Wednesday, November 30, 2016

5 Ways Your E-Commerce Business Can Recover From A Growth Setback

Facing growth setbacks is part of the risk of doing business.


While most companies may only highlight their successes to the public, it's important to understand that every business has its own group of challenges. The key is to recognize the issues and take the necessary actions to move forward.


“You may be facing your share of woes from financial problems to employee shortages to increased competition. Just because those setbacks are occurring and you are struggling to survive, doesn't mean you can't turn your circumstance around,” says Inc. contributor Carolyn Brown.


Let's explore how your team can bounce back from a growth setback.


1. Reassess Your Business Strategy


When major issues arise, reevaluating your strategy is essential to realizing what happened. Moreover, your team can pinpoint the mistakes that stunted your ecommerce business growth.


So, where do you start? Begin with the problem.


Learn why the setback occurred, when it began, where it originated, and how it flourished into a setback. Dive deep into your analytics to assess your sales and reveal any gaps in your system.


Senior management recognizes that failure isn't caused by a singular event. Instead, it's usually a series of activities that slowly lead up to a business disaster. So, examine your current procedures to set up safeguards.


“The way we win business has changed radically, largely thanks to the internet and social media. Companies that are not up to speed digitally won't exist for much longer, so make sure the business is using all the technological tools it can to build momentum,” states Andrew Morris, CEO of the Academy for Chief Executives.


Nike reworked its international expansion strategy. Rather than spending an exorbitant amount of money on sponsorships to gain a global audience, the athletic apparel company initiated the NikeID co-creation platform. Allowing customers to design their own products helped the business deliver unique products that align with different cultural preferences and styles.


nike-id-inspiration


Upgrade your business strategy. Keep what works well and toss the rest to the side.


2. Deliver Customer Value


Research shows that “for every customer complaint there are 26 other unhappy customers who have remained silent.” In a market full of competitors, it's easy for consumers to try another brand.


To deliver remarkable customer value, start by analyzing your consumers' purchasing habits. Learn what they like and how specific brand interactions make them feel.


For example, if you know consumers prefer assistance via live chat rather than by phone, your team should take steps to be available online.


Collect this data by instructing your sales representatives to jot down notes during customer conversations. Or simply ask consumers to complete a short suggestion form.


Think of customer value as a cycle. You must discover the opportunities, create the offering, deliver the value, and communicate it to your audience. Then, the process starts over again after receiving the customer feedback.


customer-value-delivery-cycle
Image Source


Peepers, an eyewear company, offer shoppers more value by customizing the checkout experience. With personalized messages, customers trusted the brand and believed their credit card information were safe. As a result, Peepers received a 25-30% increase in its organic traffic conversion rate and 15%-20% increase in its average order value.


Offer unprecedented value that your consumers can't receive anywhere else. They'll be happy and your ecommerce company will reap the revenues.


3. Differentiate Your Product


Sometimes, your team must do things differently. And it might just include changing the product.


In today's economy, consumers possess a wide variety of choices. They don't have to settle for products that fail to solve their problems or fall short of satisfying their needs.


Product differentiation is a marketing technique to make your product more attractive than the alternatives in the marketplace. This difference could include customer value, design, price, or even quality.


“Don't focus on features alone, then. Instead, emphasize the benefits of those features. Your advantage lies in how your product or service ties into the emotional needs of your target audience. People make decisions on the basis of either logical reasoning or emotional impulses,” writes Entrepreneur contributor Ray Beharry.


Conduct market research to learn if you should modify your product or change the way you sell your product. To find pertinent data, host a focus group or invest in heatmap tools to monitor website interactions.


Oscar Health Insurance offers customers transparency and only focuses on a small, niche network in four U.S. states. The brand separates itself from the competition by presenting health plans in common language without the jargon.


health-plan-simple-oscar


It may be time for a product change. Find out how to fulfill your customers' desires through differentiation.


4. Hire Employees With Diverse Skill Sets


During tough times, employees are the best assets for your business. And as your company begins to change directions, you will need people invested in your brand values.


In a recovery transition, recruit talented workers with skills that complement your current workforce. Experts claim that future work environments will need people who know how to work with data, understand virtual reality, and can apply the Internet of Things to industries.


Beyond technical skills, interpersonal character traits matter, too. Focus on hiring individuals who know how to develop connections, work on multiple cultural teams, and make creative decisions. Personal finance writer Erika Rawes agrees:


“Your ability to engage in conversation, get to know someone personally, and develop meaningful relationships will provide a competitive edge over the future.”


In addition, retrain your current employees by informing them about new business strategies and expectations. It's a chance re-engage employees and to develop people professionally.


disengaged-employees-stat
Image Source


Revitalize your workforce during growth challenges. Let your business experience new talent with different possibilities.


5. Continue to Seek Growth Opportunities


Whether your company is undergoing a setback or not, your team should always continue to seek ways to expand. A proactive plan prepares your brand to handle challenges better.


Opportunity is a subjective term. What's great for one business may be a disaster for another.


Therefore, before making any hasty decisions, work with your team to know what your business needs to recover. Do you need more qualified traffic to your website? Or more skilled sales reps to close deals?


And refrain from relying only on your own experience. Your company may benefit from building ongoing partnerships with other brands.


“Don't limit yourself by your own knowledge base and expertise when your back is against a wall. Find partners who can help you implement the new strategy that makes the most sense, not the one that's easiest to execute,” writes Fast Company contributor Carson Tate.


Below is a brand partnership example from Adidas and Spotify. The companies teamed up to offer their consumers a new product called Adidas Go. The app lets customers who exercise with their iPhones listen to music through Spotify that is automatically linked to the pace of the workout.


adidas-spotify-partnership

Image Source


Growth is a continuous process for companies. Uncover new opportunities to respond to infrequent difficulties.



Aim to Recover


Challenges are inevitable in business. It's vital to understand how to handle setbacks when they occur.


Reevaluate your strategy to ensure it fits your desired outcomes. Deliver unmatched customer value that competitors can't duplicate. And continue to seek partnership opportunities that will benefit your brand.


Push through setbacks. Grow your business.


About the Author: Shayla Price lives at the intersection of digital marketing, technology and social responsibility. Connect with her on Twitter @shaylaprice.




Tuesday, November 29, 2016

How Fixing Client Analytics Can Help Agencies Sell More

A completely accurate client analytics account is few and far between.


That forces you, brave agency veteran, to roll up your sleeves and try to make sense of the chaos you're looking at for each unique scenario.


You didn't plan for it. You didn't charge for it. And now, if you don't fix it, you'll face an uphill battle in trying to prove the resulted you delivered.


Like it or not, addressing this issue head-on and fixing client analytics can help you sell more, and sell more profitable work.


Here's why.


The Problem with Pricing Digital Services


Most clients have no idea what we do.


They pay us – very well in some cases – despite not truly grasping how we're going to deliver the goods for them.


Sure, they might grock the buzzwords a little bit. They understand the jargon and the high level perspective. But it's mostly a superficial understanding.


When you get down in the weeds, and start describing how exactly to get from A -> B, you start to lose them a little as glazed over eyes stare back at you.


That's not a knock; it's just reality.


In the same way you probably could care less about what's wrong with your car engine and how a mechanic is going to fix it. You just want to know if you're going to be able to make it to Happy Hour in time this afternoon.


