Optimizing Conversion Rates: Less Effort, More Customers

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Sometimes small changes can have huge effects. Concerning conversion rates, which is the proportion of website visitors who submit their contact information or make a purchase, better Web design leads directly to greater revenue.

Most online store designers who want to optimize their conversion rates only concentrate on the “inner” part of the shopping process, the sales funnel. They focus on product pages, the shopping cart and check-out-process. This is good, but not necessarily sufficient. It is equally important that advertisements convert – just as the simple fact that users find the URL and that both (ads and URLs) perfectly fit the image conveyed by the landing page. Sound practices make for the most successful conversions.

There are thousands of tips and tricks for increasing conversion rates. There are various marketing techniques that aim at simplyfing the purchasing and the checkout processes. This article is the first part of our new 3-part-series “Optimizing Conversion Rates” that covers most important strategies and techniques that will help you boost your conversion rate. The second part will be published next week, and the last part will be published the week after that. The first article deals with “proper” advertising, building up trust and credibility and the handling of shipping costs.

Create Suitable Ads

Let’s look at traffic coming from an online advertising campaign. This is traffic you can directly influence by changing content, display frequency and display location.

Relevance

The key to good ad performance is relevance. And the most important key to relevance is “negative selection.” Look at the platform your ad is running on; Google, for instance. Are there users on that platform who would want nothing to do with your product? Are there keywords people would use in a search that might mislead to your website? Use negative selection to filter visitors whom your products are not targeted to. This mechanism will work as a magnet for more relevant visitors.

A good example is local content. If you have a car repair garage located in Birmingham, England, you should include this location, because users from London would be less likely to become customers. What’s more: If irrelevant users click on your ad, they will cost you PPC fees and lower your score in Google’s ranking.

Connection between a search term and an ad

A second and very important criterion is to establish a strong connection between a search term and your ad. A search term can tell you a lot about a user’s search context. And your ad has to address that context by delivering the right answers.

To start simply, divide your audience into at least two segments:

  • Novices who know very little about your product, your company or even the industry. You will have to explain your product to these users.
  • Experts who search for the exact differences between your and your competitors’ products.

Now analyze the keywords you have chosen. Divide them in two groups, and develop two or more variants of your ads that respond to the needs of each of these audiences.

The same applies to display advertising. The more generic the host page (whether a portal, home page or navigational page), the more basic the information your users will need. This applies as much to the content of your ad as to its graphical elements.

Google Search results1
Google Search Results2 suggest that Creed is the “worst band in the world”. If there was a possibility to influence Google index, the band “Creed” would probably have done it.

And the ad alone mustn’t only demonstrate relevance to your visitor. Your landing page must meet users’ expectations as well. Both your landing page and ad should work as an informational unit. A not-so-savvy-novice who is looking for a solid MP3-player may be interested in the battery life and price, while an expert may want to know full technical details such as the technology used, available ports, advanced features or maybe the coolness of the design.

To sum up, relevance is probably the most important criterion for successful conversion. This separates good communication from inefficient communication. Even the location or size of your company can be relevant if users fear that their order may not be delivered on time, intact or at all. Simple page elements like a photo of your company’s building or storage depot can do a lot for credibility.

Build Up Trust And Credibility

You may already know this, but there is something deeper than just relevancy. Sales can be lost if a potential customer decides to ignore certain sellers or certain kinds of sellers. This even holds true for retailers selling on eBay or by posting ads on Google. Some people mistrust eBay sellers in general.

Report3
In a study by the Foresee Institute54, researchers found out that only 49% of Internet users in the US are willing to use native online payment methods like PayPal and Google Checkout.

Consider the payment method, for instance. Most eBay sellers use prepayment, which is very convenient for the seller, but may scare away the potential customer. In a study by the Foresee Institute54, researchers found out that only 49% of Internet users in the US are willing to use native online payment methods like PayPal and Google Checkout (see the section “How Satisfaction Influences Loyalty and Purchase Intent” in the Apparel & Accessories Report6 (pdf)).

This distrust of transmitting sensitive payment data and integrated security systems in general is a good lesson in what it takes to build trust.

Money-back guarantee

Money-back guarantees can make a purchase easier, even when mistrust or uncertainty have a significant impact on the customer’s deicision-making. Offering your customers such a guarantee, you build up the feeling of trust and comfort, making it easier for users to actually purchase a product. In Europe money-back guarantees are required by law, so many European companies use it as a sound marketing argument in their campaigns.

