Conversion Rates
Everything You Know About Conversion Rate Optimization Is Wrong
By Larry Kim
March 17, 2014
Posted In: Conversion Rates
Comments: 17
March 17, 2014
Posted In: Conversion Rates
Comments: 17
Conversion is a key element in your paid search strategy; after
all, if you're not actually turning lookers into buyers at a high rate,
what are you advertising for? Conversion rate optimization enables you
to maximize every cent of your PPC spend by finding that sweet spot that
convinces the maximum percentage of your prospects to take action.
But what is a good conversion rate? If you're already achieving 3%, 5% or even 10% conversion rates, is that as high as you're going to go?
We recently analyzed thousands of AdWords accounts with a combined $3 billion in annual spend and discovered that some advertisers are converting at rates two or three times the average. Do you want to be average, or do you want your account to perform exponentially better than others in your industry?
Through our analysis of this massive amount of data on landing pages and conversion rates, we were able to identify some common traits of the top converting landing pages. What do they have that you don't? Believe it or not, there isn't much standing between you and conversion rates double or triple what you're seeing today. But the way you’re going to get there is totally counter to typical conversion rate optimization wisdom.
In
this post, you'll learn a step-by-step, replicable process for boosting
your conversion rates, all backed by data insights from the best (and
worst) performing advertisers in the market. Our recent conversion rates
webinar is available in full at the end of this post. Today, we'll
cover:
How is everyone getting it so wrong? Primarily, if you're singing the same song as everyone else, you can really never be anything more than average. When all of the gurus are all preaching the same optimizations, and all of your competitors are listening to them, how are you supposed to stand out?
Amazing, right?! Um, no, not really. These are really basic, run-of-the-mill A/B testing best practices.
Yes, you should be doing these optimizations on an ongoing basis, and
you're probably going to see small, single-digit increases in your
conversion rate – but it's not likely to shoot you into the 10% or
greater conversion bucket.
Let me show you what happens with those gains generated by these small tweaks on your page. Here's an example of a landing page split test; the gray line on the bottom is the first page version we were running. The blue line is the second version we ran against it. In the beginning, the new page far outperformed the old. Awesome, right?
Except
as you can see, the gains were not long lasting. In fact, the "better"
page would eventually plateau. We began running 20 to 30 tests at a time
and saw this pattern across our tests. We call this a premature testing dilemma. You see an early lead but shortly down the line, the early lead disappears.
This isn't true all of the time, of course. However, we found that in the majority of cases, small changes like line spacing, font colors, etc. = small gains. If you want big, serious, long-lasting conversion gains, you need to move past these spikes that last only a couple of days or weeks.
Why does this happen? Often, it's because the total volume of conversions you're measuring against are low to start with. If you're looking at 50, 100 or even 200 conversions across your entire test, small changes can seem more impactful than they really are. A couple of conversions might mean a 4% conversion increase if there are only 50 conversions total, because your sample size really isn't big enough to start with.
When it comes to landing page optimization,
you can stay really busy doing small things that have little impact.
It's like rearranging deck chairs on the Titanic. We need to move past
this mentality to the big tactics and optimizations that will
dramatically change your performance and fortune.
First, we need to know:
Conventional wisdom says that a good conversion rate is somewhere around 2% to 5%. If you're sitting at 2%, an improvement to 4% seems like a massive jump. You doubled your conversion rate! Well, congratulations, but you're still stuck in the average performance bucket.
In this analysis, we started with all accounts we can analyze and went back a period of 3 months. We removed those that didn't have conversion tracking set up properly, those with low conversion volumes (<10 conversions/month), and low volume accounts (<100 clicks/month), leaving hundreds of accounts for our analysis. We then plotted where the accounts fit in terms of conversion rate.
So
what is a good conversion rate? About 1/4 of all accounts have less
than 1% conversion rates. The median was 2.35%, but the top 25% of
accounts have twice that – 5.31% - or greater. Check out the far right
red bar – the top 10% of AdWords advertisers have account conversion
rates of 11.45%.
Remember, this isn't for individual landing pages – these advertisers are accomplishing 11.45% conversion and higher across their entire account.
Clearly, this isn't some anomaly; this is perfectly attainable. If you're currently getting 5% conversion rates, you're outperforming 75% of advertisers … but you still have a ton of room to grow!
You
should be shooting for 10%, 20%, or even higher, putting your
conversion rates 3x to 5x higher than the average conversion rate.
Aspire to have these landing page conversion rate unicorns in your
account.