More often than not, clients are paying us based on trust. Or a leap of faith. Or our smiles and fashionable clothes.


And when they don't fully grasp the full context of their problem, or the work involved in each painstaking individual step you have to take to fix it, they gravitate towards the one thing that's easy to separate you from everyone else that says they do exactly what you do: price.


Cue competitive bids and escalating downward pricing pressure.


So what do you do the next time around?


You piece together a meager cost plus estimate that rarely includes Profit (and you've undoubtedly underestimated Project Management), double check the marketplace, and rush it out the door.


In contrast, the best, most profitable agencies use value-based pricing. Instead of starting with what their internal costs might be, they start with forecasting:



  1. The new revenue a client can generate, or

  2. The cost savings a client might see as a result of working with them.


For example, you can take a look at their historical averages of traffic and leads. If you're able to come in and bump that conversion rate by 10%, 15%, or even 30% over the course of a few months, what does that look like in new revenue based on their average customer value?


sensitivity-analysis-lead-conversion-rate


Boom. If simple conversion tweaks and changes can lead to $40K-$160K+ in new revenue, there's MORE than enough room to pay you 20-30% of that.


That covers your software, payroll, meetings, and then some. You can actually scale a business on that.


Even better, is if you can show how increases in results – less your agency costs – results in NET gains too.


organic-search-growth-revenue-growth-spreadsheet


But there's a problem.


You can't even begin to forecast potential revenue for clients like this when they're missing a critical piece of the puzzle.


Why Fixing Your Client's Analytics Should be Priority #1


Value-based pricing includes showing a client the outcome and end results of your work in clear-cut business objectives that they can understand (like leads gained or costs saved).


But…


If they don't have a complete view of their marketing and sales funnel – which, like 97.75% of companies are guilty of – you've got a problem.


To make matters worse, these issues can be tough to spot ahead of time, before you dive into their account (which means you probably didn't plan for it in your timeline and you sure as hell didn't charge for it as a line item).


Maybe the conversion-tracking pixel is on the wrong page (or even worse, sitewide). Or perhaps they're using legacy CRM software that doesn't allow you to figure out what happens after someone becomes a lead (like, where's da revenue coming from?!).


Either way, before you even touch a single line of code, fix a broken link, or put together a wireframe, you need to get an accurate benchmark of where a company is at right now.


Here are three reasons why.


Reason #1. Determine Where Results are Currently Coming From


A quick view of a company's Acquisition Channel performance in Google Analytics can give you a snapshot of where they're at, and how they're doing.


Sure, the visits or sessions piece is moderately helpful, cluing you into which campaigns are delivering (or not).


But the real value comes in analyzing which channels specifically are driving leads and customers (and how much each is worth).


Now you start crossing over from raw data to insight. You're able to draw lines between where budget is being spent and where results are coming from.


This helps you figure out what's already working for clients so you can pour on more, and spot what's already been tried that hasn't worked (so you don't make the same mistakes).


Arguably more important though, is that it will provide you with a baseline to compare against after you deliver your services.


revenue-report-tracking-advertising-kissmetrics


Reason #2. Isolate Campaign/Promotion Attribution


You hear that?


The screeching tires. The scent of burning rubber. A loud crash.


That catastrophic train wreck of epic proportions you're about to witness is your new client's analytics.


Their complex, multi-faceted business has taken its toll, with independent systems for each department that don't work well together (and would require a quant-jock, Business Intelligence analyst to figure out).


Instead of relying or messing with existing systems, setting up a third-party analytics solution to isolate how your campaign and promotion is performing might be an easy way to sidestep the nightmare.


fall-promotion-landing-page-new-funnel-report


This Funnel Report will not only show you which promotional efforts are driving awareness, but also give you insight into the funnel performance for each channel, helping you identify patterns and discrepancies between how visitors from each channel (like cold vs. warm traffic) add items to your cart or complete a purchase.


You can dive even deeper into the individual customer profile, taking a look at the specific steps they took prior to purchase. This can help you identify which pages are assisting conversions, and also spot any bottlenecks or gaps that others keep hitting that causes them to bounce.


person-details-kissmetrics


Reason #3. Make Better Marketing Decisions


Leading indicators are helpful. To a point.


They give you a preview or snapshot of what might potentially happen on down the line.


For example, SEO is a lagging indicator. Sure, you can measure new pages built and new links generated, but it's still gonna take some time for Google to reindex, new rankings to fluctuate, traffic to start dribbling, new leads converted from said traffic, and only then do you get some verifiable sales opportunities to start tracking.


That means you've got a waiting game, and in the meantime you're making a bunch of changes and assumptions based on incomplete information.


Things get especially challenging when some of these indicators can lead you astray, like when that high conversion rate might backfire.


Here's how it works: you run some headline A/B tests with generate more initial leads. Numbers go up and you pat yourself on the back. Only problem? Sales – the number that actually matters – go down as a result.


Fortunately, the Kissmetrics A/B Test Report can help you run split tests that will only declare a winner when an event is met further down the funnel, which helps you avoid getting too excited over an increase in clicks (which aren't super helpful) and waiting for the big payoff instead (conversions).


kissmetrics-ab-test-report-on-engage


How to Sell Extra Work with Analytics Insight


Design is subjective. It shouldn't be, but it is.


My favorite thing to witness is a fiftysomething executive who has literally zero knowledge of art and design, or the owner of an old-school insurance brokerage, make specific design critiques and changes (like, “I think that shaded border should be gold instead of gray”).


Which, if I were a designer, would surely cause me to become a statistic you hear about on the Nightly News.


So how can design, something so subjective that every client thinks they can do better than your Creative Director, deliver quantifiable results that will allow you to charge more?


Look for leverage points.


For example, why does someone need that new landing page?


“I need a landing page design for an AdWords campaign,” says the client.


Ok cool – then in reality they don't just want or need one landing page, but they're gonna want (and need) multiple ones. Here's why (and how to sell it).


Landing page design will help dictate Quality Score, which has been proven multiple times to influence your Costs Per Click (and thus, Cost Per Conversions).


cost-per-conversion-quality-score-graph

Image Source


“If your quality score increases by 1 point, your cost-per-conversion decreases by 13%,” according to Jacob from Disruptive Advertising.


Awesome. So in order to increase that quality score as much as possible, you're going to need specific and relevant landing pages for each campaign you're running. Which means you're going to need multiple versions of the same page so that you can align message match to drop your Cost Per Conversion and increase the total conversions you're getting.


Now, that's going to require some extra work.


You, dear client, will also want to make sure that copy and content changes for each page and that you set-up at least basic analytics to make sure we can track all of this and make iterations on-the-fly. That's going to require these new additional line items to our scope.


We recently went through this exact process on a new website redesign and performed a quick analysis after 30 days with the new AdWords landing pages.


The results?


We compared results to the same period, prior year to rule out seasonality. So in 2015, their Cost Per Converted Click was $482.41 and their Conversion Rate was only 4.08%.


cost-per-converted-click-1


During the new 30-day window in 2016, their Cost Per Converted Click dropped to $147.65 and their Conversion Rate jumped to 12.76%.


cost-per-converted-click-2


Total score?



  • Cost/Converted Click: 69.39% cost reduction

  • Conversion Rate: 212.74% conversion rate lift


Now multiply those 'efficiency' metrics against the results (like total leads, or the amount spent for those leads), and you can quickly highlight your financial value.


