Ayat Shukairy, Author at Invesp

AN EXPERT GUIDE TO OPTIMIZE YOUR SAAS STRATEGY

Ayat Shukairy — Sat, 23 Sep 2023 13:16:12 +0000

Reading Time: 28 minutes

Disclaimer: This section is a TL;DR of the main article and it’s for you if you’re not interested in reading the whole article. On the other hand, if you want to read the full blog, just scroll down and you’ll see the introduction.

Finding the right pricing strategy and price points for your SaaS (Software as a Service) company is no mean feat. As a matter of fact, quite a few companies and especially startups struggle with defining a successful pricing strategy.
There are three overarching marketing challenges that marketing teams at SaaS companies must solve to drive revenue; Driving as many qualified potential customers as possible to their website, Converting these potential customers into first-time subscribers, and Retaining existing subscribers.
Pricing seems to be an easy task at first glance. But having the right pricing is one of the biggest challenges for SaaS businesses: if the price is too high, you will scare your customers away, and, if it is too low, you will lose money and that certainly affects your business performance.
Setting the right price for your SaaS requires understanding the value you provide your customers and understanding how your competition set their price.

Visitors Aren’t
Converting?

We’ll Show You Why

Finding the right pricing strategy and price points for your SaaS (Software as a Service) company is no mean feat. As a matter of fact, quite a few companies and especially startups struggle with defining a successful pricing strategy.
There are three overarching marketing challenges that marketing teams at SaaS companies must solve to drive revenue; Driving as many qualified potential customers as possible to their website, Converting these potential customers into first-time subscribers, and Retaining existing subscribers.
Pricing seems to be an easy task at first glance. But having the right pricing is one of the biggest challenges for SaaS businesses: if the price is too high, you will scare your customers away, and, if it is too low, you will lose money and that certainly affects your business performance.
Setting the right price for your SaaS requires understanding the value you provide your customers and understanding how your competition set their price.

How To Use Qualitative And Quantitative Data To Collect Customer Insight

Qualitative data allows you to see distinct groups within your target audience, it also allows you to see if your target audience finds your product/service attainable, etc.
Quantitative research also provides you with information on the least and most popular functions of your SaaS, how often your product is used etc.
There are several questions you should ask, answering these questions will help you develop your pricing strategy.
Conduct surveys, and use analytics, they let you understand your customer’s motivations.
We recommend starting with qualitative research and then complementing the qualitative research with quantitative findings. (see the main article for the general structure of questions to use in qualitative research depending on the stage of the prospect in your sales funnel).
Overlapping your qualitative data with quantitative research, you’ll need demographic data on the age, location, gender, etc of your prospects.

How To Quantify Your Website Personas.

A buyer persona is a detailed description of someone who represents your target audience
You cannot sell anything without knowing your customers. However, to create an optimized pricing strategy, you need to quantify these personas with strong data
To quantify your website personas, start looking for patterns in data collected and link these general patterns to your visitors’ persona.
You have a ton of questions to ask in this stage like what factors does my CAC depend on, and how does the purchase process work for each buyer persona?
Answering these questions (and the others in the main article) is critical to the setting of your pricing strategy and your business.

How To Define Your Saas Key Metric Value

Value metric is the thing that your customers value the most about your business. Value metric is the foundation of your pricing model.
After studying your audience, define the value metrics that you will use for your price tier creation. The value metrics you use depend on the nature of your business (the storage space, the number of emails sent, the number of page views and the number of users, etc.).

How To Create SaaS Pricing Tier

Define the minimum amount a customer must pay to cover costs
Define the maximum amount a customer is willing to pay for your service.
Assess competitive pricing
Map out your pricing tiers
Align your value metric with pricing tiers based on buyer personas.

How To Design Your Pricing Page

Define the elements of your pricing page.
How you design your pricing page is up to you. But you should remember that users should be able to grasp your value proposition and pricing in 5 seconds.
You should not baffle your potential customers with too much information on your pricing plans at the same time and you should not leave any space for guessing from their side.
The Majority of the SaaS companies do not use custom pricing. However, by having custom plans you make sure that you do not potentially lose enterprise clients. Enterprise clients come with the benefit of larger revenue and lending more credibility to your business.

How To Optimize Your SaaS Page Design Using Charm Pricing

Nowadays you rarely see prices ending on 0, most of them are “charmed” and end with 9,7 or 5 creating an impression that the price is smaller than it is
William Poundstone, in his book Priceless claimed that charm pricing increase sales by 24% on average.
Eric Anderson and Duncan Simester found out in their research that items tagged $39 sell better than cheaper items tagged $34

Here’s A Longer And More Detailed Version Of The Article.

Finding the right pricing strategy and price points for your SaaS (Software as a Service) company is no mean feat. As a matter of fact, quite a few companies and especially startups struggle with defining a successful pricing strategy.

In recent years, the use of SaaS grew year-to-year at a rate of 24.4%, and by 2019 it is predicted to account to around 20% of all software spending. No wonder the implementation of SaaS is gradually growing. It is easy to update, easy to debug and less expensive in comparison to traditional software services, especially for small and medium enterprises.

SaaS companies can make a profit from subscriptions, so there are three overarching marketing challenges that marketing teams at SaaS companies must solve:

Driving as many qualified potential customers as possible to their website.
Converting these potential customers into first-time subscribers.
Retaining existing subscribers.

Each of these problems can be broken down into many points, but this article will focus on how price optimization could help your SaaS product to convert more customers on the website.

Pricing seems to be an easy task at first glance. But having the right pricing is one of the biggest challenges for SaaS businesses: if the price is too high, you will scare your customers away, and, if it is too low, you will lose money and it will be your own fault.

Setting the right pricing for a SaaS product requires two things:

Understanding of the value you provide to your customers. Remember that your customers pay for real or perceived value you provide to them. Customers do not care what sales models you implement, what your costs are, all they care about is what is in it (in your product) for them.
Understanding how your competitors set their prices. Your company doesn’t exist in a vacuum, it is for sure surrounded by tens direct and indirect competitors. So, unfortunately, you cannot move forward with creating your pricing strategy without exhaustive competitive analysis of your competitors and understanding what they are doing and why.

Let’s see how you can blend these two things together into a compelling SaaS pricing model and beat up your competitors using these five steps.

1. Use qualitative and quantitative data to collect customer insights

There are several important questions you should answer during this step:

Why does your software matters to customers?
How and why do they value your software?
What pain points of your customers does it solve?
What features do they find most useful?
What motivates them to start using your software?
What are the hurdles that stop websites visitors from converting?

Answering these questions will help you determine how to position and price your service.

To pinpoint what motivates your customers to sign up for your service, how they use it, and what keeps them engaged, you should first collect and evaluate qualitative and quantitative data:

Conduct surveys, customer interviews; use customer feedback as a qualitative data.
Use analytics and demographic data as a quantitative data.

We would advise you to start with qualitative research (conducting surveys and interviews with the customers) and then complement the qualitative findings with quantitative research such as using analytics and demographics data to see how customers use your product, what features they like the most, and to what key value metrics you should give more importance.

Of course, you can start the other way around, with qualitative data. However, we recommend to start with qualitative research, organize your findings, for instance, using voice of the customer method, and then compare the results to qualitative findings. The reason is simple: why guess when you can ask your customers?

Here is a very general structure of the types of questions you should ask your website visitors, prospects and customers. Obviously, the questions you ask depend on the stage of sales funnel.