There's
a lot of flux there; e-commerce has a far lower average conversion
rate, especially compared to finance. However, check out the Top 10%
Conversion Rates. They're 3 to 5 times higher than the average for each
industry, so we can see that the rule holds across the board, regardless
of industry.
The flip side, of course, is that if you're in a high-performer industry like finance, 5% really isn't a fantastic conversion rate. If you're comparing yourself to the average across all industries, you're really deluding yourself into thinking you're doing better than you are. In truth, the top 10% are doing almost five times better.
Even if the average conversion rates are lower in your industry, the top advertisers are outperforming you by 3-5x or more.
Here are my top five tips to help you reach landing page unicorn status:
How can you get creative with your offer? In our case, we realized that offering prospects a free trial of WordStream software really wasn't very imaginative or compelling. We had to think outside the box (don't you love that phrase?) and come up with something different and unique; something more tangible and compelling than just sending them to a software trial to find their way around.
What we came up with was our free AdWords Grader,
which actually gives people an account evaluation report, with
recommendations to help them improve their AdWords strategy. This was a
HUGE turning point for us. Prospects loved it and conversions went
through the roof.
So how do you know if your offer stinks? If your conversion rate is stuck at 2% or lower, you're not there yet. But the real way we figured out how our offer stunk was by asking our customers. We added one form field on our landing page form to ask people what they wanted our help with – and it wasn't a free software trial.
Brainstorm, ask your customers, and come up with more unique offers to test. You'll never know which one is the winner until you try some new offers out.
In
the above example, you can see the first landing page version and just
how much information people had to provide before they could download
the software trial. Clearly, this was too much for many prospects. It
was daunting and discouraging – not the kind of user experience you want
on your landing page.
Here
you can see their new landing page iteration, which turned out to be an
exponentially better performer. They've changed the flow so that anyone
can download and install the file. At the last step, the user is asked
to register the software. At this point, they've already spent 10 or 15
minutes with the software and are far more likely to invest the time in
completing the information form.
This was actually so effective that they were overwhelmed with conversions. They ended up backing off slightly and using the registration to find more qualified leads, by asking for the information one week after the download, once their prospects had time to sit and get to know their software. Changing the flow helped them boost conversions, but also manage lead quality in a far more effective way.
Here's another great example, where the advertiser realized their landing page offer didn't necessarily speak to the person who would be performing a search. In their case, a loved one or friend might be seeking help.
This
advertiser decided they would let the visitor choose their own flow.
This was incredibly effective not only for conversion, but also in
segmentation for their remarketing and lead nurturing efforts.
So what's the takeaway here? Find the flow that works best for your prospects and use it to boost conversion rate and qualify your leads.
Check out my post at Moz for a deep dive into this incredibly effective tactic.
Sometimes
you get lucky, but if you want to achieve these top 10% landing pages
across your account, you need to replicate the above steps multiple
times and perform testing on an ongoing basis.
On average, you should be testing four unique landing pages – with varying offers, flow and messaging – to find that one awesome landing page. If you want to find a unicorn landing page – that top 10% page that sees your conversions reaching 3-5x the average – you need to test at least ten landing pages.
Here, we've analyzed an e-commerce account with 1000 unique landing pages. About a third of traffic goes to the top most-trafficked landing page in their account. When we dig deeper, we see that about 80% of traffic goes to just the top 10% of landing pages.
You
don't need to make thousands and thousands of landing pages. You need
to find the top performers you already have and focus your efforts
there. How can you improve their performance? Cut the fat, stop wasting
time on the low performers – in fact, just get rid of them. If you have
just one great landing page, it's smarter to focus your efforts there.
Here's more proof that burning the midnight oil creating dozens or hundreds of landing page variations isn't the best use of your time:
Here,
we've plotted out tens of thousands of accounts by conversion rate vs
unique landing pages. We don't see a strong correlation between
increased number of landing pages and increased conversion.
If you're after the top performers, quantity does not necessarily equal quality.
Stay
with me here. Higher conversion rates, on their face, seem awesome.
However, if you're converting less qualified leads, you're actually
throwing MORE money away, because those leads cost you money.
I want you to focus on landing page optimizations like the above that move you in the direction of higher quality, more qualified lead generation, not just more conversions.
If you missed our last webinar, make sure you check out The Secrets Behind Ads with 3x the Average CTR. Our goal is to help you get every aspect of your AdWords account working at peak performance.
Now go forth confidently, young marketer, to slay competitors and wow prospects with your newfound conversion optimization knowledge. Give our free AdWords Grader a spin to see exactly where you're at with your current landing page strategy, then start making smarter changes that will rocket you past your competition.
And as always, if you have any questions about our data, strategy or the tips outlined above, fire away in the comments!
