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A man walks into a bar. He orders a steak.

The steak is perfect. In fact, it’s the best steak he’s ever had. It is exquisitely cooked, served with the best side dishes he’s ever tasted. He Instagrams almost every bite.

The next day at work, he tells his coworkers about the amazing meal he had last night. He shows them his photos. He raves about the restaurant and encourages them to go as soon as possible.

Why we share

The man in our story felt the need to share his experience, not because of money, he wasn’t getting paid for making a referral, but because of the same urge that all of us are hardwired to obey. People share to exchange value with their networks.

According to a New York Times study on the psychology of sharing, sharing is innate. It’s human nature. A few noteworthy stats from the study:

psychology of sharing

While the reasons for why we share or who we share with vary from person to person, one thing doesn’t change — humans like to share value with our network. If we find something amazing, we want to tell others about it.

This social sharing behavior has a massive commercial impact — a McKinsey study found that word-of-mouth referrals influence up to half of all purchase decisions.

As marketers, knowing how to catalyze this referral behavior can have a massive impact on our business. To do so, we need to to get two components right:

  1. The Psychology: What makes a product share-worthy? What psychological triggers do we need to hit? How can we hook onto those and amplify them?
  2. The Technology: How can we use data and technology to simplify the referral process? What barriers can we remove?

Let’s look at a few examples of how this plays out in real-life.

Dropbox

Dropbox is one of the all-time success stories for referral programs, and for good reason. They nailed the balance of psychology and the tech.

dropbox

The Psychology
They have a product people care about. Dropbox inspires people to share by solving a painful problem. Combine that with a best-in-class product and a delightful user experience, it’s not hard to see why the Dropbox referral program was instrumental in growing their userbase 40X in one year

The Technology
Dropbox provides a textbook example on how to make sharing effortless.

  1. They make it a no-brainer by incentivizing with value: you and a friend get additional space when you make a successful referral. The product actually becomes more useful when you refer a friend.
  2. The referral process is a natural part of the product. Every user gets asked to invite their friends to Dropbox, and all they have to do is type in friends’ email addresses. Dead simple.

dropbox2

Takeaways

  • A referral program alone won’t get users to share your product. Your product has to solve a painful problem that the customer would naturally want to talk about even without the incentive.
  • Once you have a great product, make referrals as natural and effortless as possible.

Greats

Greats can be described as the “Warby Parker of men’s footwear” — offering designer footwear at significantly lower prices thanks to an online-only distribution model. 40% of all people who purchase Greats Brand shoes share that purchase decision on a social network.

greats

The Psychology
Why are Greats’ customers so willing to share their purchase with friends? This is in part due to the high quality of their shoes; they’re made in the same factories as couture brands like Balenciaga and Lanvin.

The crux is to find something unique to your brand’s story that makes you remarkable. And it doesn’t always have to be about the pedigree of your goods; maybe it’s the quality of service you provide or your ability to beat anyone’s price.

The Technology
What Greats does particularly well is give their referral program so much visibility. Every page on their store has a prompt to refer a friend:

greats2

In addition, they’ve made it so that anyone can get a referral bonus. Most ecommerce stores only offer referral incentives to customers, but Greats opens it up to everyone, so that even window shoppers become potential promoters to their store.

Takeaways

  • Don’t just give your customers a product worth talking about, give them a story they can get behind.
  • Reward everyone who is promoting your brand.

You Need A Budget

You’ll find referrals aren’t limited to industry-changing products like Dropbox, or chic fashion products like Greats shoes. You Need a Budget excels at getting their customers to share how they are using the product to gain financial control.

Lifehacker rated You Need A Budget the best personal finance software, ahead of Mint and Quicken, entrenched competitors with much deeper pockets. You Need A Budget is proof that a product can come late to the party and still succeed, as long as it delivers a best-in-class, share-worthy experience.

budget

The Psychology
You Need a Budget users are, not surprisingly, budget-conscious consumers. The offer at the core of its referral program, an exact dollar amount, is designed to appeal to the spend-thrift and also encourage that person to share You Need a Budget with other spend-thrifts.

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The Technology
Like Dropbox, You Need a Budget makes sharing a standard part of the onboarding process. Every new user gets a unique link that they can use to refer friends.

Takeaways:

  • Align your referral incentive with something that intrinsically appeals to your users.
  • Build the referral into the onboarding process.

Putting this to work for your business

We started off this post with a man eating a great steak. But a caveman finding an awesome patch of berries would’ve also had the same reaction, wanting to tell his tribe of his discovery.

Getting your customers to share and spread the word about you isn’t just for fancy software or designer shoes — word of mouth referrals have been happening for thousands of years. It’s up to you to leverage this innate human desire and turn it into business growth.

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In spite of all the new social networks, instant messaging tools, and mobile apps, email continues to grow in influence as a sales channel. Consider the following:

However, in spite of email’s effectiveness many marketers continue to overlook ways to take full advantage of the opportunity email marketing presents. For example, 83% of marketers aren’t tracking and measuring campaigns, and only 17% are driving email list growth.

