marketing metrics

When you think of the machine that is your online business, what do you picture? Do you see something organic? Something mechanical?

I think it’s helpful to pick a vision. The marketing and sales functions are too complex. The tools and channels are changing faster today than at any time in history. Thanks, internet.

The advertising, marketing and sales process.

Vizualize your marketing machine to make good decisions about where to invest.

Visualizing the process helps us focus on the pieces one at a time, instead of being overwhelmed by the mass of moving parts that feed our pipes, funnels and drips. When we work with clients, we tend to talk about knobs.

Here’s what I mean.

Our Marketing Machine Looks Like A Scientific Instrument

The most powerful metric for an online marketing ecosystem is acquisition cost.

The lower your acquisition cost, the higher your profit.

The lower your acquisition cost, the cheaper all of your advertising becomes.

The lower your acquisition cost, the more places you can afford to advertise.

But acquisition cost isn’t a dial you set. It’s the product of several dials.

The Acquisition Cost Spectrophotometer

We control acquisition costs using a device called the “Acquisition Cost Spectrophotometer” (ACS). This powerful device has two dials.

1. Traffic cost

2. Conversions — Typically leads or online transactions

We plug the ACS into any incoming channel — search engines, email, referrals, social media and so on. Then we begin to play with the knobs.

If we increase the traffic costs, but the conversions stay the same, we increase our acquisition cost, and the little red warning light turns on. If we dial down the traffic costs and keep the conversions the same, acquisition costs go down, and the red warning light goes off.

So, if we can increase conversions without increasing traffic costs, we get all the benefits of a lower acquisition cost. And for the paid search channel, we can actually lower the traffic costs by raising the conversion rate because Google rewards ads with effective landing pages by placing them higher on the search results pages.

Mathematically, the acquisition cost is calculated as:

Total Traffic Cost/Conversions

OR

Total Traffic Cost * Conversion Rate

If we put our metaphor down for a moment, we know that each of these “knobs” actually involves an entire process. Our “Traffic Cost” knob is controlled by an advertising and media team focused on getting the highest quality clicks for the fewest dollars.

Our “Conversions” knob is a metaphor for a team of data scientists, developers, designers and test techs focused on delivering the right experience to entice action.

All the marketer needs to do is determine if they should be investing in traffic or conversions, then fund the teams accordingly.

Vectron Conversion Analyzer

These are the primary knobs you turn when optimizing for conversion.

These are the primary knobs you turn when optimizing for conversion.

The Vectron Conversion Analyzer doesn’t actually exist, but we can visualize ourselve adjusting the knobs as we optimize our site.

When focused on optimizing a website for a given traffic channel, there are a number of knobs we control. I visualize a “Vectron Conversion Analyzer” as a metaphor for our process.

This amazing device allows us to control a number of “ingredients” that can lead to more conversions for any given traffic source. If you read this column, you’ll be familiar with most of the knobs on this little gem.

Value Proposition

The headlines, text, and images that spell out the value being offered by your company and products. Answers the question, “What’s in it for me?”

Layout and User Experience

The way the design draws a visitor’s eye to the important parts of each page and the cues that move them step-by-step along their exploratory journey.

Should important information be moved above the fold? Is there a visual hierarchy that tells the visitor what is important?

Credibility And Authority

A site design’s first job is to make the site seem credible. It should communicate that the company and products represent an authority in the solution space that it occupies.

Trust And Security

The visual cues that tell a visitor that the site will treat any information exchanged with care and veracity.

Social Proof

What do others like me think about this company, site and products?

Splitting The Signal

The Vectron machine splits the traffic up, allowing us to test different settings at one time. This is how we determine two very important things:

1. What is lacking from the site that visitors expect.

2. By how much each change increases the site’s performance.

AB Testing gives you the feedback on your conversion optimization work.

AB Testing gives you the feedback on your conversion optimization work.

Visualizations That Help You Prioritize

We rarely have the budgets to invest in every part of our marketing machine. Having a metaphor by which you can visualize the pieces working together offers a powerful way to decide how to invest over time.