But what is a good conversion rate? If you're already achieving 3%, 5% or even 10% conversion rates, is that as high as you're going to go?
We recently analyzed thousands of AdWords accounts with a combined $3 billion in annual spend and discovered that some advertisers are converting at rates two or three times the average. Do you want to be average, or do you want your account to perform exponentially better than others in your industry?
Through our analysis of this massive amount of data on landing pages and conversion rates, we were able to identify some common traits of the top converting landing pages. What do they have that you don't? Believe it or not, there isn't much standing between you and conversion rates double or triple what you're seeing today. But the way you’re going to get there is totally counter to typical conversion rate optimization wisdom.
- Why Conventional Wisdom Around Conversion Rate Optimization is Silly
- What Is a Good Conversion Rate?
- How You Can Replicate the Success of Top Landing Pages
Why Conventional Wisdom Around Conversion Rates is Silly
Learning that the experts you've been listening to all along are wrong is a bit like learning for the first time as a kid that mascots aren't real. Underneath that fluffy suit there was just a sweaty unshaven guy. Everything you've learned about conversion rate optimization is a bit like that: shiny and pretty on the surface, but seriously lacking in substance.How is everyone getting it so wrong? Primarily, if you're singing the same song as everyone else, you can really never be anything more than average. When all of the gurus are all preaching the same optimizations, and all of your competitors are listening to them, how are you supposed to stand out?
The Classic Conversion Rate Optimization Test is Silly
Ladies and gentlemen, this is the Great Conversion Rate Optimization Fairy Tale. Once upon a time, a self-professed marketing guru told you it's really important that you optimize your site. They shared one example where the author changed the button color, or the font spacing, or the image. Lo and behold, the advertiser's conversion rate jumped by 2-7%.Let me show you what happens with those gains generated by these small tweaks on your page. Here's an example of a landing page split test; the gray line on the bottom is the first page version we were running. The blue line is the second version we ran against it. In the beginning, the new page far outperformed the old. Awesome, right?
This isn't true all of the time, of course. However, we found that in the majority of cases, small changes like line spacing, font colors, etc. = small gains. If you want big, serious, long-lasting conversion gains, you need to move past these spikes that last only a couple of days or weeks.
Why does this happen? Often, it's because the total volume of conversions you're measuring against are low to start with. If you're looking at 50, 100 or even 200 conversions across your entire test, small changes can seem more impactful than they really are. A couple of conversions might mean a 4% conversion increase if there are only 50 conversions total, because your sample size really isn't big enough to start with.
It's Time to Stop Moving the Chairs Around
First, we need to know:
What is a Good Conversion Rate?
Hint: it's a lot higher than you may think.Conventional wisdom says that a good conversion rate is somewhere around 2% to 5%. If you're sitting at 2%, an improvement to 4% seems like a massive jump. You doubled your conversion rate! Well, congratulations, but you're still stuck in the average performance bucket.
In this analysis, we started with all accounts we can analyze and went back a period of 3 months. We removed those that didn't have conversion tracking set up properly, those with low conversion volumes (<10 conversions/month), and low volume accounts (<100 clicks/month), leaving hundreds of accounts for our analysis. We then plotted where the accounts fit in terms of conversion rate.
Remember, this isn't for individual landing pages – these advertisers are accomplishing 11.45% conversion and higher across their entire account.
Clearly, this isn't some anomaly; this is perfectly attainable. If you're currently getting 5% conversion rates, you're outperforming 75% of advertisers … but you still have a ton of room to grow!
But Conversion Rates Are Lower in My Industry…
That's entirely possible. We segmented conversion rate data by industry to see whether these insights held true for all marketers. Here's what we found in an analysis of four major industries:The flip side, of course, is that if you're in a high-performer industry like finance, 5% really isn't a fantastic conversion rate. If you're comparing yourself to the average across all industries, you're really deluding yourself into thinking you're doing better than you are. In truth, the top 10% are doing almost five times better.
Even if the average conversion rates are lower in your industry, the top advertisers are outperforming you by 3-5x or more.
The Top 10% of Landing Pages: What Makes Them Tick?
What do these top 10% of landing page unicorns look like and how are they killing the competition the way they are? We went through 1,000 landing pages and performed a qualitative analysis, in order to find the common traits among the best performing advertiser landing pages in the market.Here are my top five tips to help you reach landing page unicorn status:
1. Change the Offer
Across all of the high-performing landing pages, we saw massively creative and differentiated offers. Companies often have a default offer, their go-to, which may be the same or very similar to what all of their competitors are doing. Lawyers, for example, will offer a free consultation. Software companies will offer a free trial. They're unimaginative and not very creative.How can you get creative with your offer? In our case, we realized that offering prospects a free trial of WordStream software really wasn't very imaginative or compelling. We had to think outside the box (don't you love that phrase?) and come up with something different and unique; something more tangible and compelling than just sending them to a software trial to find their way around.