At the early stage of the sales funnel your goal is to understand:

Understand reasons visitors are visiting your website
Assess competitive space you operate in

Examples of the questions you could ask:

What do our competitors do better than us?
What brought you to our website today?
How have you found us?
Are you looking for anything specific? What is it?
Are you considering several products now? What are they?
Why are you looking a SaaS product X?
What are the top 3 features you are looking for?

In early to mid-stage of the sales funnel your goal is to understand:

Rate visitors’ satisfaction with your website
Rate visitors’ satisfaction with a particular webpage
Uncover the appeals of your site / product offering

Examples of the questions you could ask:

How happy are you with our pricing tiers? Which one do you love the most?
How would you rate your website experience today? Have you faced any issues?
What features of our product do you find most attractive to you and why?
Does your company has a certain budget for the need our SaaS product covers?

In mid to late stage of the sales funnel your goal is to understand:

Uncover missing content
Uncover Issues with the website/page
Understand reservations with using or purchasing product

Examples of the questions you could ask:

Do you think some of the features of the product/service do not address your needs? Why?
What additional features would you like to see in our products?
Is there any reason why you would not subscribe to our software? Why?

In post-purchase phase your goal is to understand::

Measure scale of satisfaction
Solicit feedback

Examples of the questions you could ask:

What is the greatest benefit you gained from our product/service?
What advice would you give to improve our product/service?
Do you think some of the features of the product/service do not address your needs? Why?
What additional features would you like to see in our products?
Why did you choose us over our competitors?
Do you feel satisfied when you use our product/service?
Does our software exceed your expectations? Could you give us a recent example about that?
How long do you see yourself using our software?
How likely are you to recommend our product to friends? Were you able to find the information you were looking for on our website?

You might wonder why should you ask questions that are not directly related to pricing. Actually, you should always look at the bigger picture and it is very important that you clearly understand all the reasons why people subscribe to your software.

Let’s have a look at a real-life example and see how understanding your customers and using this knowledge in pricing tiers can increase conversion.

Look at the original pricing table of a company offering a subscription to a database of essays, student papers, and book reviews.

Image source: Pulse

All best practices are there (we’ll review them a bit later in this article). What else could be done?

Knowing that the majority of the visitors are students, one could assume that the original price seems to be too high for them: $29 a month for a database subscription.

This assumption is proved to be right.

As soon as the price was presented in a different way, conversion rate skyrocketed by 193%. It turned out that the price per day was a better way to communicate the value to the target audience.

Image source: Pulse

After you collect qualitative data, you should have answers to these questions:

Who have I built my product/service for?
What distinct groups I can see within my target audience?
What pain points my product/service solves for each customer groups? What value does my product provides for them? Why would they use my product/service?
Do the customers find my products/services attainable?
What are the price expectations each customer group voices?

Basically, why should you do extensive and exhaustive qualitative research?

If you are new to the market, your goal is to find out who is ready (and willing) to pay for your SaaS product. And if you are an already operating company, your first focus is to find distinctive groups of customers within your current audience and then have a look around and see who else might be interested in your product/service.

You might ask: “Why should I do it again? I already did something like this when I created buyer personas!”

Actually, this time your research should be focused mostly on the value (expected or unexpected) you provide to your customers. And, if you don’t have buyer personas yes, the information you gathered through research would help you to map them.

Now it is time to overlap your qualitative research results with quantitative data.

You will need some demographics data on your prospects and customers:

Age
Gender
Location
Company size (if applicable)
Company revenues/ turnovers (if applicable)

Then you’ll need some data on how your existing clients use your product/service:

What are the most and the least popular functions?
What are the most and the least preferred types of data output?
How often do you customers use your product/service?
When do your customers stop using your product/service?
What is your current/estimated customer lifetime value for each distinctive customer segment?
What is current/estimated cost of user acquisition?

2. Quantify your website personas with data findings from qualitative and quantitative research

You cannot sell anything without knowing your customer. As a SaaS company, you, most likely have some buyer personas like ‘Startup Pete’, ‘Agency Andy’, and ‘Enterprise Sandy’.

However, to create an optimized pricing strategy, you need to quantify these personas with strong data. In the first step, we collected a lot of data on customer’s behavior. In this step, we do two things:

start looking for patterns in our collected data
link these general patterns to our visitors’ personas

You should ask yourself several things:

What value proposition does each buyer persona care about the most?
Are those buyer personas willing to pay prices that I set?
Do I know the top used features for each persona?
Do I know the least used features for each persona?
What is the LTV (Customer LifeTime Value) for each persona?
What is the CAC (Cost of Acquisition) for each persona?
What factors does my CAC depend on?
How does the purchase process work for each buyer persona?

Answering these questions is critical to the setting of your pricing strategy and your business.

What if you do not have answers to all these questions?

If you do not have the answers to all these questions right away, then start with creating estimates. That is better than ignoring the question altogether. Your next task will be to justify your estimates with the data you have obtained. After quantifying buyer personas, you should dig deeper in the problem areas your business could face.

The chart below, “Buyer Persona Problem Areas,” prepared by PriceIntelligently, gives further details about what kind of problem areas occur in SaaS Business and how to deal with them.

Image source: Price Intelligently

The problems that you, as a SaaS company, could face are probably included in the 4×4 matrix above.

For example, let’s say you are having problems with low acquisition volume. In this case, if your value proposition is not clear or you are using misaligned channels that confuse potential customers or generates fear in them about what you are offering, then your pricing structure should be relevant to your value propositions as well as to your brand promise to avoid any confusion or unnecessary fear.

As another example, if you are struggling with low conversions, this is likely because you did not set price tiers through considering each buyer persona. In other words, you did not set price sensitive tiers that can meet significant numbers of customers. To overcome this situation, you should go through the price sensitivity studies so that you can plan something that addresses customer needs and wants.

Without quantified buyer personas you will set your revenue on fire

Price Intelegently

Look at this case study by Conversion Experts. Reminding the visitors of the service value, outlining service features once again and adding money back guarantee incentive lead to 57% increase in the number of leads for Earth Class Mail. In this example, you can see how you can improve the number of leads by simply working with the value and features and without changing the pricing itself.

As you can see the original page is straightforward; it goes straight to business having prices in the above the fold area. All explanations are under the prices.

Image source: Conversion Experts

In the challenger, Conversion Experts explained again the value proposition, then reminded about features you get with every plan, and added money back guarantee. It turned out that if you remind your website visitors about the value you bring them, they are more likely to convert.

Image source: Conversion Experts

3. Define your SaaS key value metric

After we have learned what is important for our customers and what makes them tick, we have to decide on metrics that we are going to use to define your prices. Here the concept of value metric comes in place.

Value metric is what and how you charge for your service and how and where your buyer perceives value from your service (price per user, per visit, transactions per second, money per click, e-mail subscription, bandwidth, timeliness/speed etc.). In simple words, value metric is the thing that your customers value the most about your business. Value metric is the foundation of your pricing model.

Image source: Chargebee

To put simply, the image above illustrates two different libraries; one of them charges $10 per book, the other library charges $20 per month. In this case, one of the libraries set their pricing mechanism on the number of books that they lend for unlimited time. The other library sets their pricing on rental period and an unlimited number of books that you can take during this period. In this case, the number of books and the rental period are the value metrics.

Let’s take a look at the pricing page from CrazyEgg to better understand the value metric and other components that affect pricing.

Image source: CrazyEgg

The value metrics CrazyEgg uses are visits per month, number of the active pages and reporting frequency. These are the key value metrics.

