Shazeeye's Blog Thoughts on User Experience, Technology and Business

13Jun/140

Five steps to improve your conversion funnel

Dear Readers,

I apologize for the hiatus.  I almost forgot about my dear blog after having a baby (Sept. 2011) and starting a new job (May 2012). I'm back and want to update you on all the wonderful things that I've learned over the last 2 years.

Let's start with some best practices to improve your conversion funnel. A conversion funnel is a series of steps that users need to get through to get what they wanted on a website. For example, if users want to print coupons from your site some of the steps they would go through would be sign up (optional), select coupons, download and install software to print coupons (only for new users and not returning) and finally, print coupons.

Step 1: Define the "steps" or stages in your funnel and track it. Some funnels are complex but it is critical to define them. Some steps could run in parallel while others could be sequential. Some are optional while others are mandatory. Some steps are not required for certain segments (new vs. returning visitors example above) of your site traffic. In all these cases having a visual flow will help tremendously. Tracking these steps and how many get through each step is also very critical. For many sites it may be easy to turn Google Analytics on and get this data but in some cases such as the coupon printing one above it can be difficult to track activities that are not on the site. It was easy to track how many clicked on the print download button but difficult to track what steps took place after the click when the plugin was downloading on a user's laptop.

Step 2: The next step is to monitor the funnel to get a baseline while accounting for highs and lows due to seasonality, day of week or time of day. It is important to get a predictable baseline to make sure improvements to the funnel can be attributed to your efforts and not external causes.

Step 3: Prioritize and understand the drop offs in your funnel. Now that you have a baseline and know how many are dropping off at each point you can prioritize which one to tackle first. For example, we looked at users that added coupons to their credit card so they could use the coupon if they swiped their card at the store. We prioritized on the last step and targeted those that added the coupon to the card but did not use it. If we increased conversions at that point we would have maximum impact as we would increase our revenue if they used the coupons on the card.

Step 4: Understand why users are not converting. There are many ways to understand why users are leaving your site. The most simple and effective way is through a survey but you could also do some usability tests. To understand why users were not redeeming we sent an email to the users who added the coupons to the card but didn't use them with 3 simple questions. Why have you not used the offer? How likely are you to return to the site and use other offers (rate us)? Why did you rate us this way? Insights from our survey indicated that users had forgotten about the offer or didn't shop at that store recently. Thus to improve conversion we are considering alerts as a way to remind users to use the offer and them check conversion. In this case it was easy as we had email addresses to send a survey but if you don't you could pop a survey when a user is leaving your site to understand why. You could also follow up with some interviews to get more insight after you conduct a survey.

Step 5: Make changes and repeat steps 3 and 4. We will soon be testing if alerts will have higher conversions that no alerts (or the control group). There is lots of literature and best practices on A/B tests (see a presentation from KISSmetrics) specifically how many to test, what significance level to accept and how long to test. After you decide on making the change or rejecting the change you would go back and optimize on another step (assuming you have done everything for this step) and repeat steps 3 and 4.

30Mar/120

Indicating Interest Online Quantitatively

Attention and interest on the web are critical metrics and are an essential component that should guide any online strategy.  LinkedIn has done an excellent job in this area of indicating interest quantitatively. Let us look at a few examples:

Indicating interest in you/your profile by showing how many looked at your profile. Indicating interest in a job by showing how many people clicked on the Apply button.  Indicating interest in your connections by showing how many changed jobs in a year.

There are some other examples in the online retail industry. For example, Rue La La indicates interest in their products (clothing, accessories, home goods, etc.) by letting us know how many Ralph Lauren sweaters are left to buy thus indicating how quickly a product is getting sold. We also measure interest (though not shown quantitatively) by grouping stuff under most popular, most commented and most shared on various blogs and news sites.

The theme of the third largest social network, Pinterest (Facebook and Twitter are the top two) is centered around interest. Interest is indicated quantitatively through likes, repins and comments. We need to have a measure of interest by consolidating our online behavior (sharing, commenting, viewing, etc.). Let me know if you have any ideas on how to measure interest.