So how do you know if your offer stinks? If your conversion rate is stuck at 2% or lower, you're not there yet. But the real way we figured out how our offer stunk was by asking our customers. We added one form field on our landing page form to ask people what they wanted our help with – and it wasn't a free software trial.
Brainstorm, ask your customers, and come up with more unique offers to test. You'll never know which one is the winner until you try some new offers out.
2. Change the Flow
Sometimes, you're putting up barriers to conversion without even realizing it.This was actually so effective that they were overwhelmed with conversions. They ended up backing off slightly and using the registration to find more qualified leads, by asking for the information one week after the download, once their prospects had time to sit and get to know their software. Changing the flow helped them boost conversions, but also manage lead quality in a far more effective way.
Here's another great example, where the advertiser realized their landing page offer didn't necessarily speak to the person who would be performing a search. In their case, a loved one or friend might be seeking help.
So what's the takeaway here? Find the flow that works best for your prospects and use it to boost conversion rate and qualify your leads.
3. Use Remarketing as a CRO Tool
On average, 96% of the people who visit a website will leave without ever converting to a lead or sale. Remarketing helps you get in front of these people with targeted, relevant messaging as they take part in other activities around the web, like email, watching YouTube videos, using social networks or searching for information.Check out my post at Moz for a deep dive into this incredibly effective tactic.
4. Try Out 10 Landing Pages to Find 1 Unicorn
Let's talk about effort for a minute. What do you need to put into CRO to find your own unicorn landing pages? To understand this, let's look at the relative abundance of these top performers:On average, you should be testing four unique landing pages – with varying offers, flow and messaging – to find that one awesome landing page. If you want to find a unicorn landing page – that top 10% page that sees your conversions reaching 3-5x the average – you need to test at least ten landing pages.
Here, we've analyzed an e-commerce account with 1000 unique landing pages. About a third of traffic goes to the top most-trafficked landing page in their account. When we dig deeper, we see that about 80% of traffic goes to just the top 10% of landing pages.
Here's more proof that burning the midnight oil creating dozens or hundreds of landing page variations isn't the best use of your time:
If you're after the top performers, quantity does not necessarily equal quality.
5. F%@# Conversion Rates
Wait, what??I want you to focus on landing page optimizations like the above that move you in the direction of higher quality, more qualified lead generation, not just more conversions.
Key Takeaways
So what have you taken away from this? I hope you can get the following to stick and use these tips to guide a more holistic, effective conversion rate optimization strategy – the kind that will boost your conversions, but bring better lead quality, as well.- Most landing page optimizations are like moving around the deck chairs on the Titanic. Small changes = small gains.
- Insanely focused and strategic landing page optimization brings 3-5x the conversions AND improves lead quality.
- In some industries, even 5% conversion rates aren't that impressive. If you're stuck in the 2-5% conversion rate bucket, you have a ton of room to grow.
- Get creative with your offers and test multiple different offers to find the one that resonates best with your audience. If you want to get really crazy (you know you do), find different offers that can help you qualify leads in the process.
- Identify the obstacles keeping prospects from converting and get those roadblocks out of the way by changing the flow. Test different variations to find out exactly which path to conversion works best for your audience.
- Use remarketing to recapture people who showed intent but didn't convert.
- Test smarter, not more often. You need to test 10 unique landing page variations to find 1 top performer, but this goes far beyond changing a font color and calling it a landing page variation.
- Trim the fat in your account and ditch your lowest performers. Focus your energies on the top 10% of landing pages that earn 80% of traffic.
- Always, always keep your eye on the prize, which is making more sales or generating leads most likely to convert to sales. Don't let high conversion rates take precedence over lead quality or you're going to spend more qualifying leads. You need to find the sweet spot where everything works like a well-oiled machine.
If you missed our last webinar, make sure you check out The Secrets Behind Ads with 3x the Average CTR. Our goal is to help you get every aspect of your AdWords account working at peak performance.
Now go forth confidently, young marketer, to slay competitors and wow prospects with your newfound conversion optimization knowledge. Give our free AdWords Grader a spin to see exactly where you're at with your current landing page strategy, then start making smarter changes that will rocket you past your competition.
And as always, if you have any questions about our data, strategy or the tips outlined above, fire away in the comments!
No comments:
Post a Comment