Think there was enough room in that budget for a few extra landing pages? And now some more work?


Our only job as a consultant is to improve the client's position. (I think that comes from Alan Weiss.)


You're the expert, not them. And as such, you need to fight for the scope (and thus the required resources and budget) it's going to take in order to deliver the results a prospect or client is looking for (whether they understand what it's going to take or not).


Because my hairline is becoming increasingly more like Jason Statham's, and jawline has never resembled Brad Pitt's, the only way I can figure out how to do this is through cold, hard, analytical data.


Conclusion


Clients commonly don't fully understand the scope of what you're being asked to do.


That's OK. It's manageable.


But only if you can translate your value into something they do understand – like marketing KPI's or business objectives like revenue and costs.


The problem is that becomes impossible without a strong foundation for analytics.


There's no way to benchmark past performance, to isolate your individual campaigns, or spot customer bottlenecks along the way.


Fixing or addressing a client's analytics problems then should become priority #1.


Because it will not only help you justify the current work you're doing for them, but also sell the results in the future to them and new ones just like them.


About the Author: Brad Smith is a founding partner at Codeless Interactive, a digital agency specializing in creating personalized customer experiences. Brad's blog also features more marketing thoughts, opinions and the occasional insight.




Monday, November 28, 2016

PPC Advertising Hack: Super-Targeted Live Chat Prompts

How do I get potential customers to engage on my site?


If you're trying to run a business online, this is a critically important question to answer-especially if you're running any sort of pay-per-click (PPC) advertising.


Clicks and site traffic simply aren't enough. If you want your business to succeed, you need conversions and sales.


Now, hopefully, since you're here on the Kissmetrics blog, you already know that. You're constantly improving your PPC traffic and optimizing your landing pages for maximum conversion rate.


But still, you want more out of your site. Wouldn't it be great if there was an easy way to get even more people to engage on your site and convert?


Well, fortunately, at Disruptive, we've come up with a PPC advertising hack that uses live chat prompts to quadruple chats and increase conversion rates by up to 20%.


Here's how it works:


People Love to Talk


Whenever someone visits your site, it's because they need something. Maybe they have a problem they need fixed. Maybe they have a question they need answered. Maybe they simply want to feel understood.


No matter what the reason, people come to your site because they need something. If you can get them to talk about what they need, they are much more likely to feel connected to and engage with your business.


In fact, if you can get people talking, you're much more likely to win their business-half of leads choose the first company they speak with.


The good news is, people love to talk and they especially like to talk about their problems, concerns and frustrations-the exact things that brought them to your site! All you have to do is find a good way to start the conversation.


Vanilla Chat Prompts


To better understand this, pretend you're a guy who's going to propose to his girlfriend soon. You enter a local jewelry store and start looking at the diamond engagement rings. A salesperson walks up and greets you with a cheerful, “It's a pleasure to see you today! What can I help you with?”


How would you respond? Odds are, if you didn't already have a specific question in mind, you'd probably just shrug and say “Oh nothing, I'm just looking.”


That's not very helpful to either of you, is it?


Well, guess what? Most chat prompts start with generic questions like, “Can I help?” For example, check out the chat prompt below:


answering-service-care-good


This doesn't really do much for them or you, unless you show up on their site with a burning question you're dying to ask.


Now, don't get me wrong, this sort of chat prompt is great if you're in the customer service department, but we're marketers. We're trying to start a conversation, not fill a troubleshooting queue.


Useful Chat Prompts


So, what sort of chat prompt start a conversation? Let's go back to our engagement ring example.


After a somewhat underwhelming experience at the first jewelry store, you check out a second place and a new salesperson appears. This guy, however, asks you a specific question that relates to what you're looking at, like “Is there specific cut you're looking for?”


This is a much better conversation starter now isn't it? It's an open-ended, specific question that shows the salesperson's interest in helping you.


Let's apply this to chat prompts.


Instead of leading with “Can I help you with anything?” consider leading with something more directly relevant to your business. For our answering service, that might look like this:


answering-service-care-better


A chat prompt like this uses something the answering service knows about their visitors (they are probably there because they need a high-quality answering service) to try and start a conversation.


After all, if you want to prove that you're a high-quality answering service, what better way than to let people try before they buy?


It's a great idea, but the problem with this prompt is that it still doesn't really draw people into a conversation. If someone is seriously considering this service, they're probably going to chat in, but a lot of those people probably would have converted anyways.


Engaging Chat Prompts


Truly engaging chat prompts aren't just focused on meeting customer needs-they actually get people to talk about those needs, wants and desires.


Back to our engagement ring salesperson example. You still weren't sold in store #2, so you head to jeweler #3. Here, the salesperson came up to you and said, “I noticed you're checking out our engagement rings. When are you popping the question?”


The answer to that question will give the salesperson everything he needs to get a conversation started, steer you to your ideal ring and close the sale.


For example, if you answer, “I want to ask her in a couple of weeks, but I wanted to see what my ring options are,” he might respond with:


“Great! Congratulations! I asked my wife to marry me in December, too. Do you have any idea what sort of cut she likes?”


Look at that! You're only a few sentences into the conversation, but the salesperson has already identified your needs, made a connection with you and shown that he's on your team.


Assuming each salesperson has a ring and a price that fits your needs, which store are you more likely to buy from? If you're like most people, the answer is jeweler #3!


Crafting a Conversation Starter


Now, all of this is great advice for jewelry salespeople, but how do you start a conversation like this online?


Well, the secret to salesperson #3's success was the fact that he used what he knew about you and why you were there to draw you into a conversation. Your PPC ads tell you the exact same information-all you have to do is use it!


For example, let's take a look at how I ended up on that call answering service page. I found their page by searching for “virtual answering service” on Google.


answering-service-ads


The search term I used and the ad I clicked tells them a couple of important things about me:



  1. I'm looking for a virtual answering service. The fact that I typed in “virtual answering service” means I know what a virtual answering service is, what it does and I think I might need one.

  2. Their ad resonated with me in some way. Quite a few selling points appear in this ad (call recording, price, family owned, etc), but the main message seems to be “24/7- Never Miss Another Call!” Clicking on their ad tells them that this idea probably resonated with me.


Taken together, these two points tell a story about me that the answering service can use to create a great conversation starter-possible something like this?


answering-service-care-best


Odds are, if I'm looking for a virtual answering service and clicking on an ad that tells me “never miss another call,” missing calls is a real problem for my business. I'm probably frustrated, angry and would love to vent to someone about it.


What better way to get me talking than to ask me about the very thing that brought me to their site in the first place?


Not only will this start a conversation, it will also tell the chat operator a lot about what I am looking for in an answering service, which will allow the operator to emphasize the selling points I really care about.


For example, if I talk about a valuable prospective customer that I lost because no one was there to answer the phone at 3 in the morning, then the operator can emphasize that their service can respond to calls at all hours of the day.


See how powerful starting a conversation can be?


How To Customize Chat Prompts


Now, at this point, you may be thinking something like, “Well, that's all great, Jake, but how would I ever even start customizing my chats like this?”


It's actually pretty simple. All you have to do is use your UTM parameters.


Setting Up UTM Parameters


Hopefully, you're already using UTM parameters to track marketing performance in Google Analytics.


