhile to work with us. If you look at it in that way, it's going to be different for everybody. I don't think anybody would tell you they don't want to double their conversion rate, but the reality is that it's really hard to look at a conversion rate and compare to even your competitors. It's just that does your disservice. It doesn't help you, it distracts you. Instead, really just focus on showing incremental gains month over month, where you're looking for that small gain, and you're saying, I'm getting a small gain on my conversion rate, and that is enough to show a large return on investment from these activities. Now, how do you track that return on investment? Your goals around that should look at things even including ROAS, Return On Ad Spend. Now you're spending a ton of money to drive traffic, it's valuable, but once they get to your site, if you're not converting them, you're not making that money work as hard as it could be. It doesn't matter how good your ads are and how qualified that traffic is if your site is just tossing that traffic out the window because you made it too complicated for them to convert. There really is a nice synergy between those two areas. RYAN: A lot of the goal I'm hearing you say, would depend on how big is my site currently because moving the needle in one month, a 10th of a percent from maybe 1 to 1.1 could mean millions of dollars. That could also mean, you made an extra $15 and maybe that's not enough, and you had to get a larger goal to move the needle because you were spending more than $15 on CRO stuff. JON: Yes, and that's fair. Look, I think there's a point at which it makes sense to truly focus on conversion optimization and start working with somebody where it's a budget line item. I like to look at that in terms of traffic volume because typically there's enough traffic where we can start running some tests and get a nice return on that investment through detailed findings off of these tests. Now, that traffic level's generally around 40,000 visitors a month, which is probably much lower than you would think, but the reality here is anything below 40,000 visitors and it becomes really hard to prove a test out in a timely fashion and show a return on investment there. That doesn't mean you shouldn't be making data back decisions, or even perhaps doing testing, it just means that it's going to take you a lot longer to prove this test out. The best thing you can do at that stage is to have that data, start collecting it, start reviewing it, and then talking to your consumers and making changes based on what you're hearing and seeing them do. Instead of testing them, just go ahead and make those changes. RYAN: Do you see a difference at a high level between somebody that is a pure-play retailer and just selling a bunch of other people's products on their site, or a brand and the types of traffic and/or conversion rates, like if I was a shoe retailer versus a Nike or an Adidas? JON: For sure. I think that it all is about the context of what somebody is coming to your site to do. It's interesting, Amazon Prime, if you're a Prime customer, you're going to convert at an extremely high rate. I think it's over 70% of your visits are going to buy something on Amazon, because it's the marketplace. You have the widest selection of products possible. You can do all your research on that platform in theory and buy something and do that all fairly quickly that they've done a really great job of that, but if you're a Nike, for instance, people understand, I'm coming to Nike because I want Nike product. I'm not there because I'm trying to compare Nike and Adidas. You've already done that homework, you already have a brand affinity. If somebody is coming in with a brand affinity, they're going to stay on your site, they're going to purchase, but if somebody is just trying to buy something that is more of a commodity, and I'm not suggesting a shoe can't be a commodity but look, I play basketball, and I have a basketball shoe that I really like and there's different brands that I know fit my foot better. I have a brand affinity for those and I'm going to go use those brands. It doesn't matter how much the other brands are spending on their superstars to promote their shoes. That doesn't really matter to me. What matters to me is okay, was my foot comfortable in those shoes? It's a little bit of a different type of approach. I don't need to go to a marketplace. I need to go to the specific brand I know fits me well and I'm going to go there, see what colors they have, what styles they have and buy that. RYAN: Okay, helpful. Is there a time in the business lifecycle outside of traffic? Where does it make sense to start doing some conversion optimization? Like if I just launched a brand, it may not make sense yet to do full-blown, maybe some Hot Jar stuff, but where do you set those different things like okay, do some of your own at this stage, find some help at this stage, and oh, you need full-blown CRO agency at this stage? JON: I would say that, again, going back to visitors to your site, you need to have some traffic to your site before it even really matters to do optimization. Get yourself 10,000 visitors a month through driving some traffic, that proves it's not a product problem because no matter what, conversion optimization of your site, it's not going to help if you have a product problem. What does that mean? Well, if nobody wants your product, nobody knows about your product, your product isn't solving an actual pain or need, then it's not going to sell and it doesn't really matter at that point. Prove out your product first and get to about 10,000 visitors a month. That means that there is a need out there that people have found it and that you can successfully drive traffic through either free or paid channels. Earned or paid. The way that I look at that is between 10,000 and 40,000 visitors per month. You really should just get a list of things to change on your site. I'm not suggesting a checklist. I'm suggesting, go get an assessment from somebody who's an expert in conversion optimization. RYAN: Like Jon. [laughter] JON: Yes. I will happily do that, and really go in there and get one or two pieces of data, be it heat maps or et cetera, and make some decisions based on that data, and then just make those changes. Don't test them, just make them because they're probably at that stage where you would see a bump from just doing that. Now that you've got your return on ad spend high and you're starting to actually convert at a higher level because of those assessment changes, you should start to be comfortable spending more money and seeing a return on that ad spend, setting some goals around traffic and generation and what the revenue should be off of that. At that point, you should be able to get to 40,000 visitors. Now, it starts to make sense to do more of a tailored program where on a monthly basis, you are running multivariate or A/B tests on your site, you're starting to see a return on that, you're continuing to accelerate month over month. At that point, you will see a much bigger gain over time. RYAN: Got it. I think one thing that people also need to