Sitepoint7
Sitepoint8 promises a no-risk money-back guarantee for its books. That’s fair, honest and sounds trustworthy. It may also be a good idea to add the “money-back guarantee” into the shopping cart by default, so they are packaged in warm feelings, making it a central focus of users.

These considerations may help you to build up a trustworthy environment for your customers, but they alone will not necessarily be able to make a difference. In fact, trust and credibility have a subtler, more emotional dimension.

A professional design is necessary to differentiate your business from that of amateurs and students who sell out of their grandma’s living room. How about showing photos of your team members? Tell your customers your story, create a relationship with them, show them your “human touch” by talking with them honestly. Provide your customers with e-mail addresses of the team, phone numbers, and, of course, e-mails – that’s another sign of confidence. And, of course, if you have excellent user recommendations on eBay, LinkedIn or any other price comparison websites, you can display those, too. And you should!

Don’t Push The Customer Away With Shipping Costs

This is almost the same point as the one about money-back guarantees, but a bit more nuanced. Too many sellers have abused their customers trust by hiding shipping costs to generate extra revenue. This has now become obvious to most users. It’s not just about the added costs; it’s about fooling customers.

The aforementioned Foresee study9 analyzed 10,500 shopping transactions in 30 online stores. By far the most important feature that significantly improved the conversion rate was the simple fact that a seller didn’t charge any shipping costs; it was the decisive factor for 34% of all users.

There are two reasons for this. First, when shipping charges aren’t added later, users will know the final price of their order early in the shopping process, maybe even when they see the online ad. For you as a seller it means that you remove the barrier between user’s decision to buy a product for a given price and his confusion about the “final” price during the checkout procedure.

Secondly, the price is more “transparent” and users can easier decide if they are interested or not; besides, they can also easier compare a product with other products. The customer not only compares online stores but also compares online stores to the “real” ones. Purchasing from a real store can sometimes be faster than doing it online, and no shipping costs can certainly compensate for that.

Sometimes, particularly if the seller is shipping worldwide, delivery costs can not be avoided. In these situations make sure that the available shipping options are clear, transparent and easy to understand. The customer came to you to purchase a product, not to spend minutes on decrypting the complex costs matrix. Consider the following two examples (screenshots below). The more complicated a shipping costs table is, the more likely a user is to cancel the checkout process and look for alternatives. Even a tiny doubt or confusion can completely change customers’ decision, so you better do a good job of making it easier for them to finish the checkout process.

Shipping Costs: Bad example10
This isn’t helpful for customers: a complex overview of shipping terms and costs on Badgepoint11.

Shipping Costs: Good example12
A simple overview of shipping costs on Selectspecs.com13.

However, if free shipping is a viable option in your business, you may want to try it out, since it may significantly boost your conversion rate. Of course, free shipping is not really “free shipping,” at least not for the retailer. But there are some strategies that can be adopted: a minimum order price or value, for example. But do not block the user from ordering if this minimum is not reached. Add a shipping cost and call it a “Small-order fee.” Inform the user clearly how much more they will need to purchase to qualify for free shipping.

Another idea: how about offering users free shipping on their first transaction? You could look at it as an investment to gather their registration data. Or specify a certain time frame in which customers can redeem the free shipping offer and state it on the ad. The technique is similar to issuing coupons for in-store shopping, and it puts more pressure on the customer – but in a positive, money-saving way.

You simply have to calculate how much more overall revenue you can generate by dropping shipping costs. Try it out – you won’t be disappointedt!

Stay Tuned

This article is the first part of our new 3-part-series “Optimizing Conversion Rates”. The second part will be published next week, and the last part will be published the week after that.

  1. Optimizing Conversion Rates: Less Effort, More Customers16
  2. The Conversion Is All About Usability17
  3. Use Conversions To Generate More Conversions18

Hence, you may want to subscribe to our RSS-feed19 Subscribe to our RSS-feed20 and follow us on Twitter21 Follow us on Twitter22. Any ideas or suggestions? Comment on this article!