If you're not, don't worry, it's easy. Google has an online URL builder that's quite easy to use. All you need to do is enter your landing page's URL, put in the info that you need tracked and then Google will generate the UTM parameters for you:


utm-parameters-demo


In addition to helping you track your PPC results, UTM parameters also create a unique URL you can use to customize your chat prompts.


Using Your UTM Parameters


Personally, I find that the easiest way to set up custom, highly targeted chat prompts is using Olark (note, I don't have any financial relationship with Olark, they just have a great tool). So, for the purposes of this article, I'll show you how to set things up in Olark.


To set up customized chat prompts, all you have to do is log into your Olark account and choose Settings, then Targeted Chat, then +New Rule.


setting-up-targeted-chat


Once you've done that, add a UTM parameter that's specific to your ad to the “Current URL contains” section and change “Expand the Olark chat box” to “Send this message to your visitor” as follows:


targeted-chat-demo


Last of all, add your conversation starter and hit “Save Rule.” You're good to go!


Once you've got this in place, when someone clicks on your PPC ad and arrives on a page with your UTM parameters, your custom, targeted conversation starter will pop up and get them talking!


Conclusion


Remember, as you're getting used to this, you may not get a ton of chats right off the bat. As with site optimization, you'll probably need to test a bunch of different prompts until you find one that really catches your traffic's attention.


Still, in our experience, creating targeted, conversation-starting chats can be a tremendous way to boost the conversion rate of your page.


So, take a bit of time, come up with some chat prompts that address the real reasons why people are on your site and start testing!


What do you think of this strategy? Does it make sense to you?


Once you've tried this tactic, let me know what your results were in the comments!


About the Author: Jacob Baadsgaard is the CEO and fearless leader of Disruptive Advertising, an online marketing agency dedicated to using PPC advertising and website optimization to drive sales. His face is as big as his heart and he loves to help businesses achieve their online potential. Connect with him on LinkedIn or Twitter.




Thursday, November 24, 2016

User-Generated Content: The Secret Weapon for Your Next Email Campaign

Today's economy is all about social proof.


User-generated content (UGC) is one way to showcase why your brand matters. Moreover, email combined with UGC is a chance for ecommerce businesses to connect with consumers and generate revenue.


Olapic found that “user-generated content in email sees a 43% increase in click-through rates and a 2-3X conversion rate.” Visualization and authenticity accelerates consumers' desires to purchase.


“UGC creates an opportunity to transition customers into brand advocates and provides customers with instant feedback about the product that doesn't appear as a list of features,” says Kimberlee Morrison, a SocialTimes columnist.


Let's explore how to integrate UGC into your next email campaign.


Earn Credibility


Integrity remains a cornerstone in the business sector. If you can't prove that your company has the trust and respect of your customers, the market will question your influence and services.


That's why social proof is an effective tool for earning consumer's confidence. Having others speak on your behalf means people are willing to vouch for your brand's quality. In essence, it shows potential customers that your business deserves their attention.


“The purpose of user-generated content is to humanize your brand. And with 51% of consumers trusting user-generated content over information on your brand's website, you can build better relationships with this content stream,” says Alex York, a writer and SEO specialist.


Email is one of the best methods to exhibit your UGC. This communication channel gives your subscribers an intimate perspective on how your company can serve their needs.


In addition, research shows that “77% of consumers prefer email for marketing communications.” Customers can read your messages when and where they prefer, unlike a phone call.


UGC lets your audience see real-life testimonials about your products. Below is an example email from Foot Locker. The footwear retailer displays selfies from customers wearing its sneakers. The brand also encourages others to participate with the opportunity to be featured in the next email campaign.


foot-locker-social-proof
Image Source


To earn extra credibility with your consumers, publish the first name of the individual beside the UGC. Or link the person's social media account to his or her submitted photo. This tactic reassures the email subscriber that you're highlighting real people in your emails.


Validate your brand's worth with user-generated content. It'll uncover more value to your customers.


Create Commerce


At the end of the day, your purpose is to bring sales to your company. And your team's marketing efforts must possess a connection to revenue. If not, you risk losing sight of business goals.


Salesforce Marketing Cloud reports that “20% of marketers say that their business' primary revenue source is directly linked to email operations.” Email is more than just informing your subscribers about product releases or sending the occasional thank you note.


“Email is one of the most popular channels retailers use to engage with new and returning shoppers. Triggered emails are especially powerful to re-engage shoppers who have abandoned some type of action on your site,” states Liz Bedor, a senior content marketing manager for Bluecore.


Use email to bridge your UGC to the sales funnel. For instance, consumers in the awareness stage may benefit from content that displays multiple products sold by your brand. This exhibition will show off what you can offer interested buyers.


On the other hand, when consumers are ready to buy, focus on adding a call-to-action to your UGC that leads people directly to your product pages. GlamGlow places UGC alongside the product with a link.


glamglow-user-generated-content


Another approach is to tie your sales to a notable charity. Studies reveal that “at least 70% of millennials have purchased a product that supports a cause.”


ONA, a retailer of fine bags and accessories, teamed up with charity: water to donate a portion of its sales to the nonprofit. Customers were sent an email motivating them to buy a specific product and to show their support with hashtag #GivingTuesday on social media.


ona-giving-tuesday


It's possible to attach user-generated content to your sales strategy. Experiment with different options to find what works for your business.


Host Contests


Your team recognizes the benefits of UGC combined with email. However, how can you inspire consumers to actually create it?


Hosting contests and giveaways is a simple technique to acquire UGC and spread the word about your brand. People want the chance to really engage with your culture.


Decide what type of campaign you want to run. What will be the theme? How will consumers enter the contest?


Be specific on what is acceptable UGC. Some companies prefer photos featuring their products, while others desire text describing their services. A good tip is to focus on how the customer experiences your brand, rather than emphasizing your products.


Also, think about what prizes will be suitable for your participants. It must be enticing enough to get them involved, but not too extravagant that your business is struggling to make payroll.


“To give your subscribers an extra push to submit, you can hold a contest, with a gift certificate or other prize going to the most creative submission,” writes Amber Humphrey, a VerticalResponse contributor.


JewelMint promoted its #FestivalFashion giveaway via email. The message persuaded consumers to snap photos of themselves wearing the brand's products during Coachella. Tagged pictures on Instagram gave the entire community the ability to see the entries. Winners received four pieces from JewelMint's collection.


jewelmint-social-proof-contest


As always, check with your legal department when initiating contests. You need consumer permission to use content, and it's vital that you adhere to all your local laws.


Make submitting UGC a fun-filled experience. It's time to host your very own contest.


Build Community


The power of UGC lies in its capacity to amplify the voices of your consumers.


Just a couple of decades ago, companies controlled how they crafted messaging around their brands. Now, customers can post content, positive or negative, about their experiences.


Your business can help narrate UGC by building a community of advocates. These brand ambassadors are engaged individuals who emulate your company culture and speak highly of your brand amongst their peers.


“By utilizing UGC, brands give real users the opportunity to tell real stories – something that may be inherently missing from brand generated content,” says Brian Peters, social media at Buffer.


With email, you can talk directly with consumers and build camaraderie through customer anecdotes. Your subscribers receive a personal view of how others interact with your brand.