Using the visualization at the top of this page, you may not have any luck seeding your brand clouds with advertising until you’ve built brand awareness. When it rains, you should invest in the downspouts that drive leads into the soil of marketing.

If your sales close ratios aren’t flowering, you may need to look at the quality delivered by ads and conversion together. Once you have a low acquisition cost, you can again invest in more expensive advertising channels to seed your brand’s rain clouds and bring the rain.

This is a common question, and requires an understanding of the definitions of bounce rate.”
The bounce rate is a bit slippery and requires some examination. The intention of measuring the bounce rate is to figure out how many of your visitors are leaving almost immediately after arriving at your site. This metric provides for a lot of error in interpretation.

“A high bounce rate means you’re site is crappy.”

This is rarely the case. A more accurate explanation is that your site doesn’t look the way your visitors expect it to look. Understanding what your visitors expect is the way to reduce your bounce rate.
Instead, there are usually some more valid reasons for your high bounce rate. Here are the things we examine when confronted with uncomfortably high bounce rates.

You’re measuring it wrong.

How you measure your bounce rate can give you very different insights. For example, blogs often have high bounce rates. Does this mean that visitors don’t like the blog?
Many analytics packages measure a bounce as a visit, or session, that includes only one page. Visitors who take the time to read an entire article would be considered a “bounce” if they then left, even though they are clearly engaged.
We set a timer for our blog traffic, so that any visitor who sticks around for 15 seconds or more is not considered a bounce.

Technical Difficulties

We are fond of saying that you don’t have one website, you have ten or twenty or thirty. Each device, each browser, each screen-size delivers a different experience to the visitor. If your website is broken on one of the more devices popular with your visitors, you will see a bump in overall bounce rate.
If your pages load slowly, especially on mobile devices, you can expect a higher bounce rate.
If your page breaks out in a chorus of Also Sprach Zarathustra when the page loads, you may enjoy a higher bounce rate.

How to diagnose

Your analytics package will track the kind of device your visitors are coming on.

Is there a problem with this site when viewed with the Safari (in app) browser?

Is there a problem with this site when viewed with the Safari (in app) browser?


The Google Analytics report Audience > Technology > Browser & OS shows that there may be a technical issue with Safari visitors coming from within an app. This may also reflect visitors coming from mobile ads, and they may simply be lower quality. See below.
With Google Analytics Audience > Mobile > Devices report, we see mobile devices specifically. The Apple iPhone has an above-average bounce rate, and we should probably do some testing there, especially since it’s the bulk of our mobile traffic.
With an above average bounce rate, visitors on an Apple iPhone may be seeing a technical problem.

With an above average bounce rate, visitors on an Apple iPhone may be seeing a technical problem.

Traffic Quality

If you’re getting the wrong visitors, you will have a high bounce rate.
Remember StumbleUpon? Getting your site featured on the internet discovery site often meant a flood of new visitors to your site… and a crash in your conversion rate. Stumble traffic was not qualified, they were just curious.
Your bounce rate is a great measure of the quality of your traffic. Low quality traffic bounces because:

        

  • The search engine showed them the wrong link. Do you know how many visitors used to come to our site looking for a “conversion rate” for Russian Rubles to Malaysian Ringletts?!
  •     

  • The visitors aren’t ready to buy. They were in a different part of the purchase process. Visitors coming from Social Media ads have notoriously low conversion rates. They weren’t looking, they were just surfing.

We take a closer look at the source of traffic to diagnose a traffic quality problem using Google Analytics Acquisition > All Traffic > Channels report.

Display and direct traffic are our biggest traffic sources and bring the most bouncers.

Display and direct traffic are our biggest traffic sources and bring the most bouncers.


Here we can see that traffic coming from Display ads and those visitors coming “Direct-ly” have a high bounce rate. These two sources also make up 50% of our traffic. Ouch.
In the case of Direct traffic, we expect most of it to come to the home page. With a click, we can see that indeed 50% of Direct visits are to home.
Filtering for Direct traffic, we see that 50% of it is entering on the home page.

Filtering for Direct traffic, we see that 50% of it is entering on the home page.