At the same time, there are a few other features that act as secondary price differentiators: advanced filtering, mobile heatmaps, priority email support and multiple user accounts.

CrazyEgg’s four different pricing tiers (Basic, Standard, Plus and Pro) are categorized for different business types/sizes. If you are a small startup or a small business, then the basic package offers 10,000 visits per month, 10 active pages, and a daily report. Plus and pro packages, on the other hand, are designed with more features, for larger businesses. These larger packages offer additional enterprise features such as advanced filtering, mobile heat maps, a higher number of visits per month, a higher number of active pages and more frequent reporting.

To sum up:

After studying your audience, define the value metrics that you will use for your price tier creation. The value metrics you use depend on the nature of your business (the storage space, the number of emails sent, the number of page views and the number of users etc.).
Think about secondary features that you could use for pricing.

4. Create SaaS pricing tiers

At this point, you are ready to create pricing structure. There are few steps that you have to take here:

1. Define the minimum amount a customer must pay to cover your costs.

While this might sound easy, there is a lot of involved here.

Let’s start with a simple question: what is the cost to run a single customer?

At this point, we are focused on the variable cost that comes with a new customer. Most likely these costs would be based on the value metrics you defined. At its lowest level, it might be your server and support cost.

2. Define the maximum amount a customer is willing to pay for your software

There are some considerations which customers keep in mind when they evaluate how they are willing to pay for a subscription.

Before subscribing:

The perceived value of the software before using it: before using the software, the potential customer will have to make an educated estimation of how much value your software brings.
The cost of moving to your software: while this does not apply in all circumstances, you should pay close attention to it. How much will it cost the new subscriber to move to your platform? For enterprise software, sometimes, there are conversion and data transfer costs. There are many times where the cost is more than the dollars a customer pays. Sometimes, the customer might lose data if they decide to move to a new platform.
The total cost of running your software: the potential customer will most likely incur additional costs of running your software. Although they are not paying those costs to you, they are a consideration when using your software. Take for example paying for an Oracle license. The cost goes beyond the software itself. The company must account for staff training, paying for new positions, maintenance costs, etc. How about a chat software such as Liveperson or Olark – there is the cost of having the person who will respond to customer inquiries.

Post subscription and use:

The actual value of the software: After having the software in operations, the customer is most likely able to identify the value your software brings.
The cost of maintaining the software: How much money, time and staff does your subscriber should put in to continue using your software?
The opportunity cost of switching to another solution: What would it cost for a subscriber to switch to another solution?

3. Assess competitive pricing

In most cases, it is difficult to compare pricing in a SaaS model. This is especially the case when companies use different value metrics.

At the same time, do not disregard your competitors because your potential customers are not going to ignore them.

There are two ways to go about setting prices. Cutting your prices compared to your competition. This seems simple enough. However, you need to make sure that you are providing the same value as your competitors.

We are not big advocates of reducing price subscriptions to capture customers. You should charge customers the highest amount possible at the same time providing them with the highest value.

Another approach is to increase your prices compared to your competitors. In addition to the additionally generated revenue, done correctly, this might help drive a higher perceived value from your software.

Have a look at this case study, Sever Density is a website monitoring software. They decided to test their hypothesis that increased prices will reduce the number of free signups and increase the total revenue.

The original page looked like this:

Image source: VWO

It has a pricing structure that offered discounts depending on the number of servers and websites. This pricing model was oriented to single server owners and didn’t cater well most of their customer base that had seven servers on average.

The company decided to test package pricing with the lowest package starting at $99 for 10 servers. there was a drop in prices, because in the old pricing model the price for 10 servers was $130; however, the new pricing model meant to increase the average order value.

Image source: VWO

Thus, they had 24% fewer conversions for free signups but they managed to attract the high-quality audience and increase the total revenue by 114%:

Image source: VWO

4. Map out your pricing tiers

At this point, you will need to sit down, put all the numbers together and start figuring out how are you going to accommodate them in your pricing tiers. We typically recommend starting with 3 or 4 pricing tiers. You can further optimize from there.

If you go for three pricing tiers, you could use the following scheme:

one basic that includes around 40-50% of accounts
one that includes next to 30-40%
and then one that includes the last 10-20%.

For four pricing tiers, we would recommend this:

a basic that includes around 40% of accounts
next up including 30%
then the next level up including 20%
and then the last one including the top 10%.

A bit later in this article, we will line up some other best practices of pricing tier creation.

5. Align your value metric with pricing tiers based on buyer personas

At this point, we have collected the following data:

Customer data (qualitative and quantitative research)
Linked customer data with website personas
Defined value metrics
Defined pricing tiers

Our final step is to use the outputs of the four previous steps to see how our pricing tiers would work with our SaaS personas.

Let’s take a look at the pricing page from Salesforce:

Image source: FunnelEnvy

Salesforce offers 4 different pricing tiers with different features that fit specific target customer. In this case we have: Group, Professional, Enterprise and Unlimited pricing tiers are set to meet the needs of the different types of customers. With each pricing tier there are SF lists with detailed features so potential visitors can choose the plan that suites their needs best.

Now take a look at the Highrise ( a competitor of Salesforce) sales page:

Image source: Highrise

Highrise sets pricing tiers differently while Salesforce offers all of the products on per user basis, Highrise pricing tiers also include multiple user accounts (Up to 6 users, Up to 15 users, Up to 40 users). If you are a company with 40 users, then the cost of running Highrise is 99/month (less than $2.5 per user). Using SF for the same number of users will require a minimum investment of $1,000 and could possibly go up to $10,000/month.

For Highrise the number of users is set as the key value metric. However, companies choosing between the CRM solutions (SF vs. HighRise) might also consider the number of contracts as another value metric.

As you notice, HighRise limits the number of contacts for the different pricing tiers. So, while they provide a great number of seats per pricing level, they limit the different levels with the number of contacts available.

Salesforce approach to the pricing page is different from HgihRise. SF includes a lot of information and details under each pricing tier. HgihRise, on the other hand, is more precise avoiding potential customer confusion that can arise from more choices. Highrise’s pricing page is simple and it takes a few seconds to read all the information.

What conclusions can we make from these pages?

Salesforce is targeting enterprises with a higher number of users and it lists all pricing tier details which are meticulously addressing analytical personas, most likely mid-level management, that have to present arguments for or against certain CRM system to their management. At the same time, HighRise is more oriented on spontaneous personas and small business owners who don’t really want to go into details that much and take decisions based on the value metrics only.

Let’s have a look at another example, LivePerson; a developer of live chat feature that allows companies to talk with their website visitors in real time.

Image source: Process.st

LivePerson pricing page classified four tiers where the value metric is user. The company uses a freemium model where the first tier of the product is free. Each tier comes with different support levels: community support, 24/5 online chat support, and 24/7 online chat support. The support level is a good secondary differentiator.

The way LivePerson differentiate its pricing tiers is simple and logical; the more users on the product, the more it charges. So per user pricing is the primary differentiator. Features like unlimited chats, real-time sentiment analysis, real-time dashboards and mobile & web messaging are secondary differentiators. As you get more users on the LivePerson platform, the price per user increases. (if you buy “2 users” product you need to pay $17.5/user; if you buy “3 users” product you need to pay $21.66/user).