There’s no sign that email is going to stop being effective, but marketers need to upgrade the way they execute their campaigns if they want to take full advantage of the opportunity email marketing offers. Here’s how:

Get the basics right

Testing is a vital component to keeping your email marketing strategy ahead of changing consumer behavior. Subject line testing is a simple way to glean insights into open rates and learn what language resonates with your customers, and small tweaks can often lead to big results. MarketingExperiments did a test with subject lines. They found just by changing and testing words they were able to get a 125.9% higher click through rate.

A comprehensive study on subject lines by Retention Science, looking at 267 emails across 543 campaigns during a 6 month period, uncovered a lot of useful actionable tips for marketing and e-commerce professionals.

  • Keep it short. Most emails (52%) have subject lines in the 11-15 word range. The most successful are in the 6 to 10 word range, with a 21% higher open rate.
  • Make it personal. Including a customer first name gets their attention. It also produced a 2.6% higher click through rate, according to the same survey.
  • Not Every Week Needs a Sale. Most flash sales (think Groupon) emails fair pretty badly. It might be due to the long subject lines (20 words) or high frequency (4 – 8 times weekly, compared to 2 – 4 at most for other brands); but either way, constantly bombarding customers with “Sales!” doesn’t increase conversion rates.

Pay attention to deliverability

Too often we overlook the most obvious opportunities. Turns out lots of brands with big lists are leaving large sums of money on the table due to deliverability issues. A study by Return Path found that 12% of emails go missing and 7% end in spam folders.

That’s nearly twenty percent of your emails. Cutting that number in half will give your email campaigns a 10% boost. There are numerous solutions to these issues, such as purging lists after the first hard bounce, after several soft bounces, after emails go unopened for a while, or using a double opt-in (also known as “confirmed opt-in”), rather than a single opt-in, as ISP’s give these email lists priority. These are just a few of the ways you can use to ensure emails are delivered consistently – there are dozens of others.

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Design for mobile

Since Q1 in 2011, the number of email opens on mobile devices has increased 180%. Yet, at the start of 2014 only 22% of marketers surveyed worldwide were using mobile-optimized templates. Hosting provider, BlueHornet, found that 70% of consumers delete emails that don’t render well on a phone, and even if the email does render then 61% will give up on trying to buy an item if a mobile store can’t be accessed on their phone. Even worse, according to the Google Mobile Ad Blog, 40% will go to a competitor to buy a similar item.

Mobile email optimization tactics range in complexity based on your marketing goals, but even basic tweaks such as reducing text length, increasing font size, and narrowing templates can make an impact. For example, Silverpop performed an A/B test for a client using mobile-optimized versus non optimized email which resulted in a 64% higher CTR on the version that was optimized for font size and template width and touch.

Email marketing is well worth investing in. Keeping track of returned emails or those which go into spam is also a lot more achievable than crossing your fingers hoping that Facebook won’t change its algorithms. Make your subject lines so enticing that customers have to open, then make the content interesting enough to click through. Once you’ve got them this far then its all down to the products, images, copy and design of your ecommerce store.

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Compared to A/B and multivariate tests, customer journey analysis is the new kid on the conversion rate optimization (CRO) block. The power of customer journey analysis is that it looks beyond an individual landing page, headline, or call-to-action. Instead, it takes into consideration the entire conversion path —  from website visit to purchase.

In this article, we’ll walk through how to decode visitor behavior and use site search to improve the customer journey. So, if you’ve already got the basics of CRO figured out, get ready to take your optimization efforts to the next level.

Understanding pre-purchase behavior

There are three primary conversion paths that customers follow pre-purchase:

  1. Use filters and categories to find a specific product
  2. Search for a specific product
  3. Browse categories until they find a product to investigate and buy

When you think about it, this isn’t really much different from the experience one would have at a brick-and-mortar store. Imagine that you drop by a convenience store to purchase toothpaste. Likely, the first thing you’ll do is scan the signage to find the location where it would be (filter and categories). If that doesn’t work, you’ll ask a store associate (search). Or, if you walk into the store not knowing what you’re after, you’ll casually browse the store.

While asking the store associate is a clear buying signal offline, most online stores don’t treat this signal the same. This is a mistake. Site search indicates that customers are on a high-intent journey, but just how high-intent? Take a look at the data below:

conversion_rate_for_site_searchers

Here’s a table to break this down further:

 

Conversion rate:
Fashion
Conversion rate:  Electronics Conversion rate: Home & garden
Visits with Site Search 11.37% 6.75% 8.56%
Visits without Site Search 1.85% 1.21% 0.67%
Difference between them 6.1 X 5.6X 12.8X

* the data for each category is an average based on 5 different e-commerce websites from Europe

On average, visitors that used site search were 8x more likely to complete a purchase.

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How site search fits into the customer journey

There are a few reasons why site search is so powerful:

  • Visitors are impatient. Imagine if you walk into a store and know exactly what you want. You might attempt to find it on your own, but if a store associate is there to greet you and offer help, you’ll just ask them instead!
  • It is in our web DNA to search when we want something. Google is responsible for beginning almost 44% of all US e-commerce transactions in Q1 2014.
  • Visitors who search are highly motivated. Visitors searching for a specific product aren’t interested in browsing. They know what they want and are interested in closing the sale quickly.