Clearly we need to do more to get visitors on their way into the site. As Tim Ash says, “The job of the home page is to get people off of the home page.” He didn’t mean by bouncing.
With regard to Display ads, we my have a problem with broken promises.

Broken Promises

Do your entry pages consider the source of visits?
If your traffic is clicking on an ad that promises 20% off on a specific propane grill, and they’re directed to your home page, you’ve broken a promise. You might think that they will search your site for the deal. You might even think they’ll search your home page for the deal. You’re wrong. Many will jump.
Every ad, every email invitation, every referral link is a promise you make to your visitor. If they don’t come to a page that lives up to the promise, they are likely to bounce.

        

  • Does the headline on the page match the offer in the ad?
  •     

  • Does the product in the email appear after the click?
  •     

  • Are the colors and design consistent across media?

This Dispaly ad takes the visitors to a page that is almost designed to disappoint.

This Dispaly ad takes the visitors to a page that is almost designed to disappoint.


Looking at your ads on a page-by-page basis is necessary to diagnose and correct this kind of bound-rate problem.

Vague Value Propositions

Ultimately, if you’re not communicating your value proposition to your visitors clearly, you are going to enjoy a monstrous bounce rate.
[sitepromo]
Your value proposition typically does not address your company or your products. It should be targeted at your visitor, why they are there, and why they should stick around.
Each page has it’s own value proposition. Your business may have a powerful value proposition, but each page should stand on its own.
A contact page should talk about what will happen after you complete the form. Who will contact you? How long will it take? Will they try to sell you something?
A landing page should clearly state that you are in the right place and provide reasons for you to stay and read on.

This landing page delivered a strong value proposition in above the fold.

This landing page delivered a strong value proposition in above the fold. See the full case study and video.


A home page should help you find your way into the site. Most home pages are treated like highway billboards. No wonder people just drive on by.
Ultimately, we don’t want to reduce our bounce rate. We want to improve our conversion rate by bringing the right traffic, to the right page, with the right message, and avoid technical issues that get in the way.
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Richard Strauss: Also Sprach Zarathustra by Kevin MacLeod is licensed under a Creative Commons Attribution License.

Brian the Conversion Scientist is always excited to share his knowledge about website optimization. He’s also an entrepreneur just like his clients. Dr. Jeremy Weisz from INspired INsider interviewed Brian about his highest and lowest points leading his business.

Brian talks about client negotiations, how he feels about his employees (hint: nothing but good feelings!), and advice for making a better website.

Listen to the full podcast or read the transcript: it’s educational and unexpectedly touching.

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Transcript

Jeremy:
Brian, since it’s INspired INsider, I wanted to hear about what’s been a really low moment and how you pushed forward through it, and then on the flip side a proud moment.

Brian:

I think our lowest moment would have to have been when we signed up a do a pay for performance.  We had a deal where we were being paid a retainer, and we also got a bonus based on how much we increased their conversion rate.

And as you can imagine on a complex site, it’s really hard to determine how much of a conversion rate increase is due to the market, how much is due to promotions the company was going to do anyway, and how much of it is due to us. But we came up with the formula that would take several different measurements and average them, and if it went to this certain point then we got a certain percentage of revenue.

We had a month go by, and there was a huge increase; it looked like our bonus was going to go through the roof. We had just started, and we know we didn’t make any changes. So we started working vigorously and the next month, they had some specials, and again we had a bonus that was just through the roof.

We felt like we had to stick by our guns because that was the agreement.  I mean if every time the bonus coincidentally was in our favor was early on – rather than being lower early on – then we wouldn’t have much of a leg to stand on for future agreements like this one, which by the way we don’t do anymore.

It ended up being a very confrontational negotiation. It came to a good settlement, and we lost a customer. We lost a very interesting customer at that. So that was kind of the low point.

Jeremy:
You mean that they said it wasn’t due to you, so they didn’t want to pay you the bonus?

Brian:

That’s right.

Jeremy:

That’s painful.

