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It’s time to talk about your total 2020 budget. No, not your 2019 budget; that’s pretty much set based on your performance over the course of this year. I want to talk about 2020. Think of it like a visit from the ghost of marketing budgets future. The past is gone, the present is established, but the future is in your hands.
As such, I’m going to hit you with some truths:
- The year will fly by, and before you know it, 2019 will be over.
- You don’t have much time. What you do now will vastly impact your success in 2020.
- You need to centralize your marketing strategy around conversion optimization if you want to hit your goals.
Conversion optimization has the ability to improve every single one of your primary KPIs and improve the performance of all of your big campaigns. Decreasing CPAs and increasing revenue will have monumental impacts on future budgets, allowing you room to make some big moves in 2020.
Here’s how conversion optimization can get you there:
1. Improve CVR: Convert More of the Users You Already Have
This is, by definition, the purpose of conversion optimization. It’s obvious how improving your conversion rate will impact your success:
Better CVR = More Revenue = Bigger Budgets = More Freedom
Reaching your target customers through advertising is getting more and more difficult. More companies are competing for the same audiences, buyers are experiencing fatigue, ad spend can’t be increased exponentially and achieve the same results because of diminishing returns, privacy protections are blocking our access, etc., etc., etc. The answer should be obvious: Convert more of the traffic you already have. Just like the longstanding marketing adage, “It costs more to attract a new customer than keep an existing one,” it costs exponentially more to attract new traffic than convert the traffic you have.
2. Increase ROAS: Get More out of Ad Spend
How you budget ad spend for 2020 will be based on how your campaigns perform in 2019. But a lot can be happening on your site that gives you an inaccurate picture of how specific ad campaigns performed. Were your landing pages optimized? Was the messaging consistent? High bounce rates can indicate issues with the landing page that would harm conversion metrics, making those campaigns seem less effective than they were.
Investing in conversion optimization means analyzing those pages and fixing usability issues. Testing your landing pages helps you understand which paths create the lowest barriers to conversion. It allows you to drive paid traffic down the best path, ultimately improving the viability of all paid campaigns and allowing you to make better decisions about where to invest your ad spend.
3. Improve AOV (Average Order Value): Increase the Amount Each User Purchases
Conversion Optimization doesn’t just influence the amount of people who convert; it can impact what products they are interested in, and the perceived value of those products. One critical step to successful conversion optimization is conversion research*.
Through conversion research, we can understand observations such as why ecommerce customers are leaving certain items in a cart, or why B2B users are purchasing at a certain tier. We can then alter the way we position elements and value propositions to drive users to purchase at a higher dollar value.
Example: A past growth team I worked on was able to increase AOV by 29% for a self-service B2B platform through strategic changes to their pricing popup. By changing the offering name for each pricing tier and altering the way features were listed, we were able to drive a significant number of users that would have purchased on a lower tier up to the middle and top tier.
If you are a shifting your strategy to up-market buyers like that company was, it’s not enough to shift your advertising. Your site needs to be adjusted as well, and testing that messaging ahead of time to see how it resonates can be highly effective.
*Conversion research helps you understand what users are doing and why. At 3Q Digital, we use a structured methodology that includes heuristic evaluation, analytics, UX analysis, usability studies, heat mapping, and several other qualitative and quantitative research methods to get a full view of what drives users to take specific actions.
4. Increase Customer LTV: Create Loyal, Repeat Buyers
Conversion optimization can increase customer LTV in a few ways. First, through value proposition analysis we are able to understand what features and values resonate best with customers. This helps build a better case for purchase.
On the flip side, we can reduce anxiety about purchasing by giving customers important information they need to make an informed decision, which helps them feel at ease and reduces buyer’s remorse. If a customer makes a purchase and feels like they weren’t given the right information, they may feel cheated and will be less likely to purchase again. Information like shipping details and return policy can be particularly important. Including this type of information in the right places can improve the buying experience, making customers more likely to come back and purchase again.
We can also reduce barriers for existing buyers to purchase again by making it easy to find the products they already like. For instance, the 3Q CRO team worked with a supplements and vitamins company that had a majority of return users as opposed to new visiting the site. The team ran several tests to improve the user experience, including simplifying the filtering options and emphasizing search on mobile. We saw a 3% increase in overall conversions (which for their target KPIs was no insignificant amount).
Conversion optimization is a powerful tool for building the trust and satisfaction needed to keep your buyers coming back for more.
5. Increase CTR: Learn What Is Most Important, and Translate It into Other Channels
Conversion optimization and its foundation of conversion research will allow you to discover some key actionable insights about your customers. These insights should absolutely not be siloed into changes strictly for your website. Your newfound understanding of what resonates with your audience should absolutely be tested in other marketing initiatives, especially in your ads in order to maintain consistency between the messaging the ads convey and what users will see when they hit your landing page. This feeds directly into improved ROAS mentioned above, further benefiting the efficacy of your ad strategy as a whole.
6. Avoid Costly Redesigns: Iterating Constantly, in Small Steps, Reduces Need for Major Overhaul
Our VP of Conversion Optimization likes to joke that pretty doesn’t convert. Companies will spend thousands and thousands on costly redesigns of their entire site, only to find their conversion rates plummet. Why? Because beautiful doesn’t always translate to functional. Fancy graphics and breathtaking imagery can be distracting. Will they be for you? I don’t know. It’s not for us to decide, it’s for your customers to decide.
Using conversion optimization, we iterate constantly based on what we learn about users. Then we aim for high-velocity testing. That velocity is made possible by researching and understanding how elements impact whether your users complete desired actions. Is a website redesign in in your 2020 budget? If so, conversion optimization is a 100% necessary step. Figure out what your users like and don’t like about your site. Use site testing to understand their pain points and needs. You might find you don’t need a whole new website after all (and save yourself hundreds of thousands to millions of dollars along the way), but if you do, the insights you gain from conversion optimization will be mission-critical to its success.
7. Strategy: Spend Less on Competitive Research and Customer Strategy
How much are you spending on understanding your customers and competitors? More importantly, are the insights you are gaining actionable? When conversion research is done correctly, its benefit is twofold. You’re learning about your customers, but in a targeted way that can be applied to benefit your conversion rates right away. You might not end up with a persona to hang on the wall of your office depicting your target client as a 54-year-old woman named Sheryl who likes pugs and enjoys vacations in Miami, but you’ll get something much more actionable. It’s not just about knowing who a customer is, it’s about using what you know about them to drive them to complete specific actions. That’s what conversion optimization is.
If you’re budgeting (hundreds of) thousands of dollars over the next few years for customer and competitive research, you’ll want to invest in conversion optimization strategy as well so that you know how to put what you learn into action.
Implementing conversion optimization doesn’t happen overnight, but because of its iterative nature, you can start reaping benefits right away that will have a dramatic impact on your strategy and budget in 2020. Don’t wait. 2020 is closer than you think, and decisions you make today will decide your path for the future.