Fashion retailer Revolve sends emails with photos spotlighting its clothing worn by brand advocates. It's unique and strengthens the company's credibility in the marketplace.


revolve-clothing-hashtag
Image Source


Shape how your brand is presented to the public. Enlist influencers to move UGC in a favorable direction.



Try UGC & Email Together


Leverage user-generated content to build trust with your email subscribers. Demonstrate your brand's uniqueness and build real consumer connections.


Earn credibility by adding customer testimonials to your emails. Host contests to excite consumers about submitting their content. And link UGC to your sales funnel to add revenue to your bottom line.


UGC is your secret weapon for your next email campaign.


About the Author: Shayla Price lives at the intersection of digital marketing, technology and social responsibility. Connect with her on Twitter @shaylaprice.




Monday, November 21, 2016

7 Laws of Sales Funnel Physics Every SaaS Business Needs to Know

Back in college, I visited to this run-down pizzeria shop called Sammi's.


Their logo had a picture of a pyramid on it. No one understood what that had to do with pizza.


I pitched Sammi repeatedly on my startup's text message coupon product at the time. He never bought.


But I'll never forget the time I saw him hand a $200 check to some kid selling an ad from a local magazine like it was nothing.


Two-hundred bucks looks like a lot of money when you're a nineteen-year-old college kid. And especially when all your customers are on free-trial.


What caused Sammi to buy a print ad but not what I was offering?


The education you need to become an effective marketer is just a lot of little experiences like that.


Those experiences are like “flicks” to your forehead.


They are the market saying “Pay attention!” as it tries to teach you something.


In the years since that time at Sammi's, I've started and launched a SaaS business. Today I run a growing subscription-based service business. So far, my team and I have created hundreds of sales funnels for startups and small businesses. I also had the opportunity to lead a Mastermind group for entrepreneurs starting SaaS companies.


From this wide mix of experiences, I've been able to observe several success patterns. These success patterns are relevant to every business marketing itself online-but especially SaaS companies.


I'm telling you this, because what I'm about to share with you is not just theory.


This is about people. It's about the people who are stuck in your sales funnel. It's about the people who haven't heard about your product yet. And it's about the people who are your competitors.


While people may not always behave in a predictable manner, they are influenced by the Laws of Sales Funnel Physics.


Let's jump in.


Note: At 6,300 words, I don't expect you will read this all in one sitting. So I created a free PDF of this resource that you can refer to again and again when it's time to redesign your site.



  1. Law of Visibility

  2. Law of Big Changes

  3. Law of Repetition

  4. Law of Clarity

  5. Law of Proof

  6. Law of Friction

  7. Law of Alignment




First Law of Sales Funnel Physics: Law of Visibility



What is it?


Imagine two different scenarios.


Scenario A-Relaxing on the beach on a hot summer day with no sunscreen.


Scenario B-Relaxing on the beach on a hot summer day when your doctor shows up to tell you you're at risk of getting skin cancer.


In scenario B, you're going to react right away. You're on the beach without sunscreen, and the doctor has given you urgent information on why you should wear sunblock.


If putting on sunscreen became your “conversion goal” after the need was recognized, B outperforms A, because the offer is right in your face.


That's why the first law of Funnel Physics is the Law of Visibility. In other words, people will convert on offers that are highly visible and noticeable to them.


If they don't see it, they won't convert.


So it all comes down to something being seen.


Now, how can we apply this to your marketing funnel?


Example:


call-to-action-mixergy


Andrew Warner and his team at Mixergy rolled out a new site design a little while ago.


One thing that stood out to me was the prominent call-to-action button in the top right corner.


It's visible on every page of the website.


This is an excellent example of the Law of Visibility in action. By featuring a highly visible call to action (CTA) for your core offer across your website, conversions are almost guaranteed to increase.


In fact, we did the same thing on our website:


sign-up-now-cta-on-website


We wanted more people across our website to see and learn about our productized service. You can see below how this change had a sustained impact on how many people viewed our homepage.


sharp-increase-in-google-analytics-graph


But this is just one example.


How to Apply it to Your Marketing Funnel


Let's brainstorm for a second.


Where can you put in place a simple change like this on your website to cause more traffic to flow deeper into your funnel?


Think in terms of “global” or structural changes that will be seen across many pages on your website.


Here a few ideas off-hand:



  • Navigational changes like the example above

  • Redesign or add a CTA to your footer

  • Install an exit pop-up

  • Promote a lead magnet in the sidebar of your blog, as well as at the end of every blog post

  • Run a new campaign using Kissmetrics Engage that targets only visitors with a specific offer


Those would be the top ones to implement, especially if your SaaS business is trying to grow via content marketing.


The Bottom Line


Offers-free or paid-that aren't seen, don't convert. So shine some light on them!




Second Law of Sales Funnel Physics: Law of Big Changes



What is it?


Imagine you're an engineer building a cross-country railroad.


But there's a problem: a stretch of mountains lies in-between the train's start and end points.


You have two options: you can lay the track so it snakes around the mountainside, or you can use explosives and heavy drills to create a tunnel that goes straight through.


Which do you choose?


Consider that the universe is (mostly) rational. By this, I mean there is cause and effect.


Nothing happens unless something causes it.


If you want to cause growth in how your sales funnel converts, you have to make a significant change to your sales funnel-the copy, the structure, the design.


Whatever big result you are looking to produce, be prepared for the change to be significant from the customer's standpoint.


That last part is important, because you are trying to influence your target customer, and changes that seem significant to you may not be that different from their point of view.


Sometimes the difference is hard to understand.


In the mountain scenario, the decision becomes easier if we view it as a customer optimization problem.


We could ask, what does a passenger on the train line want?



  • Do they care about seeing the beautiful snow-capped mountain scenery while on their cross-country journey?

  • Do they care more about getting to their destination faster?


There is a big difference between drilling a tunnel and snaking around the mountain. But if you know your customers value a shorter trip, the tunnel would be the better choice.


If they care more about speed, then the answer to the problem is to drill a tunnel through the mountain.


Lucky for you, you're laying down code on your website, not train tracks.


Example:


Demo Consultation vs. Instant Video Demo


This is a good one, especially if closing the sale means getting on a phone call.


The example below is from a case study where a consulting company A/B tested a “Free 5-Min Demo Video” offer in place of an offer to schedule a demo consultation.


increase-your-fleets-roi


fleet-roi-demo


The results were powerful.


By changing the offer to a demo video instead of a scheduled demo, the conversion rate went from 1.7% to 15.3%-a 9X increase. The offer of the free demo won in a landslide.


Although nothing on the page changed except the text describing the offer, this mattered a lot from the customer's perspective.


Why? Most people aren't enthusiastic about scheduling a demo or a consultation because it requires them to (1) wait, (2) coordinate their schedule, and (3) commit a fixed amount of time.


The “free 5 min demo” offer converts much better, because customers can watch it right away without a phone call.


Side note: We recently tested this same idea of a free demo offer on our pricing page vs. scheduling a consultation. The data is still coming in, but lead conversions are up significantly.


This example illustrates that structural changes are most important when you are thinking about “big changes.” Structural changes include a difference in the number of steps or the offer itself.


This is different from merely changing design or copy, because it represents a more significant change to the customer's experience in your funnel.


As a result, the change is more drastic and so are the results.


Freemium vs. Free Trial


When I started my first SaaS business, we offered a free trial.