30Jul/110

Design that drives Action

On July 21st I went for a talk by Bryan Zmijewski, the founder of Zurb a design company. Bryan emphasized that visits to a site mean nothing unless users are engaged or motivated to act. Design must drive action and this is done through three concepts - visual design, content and form elements. Visual design provides context, content guides decisions and form elements are input mechanisms that finalize actions. He gave examples for each concept as seen below.

Visual Design

1.  TinyPic is a website where users upload and share images and videos. The company runs solely on ad revenue with ads displayed on the left of the upload feature. Zurb changed the visual design of the page by adding a border (highlighted in red) to the form so that users perceived the ad to be a part of the form as opposed to an ad preventing ad blindness. This resulted in a higher click rate on the ads bumping the cost per click from $2 to $5.

2. Photbucket is a photo sharing site that wanted to increase user engagement by increasing the number of users registering on the site. The tested two visual designs - one with a red register button and the other with a green. The hypothesis was that the green button would receive more clicks as it signaled go but in reality the red button got more clicks due to higher contrast.

3. Basekit creates, hosts and manages websites and wanted to increase user subscriptions by highlighting the differences between their pricing plans and motivating users to make a choice. As seen in the images on the right the design with the colored contrast between the pricing plans indicating the top 3 differences between the plans got 25% more sign ups.

Content

1. Notable Screenshots helps users capture images, websites, etc. deconstruct the media by adding notes and finally helps publish the media. Since each media needed to be captured and posted the tech team thought "New Capture" to be the right label to fit the action of capturing media but a content redesign unraveled that "New Post" got users to capture and post on the website 25% more as it the vocabulary better fit user mental models.

2. TinyPic - I will upload the content and graphic as soon as it's available.

3. Bagcheck, a website that lists favorite user products ranging from computers to phone applications, increased its user engagement by 50%  by writing the percentage difference between the sale price and the actual price.

Form elements- I will upload the content and graphic as soon as it's available.

1. Bling-It

2. Photobucket

3. Trapit


30Jun/110

Customer Acquisition Lessons in Internet Retailing

David Bell, Professor of Marketing at Wharton, gave an excellent seminar (download David Bell's presentation) last evening on the most important factors in internet retailing. He summarized four of his recent papers in this space and most of his research stems from Wharton's startups specifically diapers.com and Netgrocer.com. His online customer acquisition lessons are summarized below.

1. Social Contagion states that communication and observation affects online demand evolution. Traditional brick and mortar retailers are limited by their small trading areas. It is more likely for you to visit your nearest grocery store whereas the internet is unlimited but this also means that you don't know where your customer is located.  One of the main findings of social contagion (as seen in image on left) is that your new customers will be located near your existing customers. Communication and observation are key in social contagion. This is where word of mouth and visual differentiation are key. For example, Warby Parker, a Wharton startup, makes prescription glasses for $95  compared to the average competitor price of $500. They have visually differentiated themselves from the competition by making their frames a distinct color (blue, orange, turquoise and more) and a classic vintage-inspired shape (thicker frames). As for word of mouth they donate a pair of glasses to someone in need every time you buy a pair.

2. Spatial Structure follows a pattern of proximity and similarity. This finding states that social and demographic proximity and similarity can drive online sales. For example, an interpersonal property or similarity such as ethnicity could drive sales of an online product that started in Chicago and then moved to LA and then Springfield through word of mouth. Internet retailers first grow through physical proximity and later through similarity among distant locations. Thus internet retailers should target sparse locations with geographically diverse demand. For example, target zip codes that are not close to each other and not socially or demographically similar but have a good number of target customers.