Brian:

We said “You might be right it: it may not be due to us or not all of it, but the agreement says this is how we calculate the bonus.” That was the agreement: we’re going to calculate it using this formula. We had offered to cap it, and they said “No, we want you guys to be motivated to really make us rich.” And I think we could’ve, and I wish we had been able to keep going with them.

Jeremy:

How do you navigate that type of negotiation because it is a client relationship, but then also you deserve to be paid a certain amount. I’m sure this happens all the time in a lot of business type of situations. How did you come to the table, and how did you handle the negotiation? Is that an easy process?

Brian:

I think probably the most important thing we did is we got on a plane and flew out there. Being face-to-face made it more confrontational but realistically confrontational. There’s an amazing ability of the human mind to read somebody’s face, so that’s what we decided to do rather than trying to read their voices and faces over the phone. I think that was probably the most important thing.

We never wavered, but we did compromise. We didn’t get the full bonus, but we told them what we were willing to take. We did a good job making our case for it. And you know I think that’s all you can do.

Jeremy:

What would you tell someone if they experience the same situation – someone backs out of an agreement? What advice do you have for them?

Brian:

We talked about litigation, but we didn’t see that as a tactic, and we didn’t use it. I think holding the other side to their highest – even when they get heated and when they sound irrational to you – assume that they’re working for the best, and they’re working for the fairest.

There’s a fundamental difference in the way people will behave if you expect a certain thing from them.

Even in a business situation sometimes somebody’s job is on the line, and they negotiated a bad deal with you. We had one other situation where they said “We didn’t know you were going to charge so much. We didn’t quite understand the agreement.” It was a much smaller amount of money, but hold them to their highest and plan ahead of time where your concession points are. Tell them how much you’re willing to concede and concede slowly. So if you’re talking about $100,000 deal, your concession points are going to be in the $99,000 or $98,000 range.

And don’t worry about seeming unreasonable. You can keep going, but that’s where really where you find out where their concession point is. Find a compromise that you both feel like “I can take that.”

Jeremy:

Lesson learned. Now you don’t do pay for performance.

Brian:

Pay for performance has potentially two outcomes with the wrong organization. I wouldn’t rule it out categorically, but number one, you are wildly successful with them, and you become too expensive to be kept on.

Or number two, you don’t you have inclusive tests for a long period of time, so you’re not making any money with them.  Your employees begin to think “Well I’m making money over here with this other client, so I’m going to spend more time on that.” So it never actually gets its fair shake past some of those early failures.

So no it doesn’t work. We do flat rate, fixed price consulting. We don’t even do hourly. It’s a flat rate. It gives us the freedom to do as much as we need to do to delight the customer. And so that’s what you want. You want someone who has the resources to really put a lot of money in your pocket.

Jeremy:

I can see with the first deal the guy made with you that they want you to be motivated, so they didn’t want to cap it which I would think makes perfect sense.

So what about the proudest moment?

Brian:

I think that there have been a number of proudest, but for me the proudest has been really over the last six months. We’ve brought on a new Conversion Scientist, and we’ve had one who has been with us for longer, but the two of them really have delighted clients. They’ve been able to come in, get up the learning curve on reading the tealeaves that are the analytics and all the other research that we do, then consistently deliver wins.

In one case, we started off very rough. We had a couple of inconclusive tests.  These were language tests, and we were changing the language on buttons for a barcode company. The control beat everything. We were struggling to get statistical significance because there was also a little bit of “Should we go with this conclusion or not go with this conclusion?” It just felt very rough, so to be able to turn that around and turn it into tripling the conversion rate, it just feels great. We were running on kind of a high.

We’re in demand, and our process is really working. We do have tough clients in other sectors, but it just feels great to see other people catch the disease that I got back in 2006 of “Oh my gosh! This brings everything together!” The data, the technology, the development, and the entrepreneurial side. We’re really scrambling to make more money for our clients, so to see that excitement pop up in your employees feels really good.

Jeremy:

Is it hard to get clients to listen? When you triple conversions they probably say “I’m all ears” but before that in the initial tests, I would think it’s hard to convince them you should do things a certain way for a long time if you have these inconclusive paths.