On average, visitors that use site search are 8x more likely to complete a purchase. http://ow.ly/E7spK

4 tactics to increase conversion rate by understanding the customer journey

  1. Implement an outstanding site search tool. While plenty of ecommerce stores build search technology in-house, there’s no reason that you need to. There are excellent third party tools that can help with increasing search conversion. Once you have tool in place, I recommend that you run A/B tests on the results pages to figure the highest converting design and copy.
  2. Make the search bar visible. Use A/B testing to determine the best position and appearance for the search bar. Don’t leave it to chance! You want to make it as easy as possible for high-intent shoppers to find what they want.
  3. Use smart filtering methods. Usually, the type of shopper using filters is looking for product categories rather than specific products, but they are still showing higher-intent than a casual browser.
  4. Re-engage the non-searchers. Once you validate the hypothesis that shoppers who use site search convert at a higher rate than those who don’t, you can encourage the “non-searchers” to adopt this type of behavior. You want to influence your website’s visitors to choose the conversion path that is generating revenue for your business.

One example of how we did this at Marketizator was to use a pop-up to guide non-searchers toward increased personalization:

Marketizator_popup_tinaR

This pop-up, which asked visitors for their dress size, acted as a filter pushing visitors toward more personalized results. This tactic generated a 50% increase in revenue on a specific product category! It succeeded in encouraging non-searchers to adopt higher-converting searching behaviors.

To succeed in ecommerce, you need to stand out from the crowd, but this doesn’t always mean doing something that’s far outside of the ordinary. Differentiation starts by looking at the data, understanding your customer journey, and testing your hypotheses. Once validated, the methodology used to identify a winning conversion path can be used to further personalize the experience for specific customer segments.

warehouse

What kind of Order Management System (OMS) are you running? If that question got you scratching your head as to why your ecommerce business needs an OMS or at what point an OMS makes sense for your business, or even what exactly an OMS does, read on.

At a high level, an OMS increases your efficiency by streamlining your business workflows and improving your operations. It does this in a few key ways:

  • Ensuring you ship orders promptly and correctly
  • Adjusting inventory accurately
  • Managing back-orders
  • Making shipping statuses visible and easily accessible
  • Improving your ability to respond to customer inquiries with accurate, up-to-date data

Delays and mistakes in any part of the process can destroy your business and your reputation. You need to get it right every single time. This is easy to do when you’re small, but as your business grows you’ll find that relying on manual processes or technology that isn’t designed for order management has limitations that will impede your ability to compete.

Here are five common signs that indicate your business is in need of an OMS:

1. Growing number of sales channels.

Your business started with your own website and now has grown two different websites and selling on Amazon, eBay, Newegg, and other marketplaces. In addition, you’re considering opening up a small storefront at your warehouse. If the number of systems containing your orders are multiplying and there is no central system in place to manage inventory, orders, and customer service — it may be time to look at an OMS. Depending on the complexities of your operation, volume and the workflow around order fulfillment, an OMS could prove useful with only one channel. Typically, companies start investigating OMS solutions when they are looking to add a second or third sales channel.

2. Too many mistakes in data entry, shipping, purchasing, invoicing, and accounting.

As a company grows in size, revenue or SKU count, its complexity increases, and so do the chances for making mistakes. An OMS can cut down on the paperwork and manual process by automatically syncing orders and inventory across all channels into one central location.

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3. Trouble keeping up with customer demand

Timeliness is essential for order processing and good customer service. Are employees spending more time chasing down information about fulfilled orders than handling new ones? If the sales volume is getting to a point where there aren’t enough hours to handle the day’s orders, consider an OMS. You can automate screening for fraud, make sure everything is in stock, generate a PO to a supplier for replenishment and more — and all of this happens automatically. Some additional signs that demand is surpassing your operational capacity that an OMS can solve include:

  • Your staff has to work overtime to get a day’s orders out the door
  • You do not start packing orders until mid-afternoon because you’re manually reviewing orders
  • Customer service team spends more time looking for order information than helping customer resolve the problem

4. Too many inventory surprises

Running out of stock, or worse yet, not knowing you are out of stock, can lead to lost revenue. On the other hand, purchasing too much merchandise ties up funds and increases the risk of losing money on unsold goods. An OMS can provide full visibility into stock levels and sales history, generate forecasts, and automate re-orders to suppliers.

In the case of Too Fast Apparel, they quickly realized that more orders meant more inventory, order processing, and shipping. The manual processes they used to run their business could no longer scale. An OMS helped them meet the challenge of finding the right balance between minimizing operational costs and maximizing customer service and satisfaction.

5. Increasing staffing costs

Is your staff working more days and longer hours because your sales are growing? Compare the cost of an order management system designed and priced for your company versus additional time staff is spending on manual processes. An order management system may be a lot less expensive.

If any of the above situations sound like something going on inside your business, it’s time for you to look into an order management system. Look for a system that will automatically route an order to the best source to fulfill each line item, prioritize backorders, seamlessly notify customers of delivery time and, most importantly, address exceptions in the processes. If you choose the right system, you will see a significant improvement in workflow and efficiency, decreased order costs, reduced inventory costs, and a marked decrease in fulfillment errors.