While I was writing this article, LivePerson was testing new pricing tiers:

Image source: LivePerson

They changed their pricing structure dramatically; instead of giving free service to 1 user they differentiated their pricing tiers: for small teams from 1 to 3 people. Still the value metric is the price per person. They set the price of “2 users” product and “3 users” product as almost the same: $47 per person for “2 users” product and $46.33 for “3 users” product.

As mentioned earlier in one of conducted case studies, they are testing package pricing as an attempt to increase the average order value (one user cannot use software for free anymore) and they also limited the free trial period.

Let’s examine Olark, a competitor of LivePerson to see a different pricing strategy:

Image source: Olark

Olark’s pricing tiers clearly define the number of users (referred to as “operators”) as their value metrics. The price per user decreases as the subscriber chooses longer term commitment (monthly vs annual billing).

For SaaS companies, securing an annual subscription provides greater value and more stable revenue. Notice how Olark highlights the value of the annual plan:

The plan is in the middle and hovers over the other two plans
Contrast CTA
Lower price: $15/user
5 stars on top of the plane
“Save 12%” copy

Don’t forget that per user pricing may not be the best option in your line of business. You really should understand the value you provide to your users to define key value metrics that you will use for pricing.

5. Design Your Pricing Page

“Should we display our pricing or should we ask customers to contact us?”

We get this question few times every month. Some companies allow customers to sign up to try their service for free, but ask these customers to contact them when it is time for that customer to convert to a paying customer. The rationale is to hide their pricing from their competitors or let sales rep to come up with the correct pricing when the pricing structure is complicated.

Let me start by saying that trying to hide your pricing from your competitors is foolish. It is nearly impossible to do that nowadays. If your competitor wants to find out your pricing, in most cases, they can do it just by putting a bit of effort.

Image source: SlideShare

Back in June 2014 InsideSales.com, a sales acceleration platform which helps companies to optimize their revenue used to ask the potential customers to fill a contact form.

Image source: SlideShare

In December 2014, the company decided to publish its prices online. They used per user pricing as a value metric. In addition to that, their pricing tiers became simpler and contained a compelling explanation of the product. As of March 2015, the company reached $1.5 B Revenue.

Image source: SlideShare

In March 2016, one and a half year later, they cut the price of the lowest tier “Communicate” from $125 to $95 and kept the prices of other two pricing tiers the same.

So, InsideSales.com went through some changes in their pricing policy. First, they decided to make prices open, then they dropped the price of the lowest tier. Most likely, these alterations, especially making prices public, were caused by changing trends in the market.

There is some logic behind setting out prices clearly for a SaaS product:

You qualify your leads by setting expectations clearly

Setting expectation early is always good for a SaaS Company. Leads can see how much your products cost them, whether the implementation of the products requires experience, what are the options available etc.

You can test your pricing strategy

When information of prices is available for everyone visiting the website you can test price points, package configurations and use messaging which can increase conversion

You can improve you SEO

If we consider that most of the buyers want to know the price at first hand then making pricing public will drive incremental inbound traffic because buyers like to compare prices between different companies.

Define the elements of your pricing page

How you design your pricing page is up to you. But you should remember that users should be able to grasp your value proposition and pricing in 5 seconds.

If you don’t know where to start, you can have a look at these stats.

Price Intelligently analyzed top 270 SaaS Companies in terms of their price policy.

The study shows the number of pricing tiers each company uses:

Image source: SlideShare

In total, 55% of the companies use 3 or 4 pricing tiers.

Image source: SlideShare

In each pricing tier, companies involve a different number of features depending on their strategy. This graph shows that 35% of them use 6-10 features per plan while 31% of them use 1-5 features. The remaining 25% of them use 11-21+ features per plan.

As you see most of the SaaS companies have 1-10 features per plan. Many features can be overwhelming for customers, while few features could cause questions and misunderstanding. You should not baffle your potential customers with too much information and at the same time, you should not leave any space for guessing from their side.

Image source: SlideShare

When it comes to subscription models, the majority of the SaaS companies use only monthly pricing; however, very few of them use annual pricing only. We are big fans of providing users with the option of paying for an annual subscription at a discounted rate.

Here is an example of this:

Image source: Accion

The Majority of the SaaS companies do not use custom pricing. However, by having custom plans you make sure that you do not potentially lose enterprise clients. Enterprise clients come with the benefit of larger revenue and lending more credibility to your business.

Image source: SlideShare

As you can notice yourself: 46% of the companies use high profile clients or testimonials.

Image source: SlideShare

One out of four SaaS Companies include videos on their pricing page. Integration of a video could be a nice idea for further explaining the value of your product and convincing customers to purchase your service. It would be a good idea for A/B testing and to see if it will generate more sales.

Image source: SlideShare

Here our compilation of elements a good pricing page should have:

Three or four pricing tiers: The majority of SaaS companies use 3-4 pricing tiers.
Monthly pricing plans (70% of the companies) or monthly and annual pricing plans (18% of the companies)
Up to ten features per package (66% of the companies): no matter how many features you decide to list, you should keep in mind the following:
- The features you select to show should arise your customers’ curiosity about your product
- The number or the quality of your features should not overwhelm the customers
Around 400 words on the page: Although the word count varies depending on your product, it should be boiled down and the data should be compacted.

Optimize your SAAS page design

1. Use charm pricing

What would we do without Old good charm pricing? Nowadays you rarely see prices ending on 0, most of them are “charmed” and end with 9,7 or 5 creating an impression that the price is smaller than it is (who reads after the first digit anyway).

William Poundstone, in his book Priceless claimed that charm pricing increase sales by 24% on average. But which one is better: 9,7 or 5?

Eric Anderson and Duncan Simester found out in their research that items tagged $39 sell better than cheaper items tagged $34. They also found out that the only thing that can outperform prices ending with 9, is the price emphasizing the original price like on Xero, accounting software, pricing page:

If you look around, you will see that most of the SaaS businesses are actually using charm pricing:

2. Use “useless” pricing plan

Should your pricing plans be all perfectly logical? Not really, if you want to turn your bargain looking audience into value seekers.

Let’s look at Dan Ariely’s famous example: his amazing book “Predictably Irrational”. He came up with the following subscription offer from The Economist:

Image source: Conversion XL

The print and Print & web subscriptions cost the same, 125 dollars. Ariely conducted a study with his 100 MIT students. 16 of them chose option A and 84 option C. Nobody chose the middle option, which seemed to be useless.

So, if nobody will choose the middle option, why have it? He removed it and gave the subscription offer to another 100 MIT students. This is the distribution of their decisions:

Image source: Conversion XL

Most participants chose the first option in the new experiment. So, the middle option played a significant role: it buffered people’s attention and forced them to make a choice. The “useless” middle option turned buyers from bargain hunters to value seekers.

Of course, the data sample was too small to draw any solid conclusions, but it is an interesting point to think about.

3. Highlight your best-converting plan

Use the prime real estate of the page to show the best things you have. In our case, it is the highest-converting pricing plan.

Your goal is to direct the visitors’ attention using subtle clues: CTA color, position on the page, size, badges color of the frame, etc.

Look how Spotify draws attention to the premium plan by using contrast colors of the frame, solid color for CTA, “recommended” copy, and a list of benefits:

4. Tailor plan name and description

When designing a pricing page, you aim to ease the selection process for your future customers. Using just names of the plans like “Business,” “Enterprise,” “Basic,” “Premium,” and so forth might not be enough because they are just words that don’t have anything behind them.

Instead, try to use more descriptive plan names that reflect their target audience like “Small Business”, “Agency”, etc.