Later, we removed it and went from generating weekly sign-ups to zero (bad move, duh).


A better example here is Mailchimp. After building a profitable business with 100,000 users, they went freemium in 2009 offering free email marketing accounts to 500 subscribers.


One year later, they reported a revenue increase of over 150%.


How to Apply it to Your Marketing Funnel


If you're not converting or you see a big bottleneck in your online sales funnel, start with a BIG change.


Go big or go home! If you're only seeing a “trickle” of people moving from one step to the next, the issue is probably bigger than simply, “Oh, let's test a different headline,” or “Oh, let's change the button color to yellow.”


The Bottom Line


The results may be positive or negative. The important thing here is that you won't really know which version is more effective unless the spread is statistically significant.


When creating an A/B test or a sequence test to improve your conversion rate, go for big changes. Little changes (usually, but not always) yield a proportionally smaller result.


So blow a hole in the mountain.


Challenge your assumptions.


And take a walk in your customer's shoes.


Big changes mean big growth for your bottom line.




Third Law of Sales Funnel Physics: Law of Repetition



What is it? You've probably heard some guru say that people don't remember a brand name until the 7th time they've heard it.

This is not that.

The Law of Repetition says that following up multiple times (via email automations, retargeting ads, or call-to-action buttons on your website) will cause more conversions within your funnel.

Yes, you could say that this law is saying, “beat your prospect over the head with your offer enough times, and you'll get more sales.”

That's true, and it's why spammers use this technique.

But I am not advocating for that. Rather, I am giving you this universal pattern with the hope that you will use it responsibly.

Let's look at a few examples.


Examples:


The Law of Repetition is about repeated messaging and consistent follow-up.


This happens when you are presented with multiple lead magnets asking for your email address.


For instance, Clay Collins and co. over at Leadpages have repeatedly pointed out that each of their blog pages have multiple offers and CTAs. This, in turn, has helped them quickly build an email list of 200,000+ email subscribers.


leadpages-cta-on-blog


I applied and refined this technique on my company's website in 2014 and later wrote about the results in a guest post on Leadpages. I gave the method a name-“The Every Page Rule.”


The Law is always in effect when you implement email follow-up sequences or retargeting ads.


In 2013, I tried my hand at launching an info product. The email sequence I wrote was “OK” so I rewrote it and kept iterating.


The final sequence was aggressive with the follow-up, but the truth is that it worked. People bought the course at a very consistent rate.


Noah Kagan later reminded me of this principle when he published some research from people using his SumoMe tool to help people build their email lists faster.


The research showed that people were more likely to opt-in if they were repeatedly shown the pop-up on a website until they signed up.


Again, not saying that's the best way to do it. In fact, I would say being too aggressive makes you look not cool.


Want another example? Look at the Kissmetrics funnel. If you sign-up for a free trial or opt-in to one of their lead magnets and request a demo, you are instantly entered into a follow-up sequence where an Account Manager will contact you to schedule a demo.


And here's one more from a little-known multi-billion dollar company called Amazon.


Ever heard of Prime?


Prime is a premium subscription which gives Amazon customers perks like free 2-day shipping and access to streaming movies.


The Amazon website is covered with call-to-action buttons for Prime, and 54 million customers have opted into this service as a result.


amazon-prime-buttons


How to Apply it to Your Marketing Funnel


If you're a SaaS business, you can apply the Law of Repetition in a variety of ways to your own sales funnel.


Here are the best ideas, in order of priority:



  1. On-site CTAs that are clear and relevant to the stage of the funnel the prospect is in.

  2. Follow up with potential customers using an email automation to get them on the phone, get their feedback, or nudge them toward signing up.

  3. Show an ad or link in your blog's sidebar or navigation, along with an exit pop-up, to promote your lead magnet and grow your email list.

  4. Get more return traffic with retargeting ads. Make sure to segment visitors based on where they are in your funnel. For instance, you may want to treat people who reached your checkout page differently from those who signed up for your free 5-day e-course.

  5. Finally, you can get more advanced using a combination of tactics (Think: Amazon + Smart Funnels). For instance, after a customer checks out, you can upsell him/her on the benefits of the next level pricing package. Similarly, when he/she comes back to the website later on, he/she will see CTAs on the blog nudging him/her and offering benefits for upgrading. This can also be done over a course of weeks or months via automated email follow-up to anyone who has purchased.


The Bottom Line


Repetition yields higher conversion rates and can also increase the value of an average customer to your business.


Don't let leads forget about you and your services-constantly remind them of what you offer and how it can benefit them.


Just be sure not to overdo it, or you risk hurting your brand.




Fourth Law of Sales Funnel Physics: Law of Clarity



What is it?


“Better to be clear than clever.”


When I was a little kid, I'd go to the doctor at least once a year for my checkup.


I remember the waiting rooms were always gray and super boring.


So I'd pick up one of the outdated magazines they had laying around and flip through it.


I found most of the ads weird and frustrating, because I couldn't tell what they were trying to sell.


Did they want to make money, or just confuse people? It was unclear to me.


Turns out, I was on to something.


Fast forward years later to the first time I heard the expression, “Better to be clear than clever” from Dane Maxwell, a serial entrepreneur, while he was being interviewed by Andrew Warner from Mixergy.com.


This expression highlights the biggest reason why most sites don't convert well in the first place: people don't buy what they don't understand.


Many people make the mistake of focusing on creating a catchy headline, instead of focusing first on customers' understanding by creating effective copy for their sales funnel.


Consider a few examples.


Examples:


The following case study documented on Visual Website Optimizer's blog illustrates how clear copy converts.


Movexa is a supplement product with a direct response website funnel. In other words, they are looking to make sales directly to people visiting their site.


In an A/B test where they clarified what the product was by adding the word “supplement” in the headline, sales increased by nearly 90%!


supplement-word-ab-test


Here's another example from a company selling personal training subscriptions.


As cited by Unbounce, the company A/B tested a clearer “boring” and uncreative headline against the original.


The result? 38.46% more training memberships were sold.


clear-creative-headline-test


Michael Aagaard, the author of the case study reflected after the fact:


“I have yet to see a creative headline beat a clear headline in an A/B test.”


Clarity over cleverness, indeed.


Further, research has consistently confirmed that website users prefer copy that is “simple and direct.” Here are a few key nuggets from the research conducted by the Nielsen Norman Group:



  • “Users often leave web pages in 10–20 seconds, but pages with a clear value proposition can hold people's attention for much longer.”

  • Users will often have multiple windows or tabs open and leave and come back to your site within a single session. When this happens, having clear straightforward copy helps the reader to re-establish context.

  • Of the first three items a user focused on, almost 80% was on text, not graphics.

  • Reduce use of wording that could be seen as marketese (i.e. clever copy or slogans) in order to build trust.


How to Apply it to Your Marketing Funnel


Of course, you could jump right into A/B testing.


But this wouldn't be much better than taking a wild guess.


You'll be more likely to see growth if the changes you make are inspired by feedback from prospective customers. You want to hear from users currently “stuck” in your funnel who are actively considering your product.


You want to hear the questions they have, ask them open-ended questions, and hear how they react to your website's current copy.


Here are the two best ways to do that:



  1. User feedback survey tools can be set to automatically ask visitors leaving the site a question. Survicate is a free tool that works well for this purpose. HotJar is also a very solid option with lots of additional features, which now has a free plan for basic use as well.