For more details, download this free whitepaper on how to choose an order management system.

ideas

Social channels still lag behind email marketing, SEM, and SEO as drivers of ecommerce traffic and sales, but it’s a rookie mistake to leave these channels out of your marketing plans. Last year, slice-1NoMoreRack, one of the fastest growing ecommerce retailers in the U.S. increased their holiday sales 165%, in large part by investing in and optimizing their Facebook ad campaigns.

Facebook has evolved from a scrappy networking platform to an advertising giant. Today it offers a googol ways to target customers, and other social channels are following its lead. Instagram, Pinterest, and others are rolling out ever more sophisticated tools for ecommerce marketers to use in their customer acquisition efforts. With these new changes and opportunities, it’s no surprise that the majority of marketers are willing to increase their spend on social channels.

As you’re thinking about the coming holiday season, and beyond to 2015, here are four social media tools that every commerce marketer should have on their radar. Start testing them today, and you’ll be ready to master them tomorrow.

Twitter Buy Button

Launched just a few weeks ago, Twitter is taking the lead with its “Buy” button. The first true, in-channel ecommerce tool is only available to a very small group right now and only for limited time items like event tickets and special run t-shirts. Right now, you can see it in use by Fancy (@fancy), Gumroad (@gumroad), Musictoday (@Musictoday) and Stripe (@stripe).

slice-2

Eventually, Twitter hopes to prove its ecommerce value in direct sales. Of course, there are challenges to integrating it with inventory management systems and ecommerce platforms, but as its Twitter Cards (see #4) have proven, integration is something well within the team’s development capabilities.

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Rich Pins

The ladies love Pinterest and so do marketers. According to Shopify, Pinterest is second only to Twitter in driving traffic to stores and the average purchase is higher by $12.

Experian’s recent study found the same: Pinterest drives traffic. “As of March 2014, social media sites now account for 7.72% of all traffic to retail websites, up from 6.59% in March 2013. Further, Pinterest, more than Facebook or YouTube, is supplying the greatest percentage of downstream traffic to retail sites.”

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So what’s the best practice for ecommerce companies? Use Rich Pins for Products.

  • First, make sure you have a business page, not a personal page. Not only do you get access to Rich Pins, but you also get a plethora of data to give you insights into your Pinterest efforts.
  • Second, use Rich Pins when you enter pricing for your products. Pinterest will alert pinners to let them know if the price has been reduced. To help you make the decision of what to put on sale, Pinterest shows you which pins have gotten the most traffic, repins, etc. Getting that traffic depends on keyword-accurate descriptions of your pins, strategic use of hashtags, and promotion of your Pinterest page via email marketing, website, and other social networks. Here are some other reasons to get Pinterest for business.

NOTE: Pinterest does not allow for tagged links but it does a pretty good job of getting credit for referral traffic in Google Analytics.

Instagram

I love Instagram. Send me all the selfies, puppy photos, and food porn you’d like. It’s a great way to spend a subway ride or waste time waiting for the doctor. As a marketer, though, it makes me crazy. Instagram is the last to the native data party and it doesn’t enable linking in posts, making it challenging to directly point to traffic or sales from Instagram. However, it’s a perfect platform for ecommerce because it’s hyper-mobile and image-based.

Some brands, like Fox and Fawn, have figured out how to turn Instagram into an ecommerce platform. Interested users sign up in advance and give the company their names, Instagram handles, and credit cards to have on file. When it posts a new product, the first person to comment with “Ring me up!” purchases the item. The company confirms the purchase and sends an email. On a rainy day, Fox and Fawn can see 40 percent of its daily sales from Instagram. Of course, tracking the sale requires a field in its POS system to demarcate Instagram as the source, and the salesperson must manually include the information.

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Twitter Cards

We know email is a major driver of ecommerce sales, so many companies are working on collecting more email addresses. Social media, Twitter in particular, can be very effective at this. One of the most underrated tools is Twitter’s lead gen card. It’s an interactive image and has high, customizable button to go along with a tweet. If users see something they want, they click the button to indicate interest which tells Twitter to share their email addresses with the company. The email address can be automatically transferred to any of the integrated email marketing tools which can then immediately trigger an outbound email.

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Don’t Just Do It

The challenge of social media today is many people think their 11 year-olds can do it. Sure, they may know how to choose an Instagram filter, but it’s unlikely that they have an understanding of how to drive likely-to-purchase traffic and increase the total lifetime value of a customer using social platforms. That’s best left to professionals. You know your audience best and what works for them, apply that knowledge to the tools listed above, and take a chance to better your business.

RailingGuy

There’s a scene in the movie “The Wolf of Wall Street” where Jordan Belfort, played by Leonardo DiCaprio, asks his friend to sell him a pen. In the movie, the friend answers with something about supply and demand.

sellpen

The real Jordan Belfort, who the movie is based on, says the actual answer is different.

“The real answer is, before I’m even going to sell a pen to anybody, I need to know about the person, I want to know what their needs are, what kind of pens do they use, do they use a pen?”

This applies to any product. If you want people to visit your ecommerce store and buy from you, you need to know about them. You need to know their needs, goals, motivations and objections to buying your product. In short, you need to know your customer personas.

Your customer personas should look and sound like real people. http://ow.ly/AJyAS

What is a customer persona?

Let’s clear a few things up first. A customer persona isn’t an actual person, and shouldn’t be based off of any one single customer. It’s a model that represents your customers, or a group of customers. The model may even look like and sound like a real person. If you have multiple customer segments, you can create a corresponding persona and assign fictional names to each.