It is also a good idea to describe the target audience of each plan in a brief and carefully crafted phrase like, for example, Kashflow did it:

5. Anchor your prices

The term “anchoring” describes the tendency of people to rely heavily on the first piece of information. In pricing, anchoring sells cheaper items by putting more expensive items next to them. Imagine you see a $2,000 watch with $10,000 watch next to it. The $2,000 watch doesn’t seem to be very expensive.

In the example below, Salesforce places the most expensive pricing plan next to three others to highlight the value of the other three plans. Moreover, there is always a chance that some customers will be ready to pay $240 per user per month.

6. Address customer’s fears, uncertainties, and doubts

In most of the cases, your customers want to be sure that they buy a product that works perfectly. When studying your pricing page, they may have some fears, uncertainties, and doubts (FUDs), and your task is to reassure them and remedy all the FUDs right on the pricing page.

One of the ways to do it is to throw in some big names of your former clients: “If company X used it, maybe it would be good for my company too.” For instance, this is what you can see on the Dropbox Business pricing page as social proof:

Another type of social proof that you can use on your pricing page is clients’ testimonials like GetResponse, an email service provider does it:

Then, some of your prospects might still have questions for you. Why not address them straight on the pricing page? Look how Hotjar, a heatmap, polling, and video recording software, did it. They have a FAQs section straight under the pricing tiers:

7. Test

You never know what will actually work for your website visitors. That’s why it is good to test your pricing page just to make sure it offers the best possible experience.

Look at the case study below. A simple change of CTA position on the page made it shine.

RJ Metrics, a data analytics and infrastructure company, had some reservations about its pricing page and the effectiveness of how the value is communicated to it.

They used the number of people in the client’s database as a value metric. The price didn’t depend on how many client employees were using the system, it depended on many customers the client had. They selected this model to avoid any reservations from the client’s side concerning adding more users to the system.

Image source: Crazy Egg

While the page was doing a good job of communicating the pricing strategy, it wasn’t doing much to show the tailored pricing because, at that time, the company’s goal was to serve any client, even the smallest one.

After looking for some inspiration, they discovered Mailchimp’s pricing page for high-volume clients:

Image source: Crazy Egg

Mailchimp requests the user to input the estimated number of monthly subscribers, and then it gives out some options. Visitors were less likely to get overwhelmed with all pricing options that were not relevant to them.

So, to make their pricing look less rigid, RJMetrics changed its pricing page:

Image source: Crazy Egg

62.5% of the visitors engaged on the input field, whereas only 1.2% were interacting with the Sign Up button on the old pricing page.

The Input field in the new design captured the attention of visitors while the Sign Up did not.

RJMetics decided to refine the test and revised the variation so eventually, They:

Moved the Sign Up button above the fold.
Added a headline: “Priced to Scale with You”

The new headline on the page was a clever way of saying: “everything is under your control.”

Image source: Crazy Egg

This challenger beat the original by 310%

Know exactly what’s stopping conversions —and how to fix it.

Over to you

Optimizing SaaS pricing strategy is a hard nut to crack, but it is a must for SaaS success. For SaaS businesses, the main rule for pricing optimization is to understand your customers and transfer them into pricing tiers which allow them to use the features they need at a price they are ready to pay. However, optimizing the essence, one shouldn’t forget about appearances: the way you present your prices is as equally important as the prices you charge.

Editor note: This article was a collaboration of several team members. Special thanks goes to Fatih Boran, Maria Volkova, and Hajar Tarhnchi.

The post AN EXPERT GUIDE TO OPTIMIZE YOUR SAAS STRATEGY appeared first on Invesp.

A GUIDE TO CONDUCTING QUALITATIVE USABILITY STUDIES

Ayat Shukairy — Sat, 23 Sep 2023 13:15:44 +0000

Reading Time: 26 minutes

If you want to build a multimillion-dollar online business, then you must understand how visitors view your website and how they interact with it.

Prior to making changes on your website and before starting any A/B or multivariate test, you need to conduct qualitative and quantitative researches. The data you collect from both types of research help you assess your site for potential problems, areas of weakness, as well as areas of strength.

Over the years, I heard companies claim that they conduct qualitative analysis to understand online visitor behavior. However, when you start digging deep into what these companies are really doing, you discover that they are merely paying lip service to qualitative research.

Why is that?

The fields of qualitative and quantitative research have been used extensively in social and psychological research for over a hundred years. While the literature is rich with books that explain how to use the research for conducting social studies and how to analyze the results, little has been produced in terms of using the research to increase website conversions.

When using qualitative and quantitative researches with the goal of increasing website conversion rates, you need a conversion-oriented approach to plan, conduct, and analyze your research. This approach assures you find valuable insights about your website visitors.

In this post, we will share with you the 3 steps we developed at Invesp, throughout the years, to get the best results from planning, conducting, and analyzing conversion-oriented qualitative research.

What is Qualitative Research?

Qualitative research is the process of observing, analyzing and explaining visitors’ interaction with a website.

With a focus on general user trends, qualitative research attempts to explain how visitors view a website, its offering, and its competitors.

To conduct qualitative research, you interact with website visitors, either virtually or physically, by asking them predesigned questions with the goal of uncovering potential problems on your website.

Among the different methods of conducting qualitative research, you can find focus groups and user testing. Focus groups involves small groups of participants, could be as small as four individuals, who interact with your website while you observe them and ask questions that relate to your offer. User testing involves users completing specific tasks on your website, while you observe them.

Qualitative research goes through three general steps:

Planning the research: you determine the research goal, what questions to ask, what methods to use, how many people will participate.
Conducting the research: you carry out your research and gather data.
Analyzing the results: you analyze the collected data looking for patterns and actionable insights.

“Conducting the research,” step 2, is the easiest. However, the success of your research depends greatly on step 1, where you invest the time making sure that you are asking the right questions to the right people, and step 3, where you analyze the results.

Most companies think that qualitative research is limited to step 2. So, they do not invest the time in thinking through their questions, and they definitely do not invest the time in looking for meaningful insights from their research.

One of the earlier qualitative research projects we conducted was attempting to understand high checkout abandonment rate for a website which sold nursing uniforms. Abandonment rates for un-optimized checkout are usually anywhere from 45% to 80%. This particular client reported checkout abandonment rates close to 82%. Nothing in the checkout explained this above-average abandonment rate.

The team then conducted a usability test. Nurses were invited to place an order with the site while the optimization team observed and conducted exit interviews to gather information from participants.

Most participants completed the checkout process successfully and placed an order with the website without any problem. The test revealed nothing glaring in the website that would explain the high abandonment rates.

Exit interviews, however, revealed the real reason behind high abandonment rates. Participants acknowledged that the biggest problem causing them to abandon the site was their fear of paying too much for an item. Through our research, we discovered that nurses are price-conscious, so if they can buy the same item from other competing websites or bricks-and-mortar stores at a cheaper price, they will do so. So, price played a big role in deciding where to buy a uniform.

Our client was aware of nurses’ price sensitivity. The client offered a money back guarantee and a 100% price match guarantee. The problem was that most of the site visitors landed on category and product pages first, and the company’s price assurances were only displayed on the home page. Therefore, most visitors knew nothing about these assurances.

With both insights, about the visitors’ behavior on price and the problem of price assurances only displayed on the home page, the team added an “assurance center” on the left-hand navigation of the cart page reminding visitors of the 100% price match and the money back guarantee. The new version of the page resulted in a 30% reduction in shopping cart abandonment.