  2. Order a user test where complete strangers will test your website. It's ideal if you have people in your target market test the site, but when it comes to knowing if your website communicates clearly, feedback from strangers can provide a just as actionable insight. I recommend browsing Fivver for user testing services or check out UserInput.io (this one gives you more options for targeting).


After you have some actionable feedback (make sure you get enough so you notice patterns), it's time to test.


If you have less than 10,000 visits per month, it could take a while to reach a high level of statistical significance for your A/B test. It might not even be worth a/b testing.


In that case, you might just want to do a sequence test (“before and after”). With this test, you can see an impact on your bottom line in as little as a month with a reasonable degree of certainty. Just make sure you are accurately tracking results before and after, while also tracking conversions that matter, like leads and sales.


For example, at Petovera we saw 25% MRR growth from June to July after we re-launched our new homepage, pricing page, and free email course.


mrr-growth-chart


The sales results from this test were so significant compared to other months. When considered with the fact that no other major component changed on the site, the only conclusion we can draw is that the changes caused this growth.


Note: This example highlights both the application of the Law of Clarity (we did research on our target audience's needs and questions before rewriting the copy for greater clarity), as well as the Law of Big Changes covered above (copy completely revamped along with the design).


The Bottom Line


The words you use to communicate about your product matter more than design.


Site visitors need to trust you; providing them with a clear understanding of the product's value and how it works is a critical lever for growth in your sales funnel.




Fifth Law of Sales Funnel Physics: Law of Proof



What is it?


People buy what other people buy. That's because we seek to minimize the risk of potential loss by relying on what other people are saying.


We are programmed to be loss-averse creatures.


Don't believe me?


Watch yourself the next time you are picking out a movie on Netflix or browsing for a new book on Amazon.


Personally, I won't buy a new book without at least 250 reviews and an average rating of 4 stars or higher. Even 4 stars is “iffy.”


I use the same risk minimization when it's time to kick back and enjoy a new movie on the weekends. Less than 4.5 stars? That's a no-go.


Your habit for loss aversion might be slightly different. Maybe you read individual reviews.


The point is, your customers operate the same exact way when they enter your sales funnel and become interested in your product.


The Law of Proof says that people are more likely to invest time and money in that which they see as low risk and likely to give them the result they desire.


Proof (or “social proof”) can come in a wide variety of forms:



  • Testimonials

  • Reviews

  • Case studies

  • Examples of past work (e.g. from a designer's portfolio)

  • Vanity stats (e.g. “over 10,000 happy customers serviced since 2010”)

  • Customer logos

  • Press logos

  • Networking groups

  • Third party accreditations (e.g. certified Google Adwords Partner)


Other than making your business look legit, social proof elements will increase conversions in your funnel.


Example:


WikiJob, a website with over 500,000 monthly visitors ran an A/B test on their homepage.


The one thing they changed? A simple testimonials section was added. Here's what it looked like.


testimonials-wikijob-ab-test


The result?


Here's the response from the company owner:


[Adding the] testimonials increased sales by 34%. The testimonials we used are very 'sober' (compared with the overly enthusiastic ones you so often see in marketing literature). The test results were surprising. Although such increases of sales can be quite normal in split testing, I did not think that testimonials would make such a difference (and indeed put off testing them, thinking they were irrelevant). The increase in revenue was very substantial.


Social proof can make a huge impact because it influences how trustworthy people perceive your brand to be. It lowers perceived risk.


Research from Nielsen showed that 70% of people trust recommendations from people they don't even know. That's compared to 90% of people trusting recommendations from people they do know.


How to Apply it to Your Marketing Funnel


Test adding social proof on key landing pages.


Generally, it's a pretty safe bet ASSUMING you have taken into account the context and the user's intentions for that POINT in your funnel.


Here's what I mean:


Derek Halpern documented a case where adding social proof did not grow conversions. See graphic below where the middle version won.


newsletter-signup-ab-test


However, this is actually an example of the Law of Friction (discussed below) vs. The Law of Proof and NOT an argument against the effectiveness of social proof in general.


The middle example simply requires less “mental load” to understand. It could be as simple as the fact that the number “14,752” is difficult to read and the middle variation is visually more attractive because it is simpler.


Similarly, last year we A/B tested a Leadbox for our newsletter in the sidebar of our blog.


leadbox-instant-access-ab-test


leadbox-help-me-grow-ab-test


Here are the results:


ab-test-results


The one without the social proof won by a large margin.


Here's one more case study to drive home the importance of understanding context and user expectations when considering where to integrate it in your funnel.


security-seals-ab-test


Security seals-also a common example of social proof-build trust, right?


Well, it didn't work as one might have expected when tested on this lead generation form.


Version B increased conversions by 12.6%. In this case it didn't work out, because security seals are associated with online checkout. As a result, users were confused or put-off by it.


The Bottom Line


Social proof is a key point of leverage when optimizing your sales funnel.


However, you'll need to A/B test to know for sure. If your traffic is too low for A/B testing to be a realistic option, do a sequence test after taking into account user context and intentions.




Sixth Law of Sales Funnel Physics: Law of Friction



What is it?


Since I began my career as a web-based entrepreneur at 19, I've done many A/B tests and been part of many research-based website design projects.


I've spoken with hundreds of business owners about their conversion issues since that time.


I'm always learning, but I can say from experience that this issue is one of empathizing with the end user who is on your website.


That's what it comes down to because people on your website have goals.


Often the business owner doesn't know the potential customer's goals or how their website is “blocking” these customers from buying.


This is what is meant by friction. When friction is minimized-and a user's goals are made easier to accomplish-conversions go up.


Let's look at a few examples that support this principle.


Examples:


An online retailer was able to increase annual revenues by $300 million by changing a button.


In a now-famous case study, Expedia was able to increase profit (not sales) by $12 million by removing a single text field from their checkout form.


And Barack Obama's re-election campaign was successful in part because of rigorous A/B testing that minimized friction and in turn grew donations by 49% and sign-ups by more than 161%.


Let's walk through each case briefly.


Kyle Rush was on the optimization team for President Obama's re-election campaign.


They conducted numerous tests, and in his own words, Kyle explained how much he was able to learn due to the high traffic the site received.


This made A/B testing different designs and copy ideas easier, because they only had to wait days or even hours for results.


Here's the law of friction at work in one of their tests.


obama-ab-test


In the variation they tested on the right, the idea was, “maybe we can convert more people to make a donation if we make the donation process appear easier by breaking it into steps.”


The result was a net increase of 5% in donations. It might not sound like a lot, but over the course of a campaign and raising many millions of dollars, it is.


Jared Pool observed the Law of Friction at work for a major online retailer. He saw that 160,000 people per day were requesting a password reset on their account prior to checkout, and 75% of these people ended up not completing their purchase.


The issue was people would go to check out and be confronted with a simple but supremely annoying form that asked them to register in order to check out.


As one user who tested the site for Jared said:


“I'm not here to enter into a relationship. I just want to buy something.”


The solution? They replaced the Register button with a Continue button and added a note:


“You do not need to create an account to make purchases on our site. Simply click Continue to proceed to checkout. To make your future purchases even faster, you can create an account during checkout.”


The result? $15 million in new sales in the first month and +$300 million in additional sales for the first year.