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Secondly, while this model might be fictional, it’s definitely not derived from fiction. The model is constructed from real and complete data about your customers. It does not contain any conjecture or information about who you want your customers to be.

Typically, apart from a name, a persona contains information about customer demographics, such as age range, gender, employment, income and location. It also captures their goals, needs or wants, challenges and objections as related to your business.

You might want to add information about your customers’ online behaviors, like the sites they visit, their social network activity, how they found your site, and what they look for when buying online.

BigHats

Finally, every aspect of your customer persona should have a purpose. For example, collecting information about their eating habits is useless unless your product is somehow related to food.

The point of the buyer persona is to give you an insight into the goals, motivations and behaviors of your customers. Each aspect of the persona should contribute to that in some way.

Here’s an example from Goodbye Crutches. It’s not very detailed, but it has essential information needed for them to market their products to this customer type:

GoodbyeCrutches

Goodbye Crutches now knows it has to focus on online marketing and concentrate on spreading useful information and resources that will ease customers’ fears. They can’t directly push products onto consumers. They need to help them first before making the sale.

Developing Your Customer Personas: Qualitative Data

Most of the data you collect for your customer personas will have to come from qualitative research. That means communicating with your customers in some way and asking them questions about their goals and needs.

There are many ways you can do this:

One-on-one

Try to get customers to sit with you in the same room or video chat with you. This way you’ll also pick up on visual cues when your customers answer your questions. If in-person interviews aren’t possible, a phone call is a good alternative.

The best thing about a one-on-one interview is that you can change it if you need to. It becomes dynamic, like a conversation. So instead of asking questions that customers have already answered, you can dig deeper and find out more.

You can also cover a lot in one sitting because talking is the fastest mode of communication. Focus on subjective and open-ended questions, like finding out what drives them, what their objections to buying are, and how you can help them.

Email

You can send questionnaires and surveys to customers after they subscribe. While not as effective as one-on-ones, it’s more convenient. It allows customers to reply when they have some free time.

You can also survey subscribers based on their buyer journey. For example, you might want to ask subscribers who haven’t bought anything what they are looking for and what’s holding them back from buying. For customers who just bought something, you can ask them why they bought from you and how your products satisfy their needs.

The problem with email is that people tend to ignore them until later, and most often they end up forgetting. To ensure that customers answer your surveys, you can do two things.

First, give them an incentive to answer your survey. Discounts and coupons are popular choices because they help customers save, and also make them shop with you again to take advantage of the deal.

Second, try not to make the survey too long. If customers see a long list of questions, they assume it’ll take a long time to answer and they’ll ignore it. Keep it short and don’t add too many open-ended questions.

On-site

On-site surveys, when done correctly, can provide some extremely relevant insights. They are presented to customers while they are browsing your site, so the timing is perfect.

Survey

You can trigger these surveys based on the page customers are looking at, or a number of other events. You can even trigger them as customers are leaving your site and ask them whether they found what they were looking for.

Because of their nature, pop-up surveys are best suited to multiple-choice questions. There’s not much real estate to play with if you pose open-ended questions.

Again, to incentivize visitors to answer your surveys, give them an on-the-spot discount.

Try to collect as many data points as you can. Remember, a persona doesn’t represent just one customer. After a certain point, you’ll find a pattern in your qualitative data.

A Real-Life Example

When Whirlpool started creating customer personas, they found four main personas and four secondary personas. The four main personas were purchasers under duress (someone who needed a refrigerator immediately), planned remodelers, new owners and owners with repair.

When conducting their interviews, they tried to understand the mindset that each customer had when visiting their website. It was important to find out what triggered them to visit the Whirlpool site and what kind of solution they were looking for.

All this information was included when they created the personas, along with ages, names, occupations and incomes. They also added pictures of real people to help their marketing visualize the personas.

You’ll notice that Whirlpool also used website statistics to help them with their persona creation. Let’s see why this is important.

Developing Your Customer Personas: Quantitative Data

While you can create customer personas solely through qualitative research, adding some quantitative data will help you strengthen them. After all, data doesn’t lie!

CorrectSegment

Another advantage is that you can collect way more information with quantitative data than you can with qualitative. While many customers may ignore your survey requests, a good analytics solution can help you track online behaviors of every single customer.

Your analytics solution will also help you close the loop with your personas. Qualitative data helps you create the personas, but quantitative data helps you make use of them. We’ll come to that in the next section, but for now here are some metrics to track:

Demographics

Your analytics app can give you a much better view of customer demographics because of the number of data points it collects. Find out where your customers are coming from, what device or browser they use, and when they typically browse your store.

This means you don’t need to waste time asking customers where they are when you interview them. Use that time to find out the things that your analytics software can’t.

Traffic source

Your acquisition channels will help you understand why customers came to your site in the first place. Were they actively searching on Google or did they come from an ad? Did they see a review of your product online or did a friend refer them?

If they came via a search engine, you can also track the keywords they used to find you. This will give you an insight into what your customers value. Bargain hunters will use words like “cheap” while those who care about performance will use “best”.

During your qualitative research you might have noticed a pattern in the phrases and terms your customers use. Tying that in with your search engine data will show you which terms are most significant.