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Brian:

There is a lot of back and forth. Some clients begin to get excited and they come up with their hypotheses, and then we say “We have some of this data from a previous test” or “We saw this over here that says it’s probably not a good hypothesis”. But then other times a client will come to us with a great hypothesis, and we’ll think “Oh my gosh why isn’t that on our list?”

That conversation usually works out well, but what is harder are situations like when we had a client that sold sports memorabilia online. Customers were going to the purchase page and adding something to cart.  They’re buying; they are going through the process. Then customers change the state that they live in, so the terms of the shopping cart change, and one of those little twirling rings goes off while it’s going to the database and grabbing the new tax information.

In Internet Explorer, that twirling ring didn’t go away, and it was spinning right next to the credit card number field. Imagine this: you’re about to enter your credit card number, but you’re not about to enter it until the browser says it’s ok. It’s spinning about 30 seconds then another twirling ring pops up, and now you’re thinking “I’m not going to give my credit card to these bozos”. Thirty seconds later, another twirling ring. So you have three of these spinning things.

We decided to design some java script, and we fixed it. We actually ran a test because we wanted to see how big of an impact this was having because this problem was at the buy point.

It was costing them over $1,000,000 a year in revenue!

Jeremy:

Wow that’s amazing.

Brian:

We presented this to them, and they were like “ok”.

So then we were thinking, “Wait a minute, what’s going on here?  Why aren’t they more excited?” When we see a test that delivers a 25% increase, when we put it on the site it’s generally going to see a 10-12% increase in actual. There are a lot of other things come into effect and change the results, and you know 25%? That seems ok.

So with the sports memorabilia company, we were thinking, we just made you a million and a half dollars, worst case, and you’re not really reacting. That’s more perplexing to us, when they have no reaction.

Sometimes the person you’re dealing with within an organization is more worried about their job instead of what we’re doing.  In enterprise organizations it really is about career advancement, and you can tell that this is not something that they think is going to help get them ahead. They’re just not as excited.

Jeremy:

It’s not their business.

Brian:

It’s an individual or someone who reports directly to the CEO or something. So that’s more frustrating. We’re rah rah’ing, and it’s silence on the other end, and you’re wondering what’s going on. They should be hiring a marching band and marching through our office.

Jeremy:

They’re covering the phone and just screaming or something.

Brian this has been an absolute pleasure. Where can we point people towards? Where should people go to check out more?

Brian:

You know everything we learn, we write about. We’re really a teaching organization because that’s what it’s going to take to get more of these websites up and optimizing. So come to Conversion Sciences.

We post several times a week there: case studies, head-scratchers, things we’ve learned, audio, there’s a lot of video, we’ve got a podcast if you like to listen to things on the commute. And you know we’ve got the data that answers some of the questions that I know are burning in your little brains.

Jeremy:

Conversion Scientist.  Yeah, I was reading one this morning: why no one is reading your emails.  That was a good  one.

Brian:

Everything is fair game. Also, go download our report if you’re in the university world. We’re going to be doing those reports at least once a month for different industries, so absolutely go to the contact page and send me an email if you want us to do your industry.

Jeremy:

So any final thoughts?

Brian:

Entrepreneurs: those of you who are embarking on any business right now are going to have a website to support it. I can’t think of an exception. And you’re going to go hire a web developer or maybe do that yourself. And a designer to tell you what to do. A marketer today is not going to be able to go off and do that anymore but the good news is that the data is readily available.

Even if you’re a little afraid to get a little math-y and maybe understand a little statistics, I strongly recommend that you go and poke around in analytics. Make sure that you’ve got Google Analytics – which is a free tool – installed and start building this database so you can test yourself. That’s where it all starts. Start poking around; I know us entrepreneurs are pokers. We’re going to get to know just enough about a space that we feel confident either winging it or competently hiring someone who can do it for us. You need to be doing that on the site because it will accelerate your growth, especially out of the gate when those few precious leads, few precious sales, few precious users will make or break your business.

Jeremy:
Awesome Brian, thank you so much I really appreciate it.

Brian:

Thanks for having me man. Glad I could come.