Finally, the case of Expedia:


expedia


Simply by removing the “Company name” field, profit (not sales) grew by $12 million per year.


Of course the question is, why?


Well, the field simply confused users and set the wrong expectation. For instance, some thought that company name meant the name of their bank, which would cause them to put in the wrong billing address and then the payment would fail. This, in turn, killed sales.


The user interface was causing friction in this case.


Or, as Jon Correll from Conversion VooDoo put it,


“Conversion rate optimization gains are often just a function of getting your broken UI the $!@$!@ out of the way of your end user.”


How to Apply it to Your Marketing Funnel


Start by understanding where the bottlenecks are in your sales funnel.


Where are people dropping off? Look for outlier numbers.


For instance, a couple of months ago I saw that 60% of people clicked through from our homepage to our pricing page, but then only 7% made it to the checkout or consultation pages.


Numbers like this serve as a compass because they point you toward what should be worked on.


Next, as I discussed in Law of Clarity above, you want to gather lots of feedback from users.


You can have strangers test it, or you can talk directly to existing users of your site.


Both have worked in my experience. However, getting at least 10–15 people from your list of existing users will yield more accurate results.


If you're doing it over the phone, establish rapport first, then ask open-ended questions and listen.


Maintain detailed notes as you go through this process. Look for patterns, but NEVER guide or do anything to influence the answers.


Again, you are gathering this feedback, because without this data, you will not gain a clear understanding of what is blocking sales on your site.


Once you have identified a pattern-perhaps a recurring type of complaint directly related to the bottleneck in your funnel-then you can start testing possible solutions.


Don't expect an immediate $300 million change in your business overnight, like in the example above.


But also don't underestimate the impact you can have with small, deliberate changes that work to address the source of friction in your funnel.


The Bottom Line


Friction is caused by design or copy that is not fully optimized to help people entering your funnel accomplish their goal. This matters whether their goal is buying from you or efficiently learning what you have to offer.




Seventh Law of Sales Funnel Physics: Law of Alignment



What is it?


Johnny rides a red bike.


He arrives at your imaginary bike store.


You try to sell Johnny a new set of tires, but he declines.


Why did Johnny not buy? Because the offer wasn't aligned with his needs.


The difference between alignment and friction is that friction comes after alignment in the buying process.


Alignment deals with helping customers to identify the need your product can address.


Friction deals with the interactive experience of buying and how easy or difficult it is.


Alignment deals with the customer's intentions, questions, or context (like what previous website or page the customer came from).


Get it? Got it. Good!


Examples:


Here's an intriguing case study to demonstrate the Law of Alignment in action.


An SEO link-building company called The HOTH originally relied on a fairly straightforward homepage to generate leads for its service.


hoth-ab-test-original


Leads were converting on the page at 1.39%.


Ok, not terrible.


So they tested the page against a minimalistic design.


hoth-ab-test-variation


The results? 13.13% or almost a 10X increase in the number of people converted to leads by creating an account.


The reason this worked was explained by the case study's author:


[The] majority of visitors coming on The HOTH website were from the direct and referral category. Hence, they had some background knowledge of the company already. This was also true for the social traffic. A very large portion of their search traffic also came from branded keywords…


In other words, the context of the people arriving on the page meant that they didn't need a lot of information about the service in order to convert. They were already aware of the company's service, and many already had some trust built with the brand.


The simplicity of the form aligned best with what they already knew or felt about the company's offer. They didn't need a long landing page in order to convert.


Important note: The HOTH's website today looks a little different, with a video at the top above the form. This pushes the form and call-to-action button further down, below the page.


I would speculate that this introduces some friction on purpose.


Why?


I would guess-from direct experience doing lead generation for similar businesses-that the friction is good, because the leads are more educated and higher quality.


After all, you have to assume that a significant percentage of the traffic that does come to that homepage isn't 100% familiar or clear on what the company has to offer.


Here's one more example to prove the pattern of the Law of Alignment.


A personal organization service drove search traffic to a landing page via pay-per-click ads.


Which version do you think won?


organization-service-ab-test


Version B would seem to have a clearer, more benefit-oriented headline and subheadline.


But actually version A was the winner, increasing leads by 115%.


The reason is version A's copy was written to align with the PPC ad copy that the user clicked on before arriving to the page.


The ad created an expectation of ideas in the mind of the user. So arriving on the page where the copy complemented and reflected those same ideas made them more likely to convert.


How to Apply it to Your Marketing Funnel


Traffic arrives on your website from five basic sources:



  • Direct (people typing in your website or clicking a link in your email)

  • Search

  • Social Media

  • Referral

  • Paid ads


The source heavily defines the context for people on your site.


One key to using the Law of Alignment in your funnel means tailoring the page that people enter into your website to the context of the traffic source.


Of course, you can take this to an extreme (i.e. if your traffic comes primarily from Google, that doesn't mean you should redesign your site to have a similar UI and layout to Google with the hope of increasing conversions).


A more practical approach is to ask yourself:



  • How can we make that “on-ramp” into our funnel more inviting and anticipatory of the visitors' needs?

  • What answers do visitors expect to find on each page based on what they searched for prior to arriving there?

  • What reassurances, if any, do they need once they are in the funnel, browsing our site, and evaluating our product?


As covered above in the Law of Clarity and Law of Friction, you have to do your research and listen with empathy to gain the biggest insights that will lead you to alignment.


The Bottom Line


The context from which a visitor comes to your site needs to be addressed, as does how you will deliver the information they need prior to making a buying decision.


Conclusion


I titled this article as “Sales Funnel Physics” because as in physics, these laws identify the universal principles behind why people do or don't buy online, assuming there is a market need for the product.


I have not been able to find any case studies or A/B tests that do not fall under one or more of these principles:



  • The Law of Visibility says that offers must be seen in order for sales and conversions to occur. Sounds obvious, but it's too often forgotten.

  • The Law of Big Changes says that as a general rule, testing more significant structural-, copy-, or design changes to your funnel is a best practice. This is because big changes will cause proportionally more varied results than small changes. It doesn't have to “look” like a lot of work, as long as it is significantly different from your customer's perspective.

  • The Law of Repetition is different from the Law of Visibility, because it says that the frequency of exposure to your offer has a direct impact on conversion rates. More exposure to the offer causes more conversion, though ROI diminishes after a point because people get annoyed.

  • The Law of Clarity says that before people become interested and decide to buy your product, they must first understand what it is.

  • The Law of Proof says that people care a lot about whether or not your product actually does what it claims. People are risk-averse, so they desire proof in order to minimize perceived risk before buying-in the form of testimonials, case studies, etc.

  • The Law of Friction says that the easier you can make the experience for an interested buyer, the more likely he/she will buy!

  • Finally, the Law of Alignment says that people will convert more often on offers and landing pages that better align with their context, like from which site they just came.


Have you noticed similar patterns when designing your sales funnel?


How will you apply the Laws of Sales Funnel Physics to grow your business?


Tell me about them in the comments and I'll respond :-)


About the Author: Matt Ackerson is the Founder of Petovera, a company that specializes in growing email lists faster with a pop-up optimization service. Business owners never have to lift a finger and you can see the results each month. Kissmetrics readers can grab an exclusive copy of the Law of Funnel Physics summary today, along with our free 5-day email course: How to Double Your Leads in 30 Days.