realize or get their mind around is something that was foreign to me before I started working with you and seeing the results of conversion optimization, but before Jon and I kind of like the pre-J arena of my life, my vision of CRO was like I spend a couple months in the site, get conversion rates up, go make a bunch more money, then maybe revisited a year or two later, get this conversion rates back up again, but that's in reality not at all what your clients are doing. They have line items of commercial optimization and their budget, and they are paying you every month and seeing phenomenal gains consistently. You've had clients for years upon years. We've shared a few clients for probably three or four years still, and it's still going. Explain that to a lot of people and how they can start reframing and understanding what a regular constant conversion rate optimization program looks like and why they should be considering that type of process for their business? JON: Yes. The best way I can describe this as liking it to here in the United States, we have a retirement account called a 401(k). Typically, what happens is your employer takes a few dollars out of your paycheck every month, you decide how much you want to put into it, and then that goes into an account that continues to grow and compounds over time. Somebody once told me that if I put $10,000 into my 401(k) when I'm 21, that would be like putting $400,000 in when I'm 40 because it just sits there and grows and compounds over time. It's the exact same thing with conversion optimization where if you just make some changes here and there, then come back to it a year later, you're missing out on that compounding effect. You're leaving a lot of revenue on the table, a lot of customers, a lot of conversions over that time. The second thing to be thinking about here is that customer actions are always changing. E-commerce is always changing. Your products are always changing. If you're a big enough brand that's doing this for years and years and years, you're coming out with new products, you're changing your product lines, you really need to understand how people are finding those products, what they're engaging with, et cetera. In addition to that, I hear this all the time, it's like Jon, how long should I expect to do conversion optimization? The reality is it does need to be a line item, it is something you should always be doing. Now, I will tell you, you will never run out of things to test. Where you need to make the decision about whether or not you keep going is whether or not you're continuing to get a return on investment from that spent. That goes back to having the right goals and tracking the return on investment that you're seeing from your conversion optimization activities. You should be getting a return on investment that continues to thrive over time. It may ever flow over the course of a year and seasonality et cetera, but in the end, you should be seen at least a 4:1. We see about an average of a 9:1 return on investment so for every dollar that you give the good, our goal is to get you $9 back in additional revenue. RYAN: That's great. JON: That's one of the highest marketing returns on investment activities that you can do. RYAN: Now, I think there's not many e-commerce businesses that I know of or that we work with that wouldn't be excited about a 9:1 consistently. As we're winding up now, the question that always comes up with CRO is probably one of the worst questions to ask you, but I have to. What's a good conversion rate? JON: Haha. I know this. I get this question daily. Hundreds of times a day. Look, here's the reality. I mentioned this earlier. It does not matter what your competition's conversion rate even is. I get that question all the time. "Hey, I think that our competition is converting a lot higher than us, I want to get up to that rate." Look, it doesn't matter. A good conversion rate is one that is always improving. That's all you should care about, is just continually making that small investment into your conversion rate so that it compounds over time, and you will see sustainable growth in doing that. If you're just looking for that once a year pop, I can tell you how to do that. Just go discount your products heavily. RYAN: [laughs] It's like the best conversion optimization right there. Just you get a 50% off sale. JON: Yes. The reality is that's not conversion optimization in terms of how I would define it, but you will get your conversion rate up. It's one of those things where if you really want to do this, you really need to be thinking about sustainable business over a longer-term. That means investing in it month over month, looking for small incremental gains, and just tracking all of these metrics we've talked about today, in whole, and then looking at that and saying, okay, our overall conversion rate is going up, yes, but there's also a ton of other metrics that are really important here. I think that's where if I see a lot of econ managers fail to sell CRO services through to the higher management, and maybe somebody sign off on a full budget, it's because they only focus on saying, hey, we're going to just improve the conversion rate. Instead of saying, look, there are four or five metrics that really matter to our e-commerce business, and yes, they ultimately gather and combined to improve your conversion rate, overall, but all of these other metrics matter just as much, because if we're not doing those metrics, then we're never going to actually convert the person in the end. RYAN: I think that's extremely important and good point there to finish up. As you mentioned, people should be starting their CRO in assessment. Funny enough, you actually do those for a lot of companies. What's the best way to get in contact with you for an assessment if they want to take that first step in CRO? JON: For those brands under 40,000, we have what we call our conversion growth assessment. That is basically gathering a couple of points of data and telling you exactly what you should change on your site based on our experience and looking at that data, and we'll help you bring those insights to the table. If you have over 40,000 visitors, we do a more comprehensive conversion audit. This is something where we spend about a month doing this audit. We're going to help you make sure you're tracking all that right data, get some great baselines, talk to all of your consumers, do that user testing, we're going to go real, real deep to help you track every click and movement on your site. Then we're going to put together a huge report, 60 to 100 pages, and we're going to tell you, not only what you should change, but how you should do ongoing testing to continue to see that compounding growth over time. All of that you can find on our site @thegood.com. RYAN: Fantastic. All right. If you need some help, or you want to take some steps in CRO, make sure you reach out to Jon and have him take things over and look at your site, and give you some feedback, but set some goals, make them appropriate CRO goals and let's have some fun doing it. JON: Awesome. Thanks, Ryan. This is fun to talk about it. RYAN: Thank you, Jon.