To develop customer personas, look for patterns in the phrases and terms your customers use. http://ow.ly/AJyAS

Customer Journey

The customer journey through your site is important too. What pages do they visit and how long do they spend on each page? How your customers navigate your site tells a story and helps you differentiate between segments.

The segment that visits your “About” and “FAQ” pages are probably very early in the buyer cycle. They want to get to know your company better and aren’t ready to buy from you just yet.

The segment visiting your blog are now considering your products and want to find more information. They are a little further along the cycle, but still not quite ready to buy.

Finally, the group spending a lot of time on your product pages is probably ready to buy. Something might be holding them back, so look through your qualitative data to find out what it is.

The flow will also tell you where customers are leaving your site. Are they dropping out at the product page or another page? This can give you insights into how your customers behave at key conversion points.

Customer Lifetime Value

You should be tracking customer lifetime value already. It’s one of your most important metrics and can help you identify which are your most profitable personas. These are the people you want to spend more time crafting offers for, as they have a higher likelihood of converting.

Putting Your Customer Personas to Work

Now that you’re created your customer personas and boosted them with quantitative data, it’s time to actually put them to some use. At the end of the day, you want to increase conversion rates and make more sales.

Here are some applications of customer personas:

Website

You can now craft a user experience on your site that speaks directly to each persona. No more generic content that makes customers feel like you don’t have the answers they’re looking for.

We’ve already seen how Whirlpool created their personas, so now it’s time to look at how they used them. Their problem was that their website was too generic, so they decided to redesign around their personas.

They created functionalities that catered to each persona. The duress purchaser needs to buy something quickly, so they implemented a filtering feature to help customers identify the best product for them in as little time as possible.

The remodeler, on the other hand, likes to take time in making a decision, so they created a showroom feature that allows customers to explore products at length. They also added a feature that allows remodelers to email products to other people involved in the remodeling.

The new redesign increased page-views by 42% and decreased bounce rates by 10%.

Product copy

When it comes to ecommerce conversion rates, product copy is one of the most important factors. It’s your sales pitch, the last thing a customer reads before clicking the “Buy Now” button.

While creating their personas, Leo Schachter Diamonds focused on the motivations and psychology behind their customers’ purchases. This helped them created targeted copy that answered questions their personas had.

This strategy helped them pre-empt any objections customers had to buying diamonds from them. Before this strategy was implemented, only 0.86% of all site visitors would go on to find a jeweler who sold Leo Diamonds. Now, because the copy solves their needs, 54% of them go on to find jewelers. That’s an increase of 5,500% in conversion rates!

Content Marketing

Now that you know your customers’ needs and requirements, you can create blog posts and other content that is relevant to them. This will attract more qualified leads with a higher chance of converting to customers.

After Skytap identified their personas, they were able to create targeted blog posts that impressed visitors. The relevancy of their content increased their organic search traffic by 55% and converted 124% more visitors into leads.

Collegis Education repurposed their content to create a targeted email campaign for subscribers. They segmented subscribers according to persona and sent them high-level content to help them solve their pain points. This resulted in an increase of 28% in open rates and 7% in conversion rates.

Advertisements

Your personas give you an idea of the language your customers use and the websites they frequent. Use this to optimize your PPC campaigns.

In Google AdWords, use the same keywords that customers use to make your ads more relevant. Your ad click-through rates will improve.

You can place your banner ads on websites that your customers visit. Again, use language that they identify with to increase your click-through rates.

Apple typically creates ads geared towards consumers, but as their products started gaining traction in businesses they wanted to include this new persona as well. In this iPad 2 ad, you can see them highlighting applications to view the stock market and make presentations.

A Tool to Understand Your Customers

If you find that consumers are not responding to your content or your offers, and that your website conversion rates are low, it means you don’t understand your customers. Use the customer persona as a tool to find out what their needs are and how you can better address them.

Have you started creating your customer personas? How many do you have?

ab-testing

Good data analysis is the search for cause: attempting to uncover why something happened. Traffic to the website is low—why? Our email click through rate is improving—is it because we recently redesigned our email template, or because we’re focusing on more direct calls to action? The best way to find these answers is to rely on the same approach that scientists have used for centuries—experimentation.

As technologist Scott Brinker advises: “Experimentation is the gold standard of causation.” A thoughtfully crafted experiment allows you to zero in on the variables that influence your data. Instead of retroactively analyzing your data, you isolate your assumption and design an experiment that will allow you to test it. These tests start with a hypothesis.

State your hypothesis

A hypothesis is a predictive statement, not an open-ended question. A good A/B testing ahypothesis will invite you, through research, to identify a potential solution. Let’s look an example of an experiment that RJMetrics ran on their website.

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In a pricing page experiment, RJMetrics’ hypothesis was informed by qualitative data on how visitors were interacting with the web page. They used Crazy Egg to produce a heat map that showed high and low-activity parts of the page:

Screen Shot 2014-02-06 at 2.13.03 PM

Stephanie Liu, front-end developer at RJMetrics and Optimizely’s Testing Hero of the Year, crafted the following hypothesis:

My hypothesis was that moving the button into the white hot scroll map area would cause the design to have a higher conversion rate as compared to the original pricing page. More people would pay attention to the button simply because their eyes would be lingering there longer.