Footnotes

  1. 1 http://www.google.com/search?hl=en&rlz=1C1GGLS_deDE291DE303&q=worst+band+in+the+world&btnG=Search
  2. 2 http://www.google.com/search?hl=en&rlz=1C1GGLS_deDE291DE303&q=worst+band+in+the+world&btnG=Search
  3. 3 http://www.foreseeresults.com/Thank_Top100_May08.html
  4. 4 http://www.foreseeresults.com/Thank_Top100_May08.html
  5. 5 http://www.foreseeresults.com/Thank_Top100_May08.html
  6. 6 http://www.foreseeresults.com/_downloads/researchcommentary/Top-100-Apparel-Commentary-Spring08.pdf
  7. 7 http://www.sitepoint.com/books/design1/
  8. 8 http://www.sitepoint.com/books/design1/
  9. 9 http://www.foreseeresults.com/Thank_Top100_May08.html
  10. 10 http://www.badgepoint.com/en/shop/shipping-terms.html
  11. 11 http://www.badgepoint.com/en/shop/shipping-terms.html
  12. 12 http://www.selectspecs.com/info/delivery-information
  13. 13 http://www.selectspecs.com/info/delivery-information
  14. 14 http://answers.polldaddy.com/poll/1595153/
  15. 15 http://answers.polldaddy.com
  16. 16 http://www.smashingmagazine.com/2009/05/05/optimizing-improvig-conversion-rates-less-effort-more-customers/
  17. 17 http://www.smashingmagazine.com/2009/05/15/optimizing-conversion-rates-its-all-about-usability/
  18. 18 http://www.smashingmagazine.com/2009/05/23/optimizing-conversion-rates-less-effort-more-customers/
  19. 19 http://rss1.smashingmagazine.com/feed/
  20. 20 http://rss1.smashingmagazine.com/feed/
  21. 21 http://twitter.com/smashingmag
  22. 22 http://twitter.com/smashingmag

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The german journalist writes on webdesign and usability subjects since 1994. He worked in one of the first editorial portal teams at a forgotten service called EuropeOnline and co-authored ProSieben online which ist now one of the biggest media sites in Germany. Puscher wrote the first German book on Usability, his current publication "Leitfaden Web-Usability" is on sale these days.

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  1. 1

    cool article

  2. 2

    I really like the idea with free shipping. It is obvious that the shipping cost is embedded in the price but – this is something that I would pick instead of a product that shows the shipping fee near.

  3. 3

    As someone involved in E-Commerce, these articles are great!

  4. 4

    Great article. I would also suggest viewing MarketingExperiements.com webinars, those are the ULTIMATE in online optimization.

  5. 5

    very relevant.

  6. 6

    The problem with this is you’re never sure if it’s your changes which increase/decrease your conversion. You need some kind of AB/ Multi variable test to be able to see if your changes are having a positive/negative effect.

  7. 7

    You may want to change the image on the front page, or everyone who is like me and doesn’t read the text there will wonder why this article isn’t about money conversion rates.. (I did think it was a weird topic for a whole article.. Then I started looking over the whole article and realizing that it had nothing to do with money conversion rates.)

  8. 8

    relevant and impressive

  9. 9

    Nice blog post ! who is (By Frank Puscher) and where is his twitter ?

  10. 10

    Very good roundup guys ;)

  11. 11

    The shipping table examples really amused me. It shows the principles of simplicity and how it is overlooked.

  12. 12

    Floris Fiedeldij Dop

    May 5, 2009 6:55 am

    Regarding the poll… The majority wants SEO at the moment, if you do go for SEO articles, please don’t just take the angle of ‘do this to get better ranking’ nonsense, please please please consider the other side of it too. SEO spam, and SEO myths and SEO services, and case study of traffic and improvement in sales and end-user experiences etc.

  13. 13

    As someone who loves this topic and spends many hours pouring over usability, heat maps, eye-tracking, A/B testing etc etc can I simply say…this is a good start!

    Keep it up for the other two :-)

  14. 14

    I think the best design is the one that gets out of the user’s way… I know a lot of websites and their designers that think they “know” what users what and force them to have it! And thats the problem! The best solution is to simply make the design accessible and almost transparent… thats not to say it can’t be beautiful… but minimal is better!

    Alex

  15. 15

    Good stuff, do more of this and less of those annoying top X lists.

  16. 16

    its like this place can read my mind. All i have to do is close my eyes click my heels together three times and think about what I need to learn about.. AND POOF! its on SM the very next day. You all have advanced so far in mind reading technology its actually.. getting a bit scary.