What is Quantitative Research?

Quantitative research is the process of analyzing analytics software data and numbers that relate to visitors’ behavior around the website.

With a focus on numerical specifics, in conducting quantitative research, you set up goals and funnels around the website to understand the different visitor navigation paths.

So, if you are in an e-commerce website, you setup several funnels in your preferred analytics program. These funnels should include (but are not limited to):

Homepage to top level category pages;
Top level category pages to mid-level category pages;
Bottom level category pages to product pages;
Product pages to cart page;
Checkout process.

Let’s take the checkout process funnel. The goal of this funnel is to track how visitors navigate through the different steps of your checkout process. This funnel will also provide you with the checkout abandonment rate which shows the percentage of visitors who start the checkout process but never finish it.

If you are a lead generation website, you will also setup several funnels to track visitor navigation around your website. These funnels should include:

Homepage to offer pages;
Offer pages to contact form page;
Offer page to supporting pages (for example from your services pages to your blog post pages).

The Difference Between Quantitative and Qualitative Research

Quantitative and qualitative research complement each other because they provide different results:

While quantitative research uses general data on all the visitors of a website, qualitative research focuses on a very small set of website visitors.
Quantitative research does not concentrate on the complexity of the human interaction with the website. Qualitative research, on the other hand, produces small, narrow-focused, but rich data.
By its nature, quantitative research produces general patterns for visitor interaction with the website. Qualitative research tries to deduce patterns of visitors’ interaction with the website; however, it strives to explain the variance in collected data.
Quantitative research is focused on the what. It analyzes data to determine visitors’ behavior on the website. Qualitative research focuses on the why. It tries to explain why people behave in a specific way.

There is a tendency to assume that qualitative research supports the findings of quantitative research. That is not the case. Each research stands on its own to explain the visitors’ behavior and the reasons for their behavior.

Both qualitative and quantitative research should produce valid findings that drive actionable marketing activities. We do not believe in conducting research for the sake of research. You want meaningful and actionable insights that you can implement on your website and in your marketing campaigns.

Should you start with quantitative or qualitative research?

Quantitative research tends to point out possible potential problems, and aids in the designing of our qualitative research questions and scenarios. Your quantitative data might tell you that you have a problem in product pages and that not enough people are clicking on the add to cart button, while your qualitative research will help you dig deeper and go beyond product pages trying to understand where the problem is initiated.

What Do You Need to Conduct Qualitative Research?

Conducting qualitative research requires a skillset that is quite different than the one required for quantitative research.

We noticed over the years that many analytics and online marketing professionals are good with numbers, but they lack the skills and the critical eye required to understand how visitors view a website and interact with it.

Quantitative research is your attempt at understanding “what” questions. Qualitative research is your attempt at understanding “why” questions.

To be successful in conducting qualitative research and analysis, you will have to train yourself on the following skills:

Real interest in understanding why visitors behave in a certain way on a website;
Ability to ask questions and critically analyze human behavior, so you never take things for granted;
Analytical eye and ear, as well as ability to think quickly on your feet, listen to what people are saying, and as a result, question further.

As you go through the process of conducting your research, you will find yourself always asking questions and seeking answers to them.

You can find three types of questions in qualitative research:

Your research question(s): what you are trying to find out;
The question you ask participants to generate data (NB: only in qualitative research that collects data from participants);
The questions you ask of your data, in order to answer your research question(s).

Step 1: Planning Your Qualitative Research

Most companies jump into conducting qualitative research without any proper preparation. Thus, they create surveys, and interview customers or launch exit surveys, but they ask all the wrong questions.

And when you ask the wrong questions, you will collect the wrong data from participants. You cannot use the wrong data to draw reasonable and actionable insights.

As you plan your research around your website, Virginia Braun and Victoria Clarke, in the book Successful Qualitative Research: A Practical Guide for Beginners, suggest asking the following questions:

What do I want to know?
Why do I want to know it?
What assumptions am I making about research, and knowledge (what are my theoretical and methodological positions)?
What type of data would best answer these questions?
What type of data will I use to tell me what I want to know? (The answer to this and to the previous question is not always the same)
How much data will I need?
How will I collect my data?
If my research involves participants: Who will I need to collect data from?
How will I access and recruit those participants?
How will I analyze my data in order to answer my questions?
What particular ethical issues do I need to consider?
Are there any pragmatic or practical factors that I need to take into account?

a. Identify the Goal of the Research

Before you start thinking about the questions you want to ask participants, you should clearly identify the goal of the research.

Your research goal is vital and will impact all aspects of your research. You can identify your goal with one single question that the research tries to answer. When you determine the research question, you are able to classify the questions which you will ask in your research.

So, what are you trying to accomplish by conducting the research? Are you casting a wide net such as “why is my website not converting?” Or are you taking a very narrow approach, as “how effective is the search functionality of my website?”

It is our experience that focused research topics will drive more focused analysis and better results.

A good approach is to sit down with your team and think of four to eig
ht possible wide research topics or questions that you want to answer. You then take each of these topics and break them into smaller topics. That will drive more focus to your work.

For an e-commerce website, you can think of the following sample research goals:

How do you potential buyers go about locating and ordering an item that you carry?
What barriers do potential buyers see to placing an order with your website?
What factors influence potential buyers when buying an item which you carry?
What is the visitor experience using the search function of the website?
What is the visitor experience locating a product on our website using website search?
What is the visitor experience locating a product on our website using website navigation?
What is the impact of using price incentives on reducing visitors’ anxieties around the website?
What is the impact of using urgency incentives on reducing visitors’ anxieties around the website?
What is the impact of using scarcity incentives on reducing visitors’ anxieties around the website?
What information do the visitors need to see on the product page to be persuaded to buy?
What information do the visitors ignore on a product page and consider non-relevant?
What are the factors impacting visitors completing the checkout process?
What factors can enhance visitor engagement on product pages?

Again, all of these could make good goals for your research.

For a lead generation website, you can think of the following research questions:

How do potential buyers go about locating and choosing a vendor in your space?
What factors influence potential leads when locating a service that you offer?
What barriers do potential buyers see contacting your website?
What is the visitor experience locating a particular service you offer on your website?
What is the visitor experience as they land on your homepage vs. competitors’ homepages?
What is the impact of trust factors on reducing visitors’ anxieties around your website?
What is the impact of using research on enhancing visitor trust reducing anxieties?
What is the visitor experience in learning more about your company history?

These research goals are not comprehensive by no means.

However, these should give you a way to start thinking of potential goals for different research you should carry on your website. Notice how each research goal can drive actionable insights that can be implemented to enhance the visitor experience.

b. Select the Research Method

On top of guiding the actual questions you will ask participants, your research goal is fundamental in defining the method of research you will conduct.

You can use many different research methods, but there are four main ones we use in conducting qualitative research for online marketing:

One-on-one (or in-depth) interviews: As the name suggests, you will conduct one-on-one interviews with existing or potential customers asking a pre-set list of questions and getting an in-depth knowledge about their personal experience. You, for instance, can ask people that call in to the call center of whether or not they would like to partake in that sort of activity.
Focus groups: these are moderated group discussions where the moderator directs and leads the discussion.
Usability studies: you ask participants to complete a list of tasks on your website (or a competitor website).
Surveys: you ask participants to answer a set of questions to reveal their feelings around the research topic.

We will get into more details about each of these types and how to use them correctly.