3. Preference Isolation brings shoppers online and explains geographic breakdown of online brand demand. The image on the right explains this concept. Consider 2 markets for diapers- Market 1 with 200 people of which 100 have babies (50% penetration) and Market 2 with 2000 people of which 100 have babies (5% penetration). Market 2 is the preference (in this case diapers) minority and the market that an online retailer should target. The primary reason for internet retailers to target Market 2 is that the brick and mortar stores in Market 1 will stock 50% of their shelf space with various diaper brands (pampers, huggies and even niche brands such as 7th generation) so it is easy for people in this market to access these diapers but Market 2 is going to allocate only 5% of their shelf space thus carrying the top selling brand only (say Pampers) so customers are more     likely to look online for  the other brands especially niche brands thus driving online sales.

4. Acquisition Modes vary in efficacy according to location characteristics. Different acquisition methods (magazines, online WOM, offline WOM, online search) get you different customers and are complementary as seen from the image on the right. Word-of-mouth (WOM) acquisitions  benefit from physical proximity among targets (offline WOM—contagion; online WOM—connectivity). Use magazines for sparsely populated markets and WOM for densely populated markets.

Many other factors such as taxes, shipping cost and type of product matter in customer acquisition in internet retailing but have not been studied in this research.

27Jun/110

E-Commerce Trend: Online Rentals

I wrote a post on Web Trends in March 2011 and renting (as opposed to owning) on the web is one of the six trends of Web 2.0. After visiting a few conferences and following a few startups it definitely seems to be a trend so I decided to put together a list of different industries that rent their products/services.

Home rentals - Airbnb: a startup that connects you to people renting their homes across the world. It provides a sense of community that a hotel cannot and saves you money at rates much lower than hotels. Owners renting their place can define their daily rates and get more value from their property by renting their homes for days, weeks or months based on their preferences. The reviews, pictures and comments help craft the experience for renters to decide what kind of place would best suit their needs.

Baby equipment rentals- Travel Babees: Helps mothers and fathers rent baby equipment such as strollers, cribs, car seats, etc. which are really make traveling hassle free.

Vacation home rentals - VRBO: Vacation rental owners who self-manage their second homes provide a comfortable stay near vacation hot spots that range from the beach to the mountains to visitors and tourists.

Car rentals- Getaround: A startup that won Techcrunch Disrupt Winner, 2011. Getaround connects you to people renting their cars in your city. You can choose from Teslas to Hondas for an hour or more while Getaround takes care of the insurance.

Furniture and Electronic rentals - Rent-a-Center: Hassle free rentals on furniture, appliances and computers for as long as you want.

Event and Venue rentals- SFStation for Venue rentals and Abbey for Event rentals in San Francisco: Hosting and renting for events ranging from weddings to corporate events. You can find one in your city too.

Parking Space rental-ParkingSpots.com: Commercial Owners and Homeowners can rent out their parking spots to make some extra money.

Book Rentals - BookSwim: Aims to be the Netflix of book rentals. You can rent and return books of all kinds without the hassle of late fees, due dates and prepaid mailing boxes. Ebook lending will soon takeover this space.

Movie Rentals- Netflix: Netflix rents movies for a fixed monthly subscription and is one of the most successful business rental models in any industry.

Video Game rentals- Gamefly: With the video game industry making so many games on so many different consoles (PS3, Wii, etc.) a video game rental service makes sense.

High end fashion rentals- RentTheRunway: Customers rent dresses from top-name designers such as Diane von Furstenberg and Hervé Léger. Rentals are $50 to $200 for a four-night loan and are shipped directly to the customer's doorstep.

Wedding/Prom/Special Occasion rentals - Men's Wearhouse for Men and American Tuxedo for Women:  As most of these occasions occur once in a lifetime rentals in this case make sense as you may use it only once.

Office Space rentals - Regus: For small businesses and individual working spaces with office equipment. Gold membership gives you unlimited access to Regus' network of 1100 business lounges and cafés across the globe.

Medical Equipment rentals- RentItToday.com: You can rent everything from wheelchairs to hospital beds for your home or hospital.

Dear readers, if I missed a product/service rental please let me know so that I can add it to this list.

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