Here’s her original version:

Pricing_variation1a

Here’s her variation:

pricing_variation1b

Stephanie’s experiment proved her hypothesis to be correct, and her improved pricing page resulted in a 310% improvement in conversions on the pricing page—a staggering win, due to diligent use of data and a well-formed hypothesis.

The Inspectable Elements of a Hypothesis

Let’s boil down a hypothesis to its individual components. Data fits into the hypothesis framework in a number of areas.

If _____[Variable] _____, then _____[Result]_____ [Rationale].”

The Variable: A website element that can be modified, added, or taken away to produce a desired outcome.

Use data to isolate a variable on your website that will have an impact on your performance goals. Will you test a call to action, visual media, messaging, forms, or other functionality? Website analytics can help to zero in on low-performing pages in your website funnels.

Result: The predicted outcome. (More email sign-ups, clicks on a call to action, or another KPI or metric you are trying to affect.)

Use data here to determine what you’re hoping to accomplish. How large is the improvement that you’re hoping for? What is your baseline that you’ll measure against? How much traffic will you need to run an A/B test?

Rationale: Demonstrate that you have informed your hypothesis with research: what do you know about your visitors from your qualitative and quantitative research that indicates your hypothesis is correct?

Use data here to inform your prediction: quantitative insights can be very helpful in formulating the “why.” Your understanding of your customer’s intent and frustration can be enhanced with an array of tools like surveys, heat maps (as seen above), and user testing to determine how visitors interact with your website or product.

Strengthening your Hypothesis

Not all hypotheses are created equal. To ensure that your hypothesis is well-composed and actionable, use a few of the following tips. Here are some examples of strong and weak hypotheses:

Strong Hypothesis Weak Hypothesis
“If the call-to-action text is changed to “Complete My Order,” the conversion rates in the checkout will increase, because the copy is more specific and personalized.”

This hypothesis is strong because of its specific variable to modify (CTA text) and rationale, which indicates an understanding of the audience for the page.
“If the call-to-action is shorter, the conversion rate will increase.”

This hypothesis is weak because it is very general, and does not include a rationale for why the proposed change would produce an improvement. What would be learned if this hypothesie
“If the navigation is removed from checkout pages, the conversion rate on each step will increase because our website analytics shows portions of our traffic drop out of the funnel by clicking on these links.”

This hypothesis is strong because it is supported by website analytics data that highlight a high-impact opportunity for streamlining the checkout process.
“If the checkout funnel is shortened to fewer pages, the checkout completion rate will increase.”

This hypothesis is weak because it is based on the assumption that a shorter process is better, but does not include any qualitative or quantitative data to support the prediction.

A strong hypothesis is:

Testable. Can you take action on the statement and test it? Keep your predictions within the scope of what can be acted upon. Avoid pulling multiple variables into the statement—a more complex hypothesis makes causation more difficult to detect. For instance, don’t change copy on multiple parts of a landing page simultaneously.

A learning opportunity, regardless of outcome. Not every experiment produces an increase in performance, even with a strong hypothesis. Everything you learn through testing is a win, even if all it does is inform future hypotheses.

That brings us to our next tips for using hypotheses:

Hypothesize for every outcome. One of our solutions partners, Blue Acorn, mentioned a hypothesis best practice that we think is fantastic. To ensure that every experiment is a learning opportunity, think one step ahead of your experiment. What would you learn if your hypothesis is proven correct or incorrect in the case of a variation winning, losing, or a draw?

Build data into your rationale. You should never be testing just for the sake of testing. Every visitor to your website is a learning opportunity, this is a valuable resource that shouldn’t be wasted. RJMetrics recently wrote a tutorial on how to use data to choose and prioritize your tests, you can check it on the Optimizely blog.

Map your experiment outcomes to a high-level goal. If you’re doing a good job choosing tests based on data and prioritizing them for impact, then this step should be easy. You want to make sure that the experiment will produce a meaningful result that helps grow your business. What are your company-wide goals and KPIs? Increasing order value, building a revenue stream from existing customers, or building your brand on social media? If your experiments and hypotheses are oriented towards improving these metrics, you’ll be able to focus your team on delving into your data and building out many strong experiments.

Document your hypotheses. Many website optimization experts document all of the experiments they run on their websites and products. This habit helps to ensure that historical hypotheses serve as a reference for future experiments, and provide a forum for documenting and sharing the context for all tests, past, present, and future.

Now, Build Your Own

A hypothesis is a requirement for anyone running A/B tests and experiments on their website. When you build your own hypotheses, remember to:

  1. Clearly define the problem you’re trying to solve, or metric you’re looking to improve
  2. Bring quantitative and qualitative data into the hypothesis
  3. Test the hypothesis to strengthen and ensure it is actionable
  4. Look at every experiment as a learning opportunity

If you need some extra help check out our ebook, Building your Company’s Data DNA for more tips on how to build data-driven hypotheses.

mobile-app-changes

Getting found in the iOS app store is a challenge, with more than one million active apps vying for users’ attention. App publishers and developers have a number of obvious marketing tools at their disposal, like advertising and pay-per download, to get more people to notice their mobile apps. But these are costly and not for everyone.