So, which research method is right for your situation? This will depend on your research goal. One-on-one interviews are great in understanding how the participant feels about a particular product or service. They provide a deep insight into the participant views.

Focus groups allow for an open discussion among participants which provide a wide range of views on your market or website. Focus groups are an excellent tool to understand general issues which potential customer might have buying your offer.

Usability studies are best suited to observe the participants using a particular website functionality. They are not a good method if you are trying to understand general market trends and issues.

Finally, surveys allow participants to provide insights into both general market issues as well as specific website functions. However, due to the fact that participants answer questions either on a paper or virtually, getting an in-depth knowledge using surveys is difficult.

c. Design Your Research Questions

The number of questions you should ask varies based on the setting and method. So, website exit surveys should not have more than 6 questions. Web usability studies can have multiple tasks and questions (up to 15). Focus groups and one-on-one interviews allow for more questions.

Anyway, each question you ask should relate to your research goal.

Let’s assume that you run an e-commerce website that sells cell phone accessories and that your research goal is to understand the visitor experience locating a product on our website using website search.

This type of goal lends itself to a usability study where you ask participants to locate an item on your website using the search function.

When conducting the usability study, you can either:

ask participants to locate an IPhone 7 hard cover case using the website search function;
ask participants to locate a specific model (model name) using the website search function;
ask participants to locate cell phone hard cover case for their own phone using the website search function.

Each of these represent a valid research task and they will most likely produce different insights.

As the participant uses the search function, to complete your usability study, you will ask him:

How easy was it to locate the search bar?
How do you like the layout of the search results?
Is there any information that is missing from our search results page?
Can we enhance our search results page?
Is there unnecessary information on the search results page?
Do the search results displayed make sense?

You should carefully observe the participant as he completes the given task:

Is the participant able to complete the task successfully?
How fast is the participant able to complete the task? Was he able to complete on the first run or did it take him multiple tries?
Did the user click on items which you did not expect him to click on?
Did he use change the default sorting functionality?
Did he have to click to 2^nd or more pages of the search results?
Did any of the steps in locating and placing an order for the item seem confusing?

d. Recruit Participants

Depending on the research method you choose to conduct, you have different options of finding and recruiting participants, but you should always pay close attention to finding the participants who fit your research criteria.

If your target market is black females aged 30 to 45 and you end up recruiting white males aged 20 to 30, your research will fail miserably.

Finding the right participants should not be too complicated. You need to do the following:

Start by identifying your ideal research participant;
Determine where ideal candidates usually hang out (physically or virtually);
Choose the proper way to reach out to them and ask them to join;
State very clearly to each participant the goal of the research;
We recommend having each participant sign a waiver form that allows you to completely own the result of their data.

Different research methods provide a different way to recruit participants:

Usability studies: You can use one of the multiple websites that offer usability study services. Another option is to target website visitors and ask them to join your usability study. Finally, if you know a location (physical or virtual) where potential participants hang out, you might post an ad there asking for people to join.

Surveys: You can target your own email list asking those who joined it to answer the survey. Some surveys are better answered by people who converted on your website within the last 30 days. Other surveys are best answered by those who never converted.

One-on-one interviews & Focus groups: You can recruit participant for one-on-one interviews by either targeting your own website visitors or by identifying where ideal candidates hang out and reaching out to them there. A recent client of ours conducted 30 one-on-one physical interviews by targeting their website visitors and inviting them to join the research.

As you recruit participants for one-on-one interviews as well as focus groups, beware of data saturation. This happens when adding more participants does not provide any additional insights rather just emphasizes the same results.

Should I Offer Research Participants a Compensation?

There is a lot of debate around compensation for research participants. The fear is that some participants might not provide accurate insights if they receive compensation. While this might apply to social research, we have not seen this impacting our research findings in the last 10 years. Some of the forms of compensation you can think about:

Offering participants a gift certificate they can use on your website (anywhere from $10 to $20);
Offering participants a chance to win a gift certificate from a large retailer ($100 Amazon gift certificate). In this case, you draw a single winner from the pool of participants.

Sample Size and Diversity for Qualitative Research

In the book Qualitative Research & Evaluation Methods, Michael Quinn Patton indicates that “there are no rules for sample size in qualitative inquiry”. However, Virginia Braun and
Victoria Clarke suggest in Successful Qualitative Research: A Practical Guide for Beginners:

“Qualitative research tends to use smaller samples than quantitative research. Sometimes only a single participant or text is analyzed in depth”

For one-on-one interviews, we typically recommend a sample size of 30 participants. For focus groups, 4 to 6 groups could satisfy what you are looking for.

Keep in mind, that using 4 different focus groups (with 6 people in each) provide 4 data points. It does not provide 24 data points!

Another important criterion when selecting your participants is that you select a diverse group.

As cited by Virginia Braun and Victoria Clarke, Margarete Sandelowski explains:

When qualitative researchers decide to seek out people because of their age or sex or race, it is because they consider them to be good sources of information that will advance them toward an analytic goal and not because they wish to generalize to other persons of similar age, sex, or race. That is, a demographic variable, such as sex, becomes an analytic variable; persons of one or the other sex are selected for a study because, by virtue of their sex, they can provide certain kinds of information.

Step 2: Conducting Your Research

Now that you have identified your research goals, the appropriate method, with the questions you want to ask, and have recruited participants, you are ready to carry out the actual research.

One-on-One Interviews

Conducting one-on-one interviews requires you to prepare a list of questions that you want to ask the participant. However, you should not follow the questions to the letter. This method of research allows you more freedom based on the responses of the interviewee. As you listen to the interviewee, you try to understand his feeling and rationale when he is interacting with your website or buying an item that you carry (either from you or a competitor).

You can conduct interviews either physically or virtually. However, to get the most out of these interviews, we recommend conducting them physically. If your circumstances force you to conduct interviews virtually, then we suggest you turn the camera on, so you can see the participants facial expressions.

Just like with any other type of qualitative research, you must invest time in preparing for the interview. Create a list of topics and questions that you plan on asking during the interview. Since you want to hear personal feeling from the interviewee, it is good to establish trust and rapport initially, so they can feel comfortable answering your questions.

We like to start our interviews by asking the participant to tell us a bit about him or herself. We can then move to asking the questions which are planned for the interview.

Make sure that you listen carefully to what the interviewee is telling you and pick up on any queues he or she gives you. Remember that the questions, which you prepared, are not set in stone.

At the end of the interview, we recommend asking a question such as: “Anything else you want to add?” or “anything you think we should think about which we have not discussed?”

Sample script for an e-commerce website that sells cell phone accessories can look like this:

You meet the interviewee and introduce yourself. You first explain what you are trying to accomplish with the interview. For example, you might say, “I am trying to understand how people shop for cell phone accessories and what factors they consider when buying one.”

To start with, can you tell me more about yourself?
Can you tell me how often do you buy a new cell phone?
How do you decide on which cell phone do you buy?
Typically, cell phone carriers offer accessories at the shop when you get a new phone, do you usually take them up on their offer? Why (if yes or no)?
What places do you think about when you need to buy a phone accessory?
Do you think that getting original cell phone accessory will impact its quality?
Can you tell me about the last time you bought a cell phone accessory?
Did you encounter any problems selecting your cell phone accessory?
Do you buy any cell phone accessory for your family members?
What advice do you give to anyone needing to buy a cell phone accessory?
Is there anything else you would like to add?

These are sample questions. You can adapt the questions to meet your specific situation and website.