    Thanks for the great stuff as always.

  17. 17

    Wow, great tips SM. Will definitely help in marketing…thanks!

  18. 18

    It’s a good article and relevant to my tasks at the moment. Keep it up!

  19. 19

    David Desjardins

    May 5, 2009 8:34 am

    You must have spies in our offices.

  20. 20

    Nice tips!

    Typo in URL? “/optimizing-improvig…”

  21. 21

    Thanks for covering this topic.

    Words of advice to PPC users: test, test, test! Use multiple ads and see which one works best. And get more relevant PPC traffic using negative keywords.

  22. 22

    Paul Hancox (.com)

    May 5, 2009 3:14 pm

    Nicely detailed article with some great ideas… but you may want to test locating the Google Ads a bit lower down than underneath the headline… :)

    Paul Hancox

  23. 23

    Can I suggest everybody voting for more SEO topics opts for something else? There’s a million and one excellent resources for SEO as it is, but there isn’t enough on marketing & e-commerce..

    Great post by the way.

  24. 24

    Internetová agentúra

    May 6, 2009 2:26 am

    I’m making decisions about shipping costs at this time. So i’m very thankful for this post. Keep going!

  25. 25

    After examining the article, I’m not sure how you interpreted that report to say “In a study by the Foresee Institute, researchers found out that only 49% of Internet users in the US are willing to use native online payment methods like PayPal and Google Checkout.”.

    Any comment from author?

  26. 26

    бассейн

    May 6, 2009 3:50 am

    Great tips and very interesting article.

  27. 27

    I live on a small island in the Caribbean (St. Croix, US Virgin Islands) and it is difficult to find things here so I’ve had to develop numerous of off-island resources. Our postal system is the USPS (United States Postal Service) and Priority Mail works just fine.

    It is a huge problem with companies refusing to ship here, and even Amazon won’t ship certain items, and quite frankly I cannot understand why Calphalon cookware is one item they won’t ship. Or shipping here is very expensive as they falsely believe it is International Shipping.

  28. 28

    Great tips, I would like a few more articles along these lines. I look forward to the next two!

  29. 29

    Great article. From my experience doing landing page optimization and other testing, I find that relevance and credibility factors almost always help. The only times they might detract from the page is if you’re providing too much information and crowding out more important content.

    In regards to the shipping cost, it is something I would definitely test. (I would also test the other factors above, but this would be higher on my priority list.) Playing with price, which is what shipping amounts to, is always an ROI exercise. Will you lose people by showing the shipping amount? How much revenue will you gain by offering free shipping?

    Any other offers (free widgets, $ off) should be treated the same way as free shipping. They probably will boost your sales, but it should be a/b split or multivariate tested to see if it makes sense in terms of ROI.

    On a different note, I see that SEO is winning in the poll. Think about this, is it easier for you to get 50% more traffic or 50% more people to convert? Getting 50% more traffic is the same as moving from a 3% conversion rate to a 4.5% conversion rate. I typically find that it’s easier to increase conversions than to drive more traffic. There are many resources on SEO and on how to drive traffic to your site, but less on what to do once they get there.

    Conversion marketing is not just usability and creative web design, although they do overlap.

    Keep up the good articles!

  30. 30

    Michael Chacon

    May 6, 2009 10:25 am

    You guys are doing a great job of staying relevant! Seriously, seems like you always have what I’m looking for

    Thanks again

  31. 31

    Robert - PPC-Maverick

    May 7, 2009 8:17 am

    Great article! I’m absolutely shocked by the evidence that only 49% of Internet users in the US are willing to use native online payment methods. This is almost unbelievable.

    However, I think this also depends a lot on the demographics and psychographics of your market & will vary quite a lot between different audiences.

  32. 32

    Excellent article, and a great overview of some of the points you may not think about. Looking forward to the next installment!

  33. 33

    conversion rate optimization

    June 5, 2010 4:58 pm

    There are two principal approaches used to achieve multivariate testing on websites. One being Page Tagging

  34. 34

    Nice article, but it will focusing on the product based promotion, but I am targeting serviced based promotion please let me know.

  35. 35

    Excellent article.

    One thing about free shipping, make sure to protect your margins but incorporating the shipping cost in the product price. If you don’t—and depending on your product—you could eat away your profit and business.

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