Beyond the obvious advertising tools, the iOS app store has another, often overlooked, way to promote discovery: app price changes. When a publisher or developer lowers the price of a paid app it gets added to Apple and third party RSS feeds that are distributed to thousands of sites and twitter feeds focused only on promoting apps that have gone on sale or have recently become free.

How it works

This marketing tool, more akin to merchandising, requires little to no budget but, according to our analysis of all iOS apps during most of 2013, it has a significant impact on positioning in Apple’s Top Paid and Top Grossing ranks. This directly translates into better visibility, downloads and revenue.

In fact, as can be seen in the graph below, compared to paid apps that never changed their prices, paid apps that made such changes (both increases and decreases) grew the average number of days they were ranked by 21% in Top Paid (+9 days) and 70% in Top Grossing (+16 days). These apps also improved their average rank by 20% in Top Paid (-45 positions) and 19% in Top Grossing (-46 positions). These improvements were not only for the most popular iOS apps, but also for less established new apps and poorly performing apps that have been around for a while.

the impact of price changes vs no change

The number of price changes, whether increases or decreases (including to $0) also matters. 1 or 2 changes during a year provides very limited improvements. But when changes are made once per month (12 total), improved rank and the number of days ranked healthily. Increase that number to 1 per week (52 total) or more and that’s when developers started to see the largest improvements to app ranks and thus downloads.

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Applying this to your app

Here are the key rules that mobile app publishers and developers should follow when developing their price marketing strategy:

Repeat Frequently

All paid apps should look to go on sale, on average, at least once per month. With the corresponding price increase, that makes 24 price changes per year. More experienced app developers and marketers can look to do more to maximize downloads, including intraday changes to target specific countries or types of users, but 1 per month is a good start for most apps.

Allow Settling Time

Price changes can take anywhere from 20 minutes to more than 15 hours to spread throughout iTunes’ storefronts (New Zealand is usually one of the first then it follows time zones to reach European storefronts and the US). In addition, it can take time for users to discover the new price, either directly or through a third party site like AppShopper. So unless you are looking to make multiple price changes a day, which can be rewarding but requires constant attention and/or the right tools, most publishers should let their app’s sale breathe for 48 to 72 hours.

Focus on Down Cycles

Given the cyclical nature of downloads and ranks, price changes should generally not be made when the app is experiencing a growth spurt. Instead, the price change should be timed with an app’s slowing downloads or sagging rank.

React to Competition

If your app is a soccer app at $2.99 and EA’s FIFA 2014 goes from $4.99 to $0.99, you need to react immediately, in order protect your positioning and sales. If this example does not directly apply to you, remember that competitors are not just direct competitors. They may also be apps ranked just above you in your genre or category, or those appearing before you in key searches on iTunes.

Avoid Predictability

Varying the times, days of the week and the amounts of your price changes will avoid predictability that could be gamed by both competitors and users.

Test Often

Every price change should be an opportunity to test a new price and new price steps. That may not always be possible if you are at $0.99 and going free. But even then you should be testing various target prices (the price you go to after a sale). Here are examples of variations in price changes:

  • The price of your app is lowered to varying tiers in 1 or 2 steps (e.g. $3.99 -> $0.99 or $3.99 -> $0.99 -> $0.00)
  • Then the price is increased in 1-3 steps (e.g. $0.99 -> $3.99, $0.99 -> $4.99 -> $3.99, $0.99 -> $1.99 -> $3.99)

Pricing changes are a simple, effective way to get your app in front of people. You can make these changes yourself, or if you’re looking for some extra assistance, talk to us. The Loadown can help you automate this exact type of optimization.

optimize

Always be testing should be the mantra of every ecommerce store. Incremental improvements on your homepage, product page, or click-through-rates have a snowball effect on your bottom line. Today’s guest post is from, Sean Ellis, CEO of Qualaroo and founder of GrowthHackers.com. Sean has held marketing leadership roles with companies including Dropbox, LogMeIn, Uproar, and Eventbrite. He literally wrote the guide to conversion rate optimization. Read on to hear what Sean has to teach you about optimizing conversion rates to find sustainable ecommerce growth.

Growing an ecommerce business is hard. But what if I told you that the answer to your growth challenges is right in front of you? Conversion rate optimization is critical for any business, but none more so than in ecommerce—where each conversion improvement results in immediate improvement in sales.

But CRO can also be a frustrating, fruitless practice, leading many ecommerce managers to abandon it in search of other opportunities for acquiring new visitors. In my experience, CRO is the most powerful lever you have to improve your ROI and overall site performance. It has the ability to turn unprofitable traffic into profit centers, and delivers sustainable growth that compounds itself over time.

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repeat-customers

We talk about repeat purchases a lot on this blog. We talk about it so much that today we’re thrilled to have Nima Patel from Lettuce on our blog to talk about it for us. From the company that makes order management fun, here are two strategies to get more repeat customers.

By now you’ve heard that repeat customers are an incredibly valuable segment for any ecommerce business and should not be ignored. Although that’s easy to understand at a high level, getting your customer base to buy more often isn’t so simple to implement. Monetary and points based rewards programs are standard, but what if we told you today that there were ways to earn deep customer loyalty without having to resort to generic financial incentives?

It’s definitely possible.

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