Final recommendations for one-on-one interviews:

We recommend taking notes during the interviews as well as recording them (both video and audio).
Since the interviewee is donating his or her time, try to accommodate a time and a place that works well for him.
Avoid loud places where it is difficult to focus.

Focus Groups

Using group discussion is another way to learn more from your potential website visitors. Focus groups are excellent in getting a wide range of opinions and behaviors on a certain topic.

You may have seen or heard of this type of research conducted during political campaigns. Using it for marketing can produce significant results. In a survey on 261 companies, 47% of them cited that they had used focus groups; 81% of consumer goods companies in the respondents indicated that they used focus groups, followed by 61% of firms in the marketing research field; 79% of consumer goods companies indicated the use of one-on-one interviews while 91% of marketing research firms indicated that they used one-on-one interviews.

Similar to one-on-one interviews, you prepare a list of topics and questions that you will present to the focus group. Focus groups use a guided discussion with you playing the role of a moderator, asking questions and directing the conversation.

While you can conduct one-on-one interviews physical or virtually, focus groups must be conducted physically to get the best results out of them.

Focus groups should not include more than 6 to 8 participants. Anything more than that could easily allow the discussion to get out of hand, and the moderator to lose control.

One consideration when conducting a focus group is the mix of people who will participate. Let’s say you are trying to target three different market segments. Should you include people from each segment in one focus group or should you conduct one focus group per market segment?

There is no correct answer here and it will depend on your particular situation. Do you think that having three different groups will provide you with different information? If the answer is yes, then it is obvious that you should conduct three different ones. However, if the different focus groups will turn up the same information, then there is no need to conduct three of them.

Some of our clients discuss the statistical significance of focus groups. We do not think of them that way. We think they provide qualitative insights away from statistics. You can later validate your findings using quantitative research or split testing.

Do not to confuse focus groups with one-on-one interviews. Conducting three focus groups with 6 participants in each is not the same as conducting 18 one-on-one interviews. By their nature, focus groups do not provide in-depth personal knowledge about participants.

Usability Studies

When you observe users completing different tasks on your website, you can better understand how visitors interact with different website elements.

As the name suggests, usability studies provide great insights into users interacting with your website. They are not meant for understanding general market trends.

Several services available online allow you to quickly recruit participants and conduct user testing on your website. However, conducting a physical study produces better results.

We recommend starting your usability study by selecting the correct type of user you want to participate in the study.

You can choose to run a usability study on a wide topic, such as placing an order from your website, or on a narrower topic, such as using the website search function to locate an item.

Our recommendation is to conduct several narrow usability studies on your website to gauge how visitors are interacting with the site at different points throughout the process.

In addition, we recommend running the same usability study on your top three to five competitor’ websites.

If you run paid search campaigns, ask the users to simulate taking the action that will trigger both your ads as well as competitor ads to display and then to click on them and follow the conversion path of your website.

With the prominence of mobile devices, we highly recommend running the same test for both desktop and mobile websites.

Finally, make sure to ask participants questions about their general perception of your website after completing the usability study.

Case Study:

After beginning a project and having initial CRO discussions with a client in the homeware business, we conducted some qualitative research in order to show them some of the concerning trends we were seeing from the quantitative side.

We conducted a usability testing through a user testing website. We wanted users to take advantage of the savings on the website, and purchase an item from the clearance section: 100% of the visitors did not see the huge banner that took up about a quarter of the top of the homepage to go directly to the clearance section. All of them struggled to complete the task. This was alarming because the company had spent so much time and effort on creating the marketing materials and banners on the website.

Surveys

When you run a survey, you ask participants to answer a list of questions that relate to your research goal.

Surveys are excellent in providing large dataset which you can analyze to understand user perspective on your market, website, products or services.

When selecting participants for your survey, consider the following segments:

Everyone who joined your email list: these are people who are interested in what you have to offer. The email list provides a mix of participants between those who might have converted and those who did not convert.
Everyone who converted within a certain time period: converted users provide great insights into what works and what does not work on your website. For an e-commerce website, those who converted within the last couple of weeks provide the best data set (if there are enough of them).
Everyone who never converted: non-converted users can help you understand what stopped them from converting and what additional elements you need to add or modify on your website.

For an e-commerce website, you should consider the following possible groups for your survey:

Customers who placed a single order with your website
Customers who placed 2 – 4 orders with your website
Customers who placed more than 5 orders with your website
Customers who placed orders with low average order value
Customers who placed orders with high average order value
Customers who specifically buy a certain category of products that you carry

How Many Questions Should I Use in My Survey?

When creating a survey, gather as much relevant data as possible. Lengthy surveys, while they seem attractive since you are “getting” more data, have a less chance of getting completed.

So, what is a good response rate for your surveys?

MarketingSherpa, posted the following response rates:

For prospects, a respectable click-to-completion rate is between 1% and 5%
For customers, the click-to-completion rate should be anywhere from 20% to 55%
For a consumer marketer, open rates are typically above 15% and click-to-completions greater than 25%

Best Practices for Getting the Most of Your Online Surveys

1. Group your questions

As you prepare the list of questions you want to ask participants, group them in different themes. Each theme will present a list of questions that dig deep into the topic from a different perspective.

One theme might ask participants about the general market information. Another might ask participants about their shopping behavior. A third, might ask about their interaction with your website or service.

2. Keep It short

Don’t go overboard with the number of questions you ask participants to answer. Our recommendation is to not exceed 30 questions. We typically like to group these into 4-5 themes. As you design your survey, make sure to layout the survey on multiple pages. Each page covers one of the survey themes.

Also, make sure that the survey software you are using is collecting data as participants complete each step. So, even if a user fills out two pages of the survey, then that data is still stored and collected.

3. Only ask important questions

Many marketers go overboard with asking too many questions when creating surveys. As you add each question to your survey, make sure that it relates to the goal of the research you are conducting.

Evaluate each question in your survey with the, “so, what?”, question.

“So, what” if I know the participants does not think of pricing when buying this item?

“So, what” if I know that participants only shops for this item offline?

“So, what” if I know that participants do not know what makes an offer a good deal?

Notice how each of the questions above will give you actionable insights you can implement on your website.

4. Pay Close Attention to Email invites

With online surveys, you will use email to invite participants to answer your questions. Pay close attention to every little detail in your email invite.

Use a strong email headline

Your email headline is the first chance to convince visitors to open the email. Strong headlines focus on the benefits or results which the user will get from participating in the survey.

Personalize your email by using the participant’s first name.

Personalization of the survey increases the chances of getting more responses. This will of course depend on how much data you have on your participants. You can use the participant’s name in the subject of the email as well as the body of the survey.

Let the visitor know how long it will take to complete the survey.

Letting visitor know that it will take less than 3 or 5 minutes to complete the survey will also increase your chances of getting more clicks to the survey.

Use a strong and nicely designed call to action button.

Needless to say that your email should have a nicely designed CTA inviting email readers to click to the survey. We recommend having at least two CTAs in your email:

One is a text call to action;
The other, an image (button) call to action.

The reason you use a text call to action is that many online email services will block your images from downloading. So, if you use only an image CTA, readers of your email might not see the CTA.

Let’s take couple of examples of surveys:

Tempo timesheets sent me this survey after we decided to switch to another service.

The survey does few things right:

It uses my first name.
It uses a nicely designed CTA.
It lets me know that it will take less than 3 minutes to complete.

Notice this survey from a sales training course:

While the email subject is good, notice the few problems in it:

The images are not displaying in this email (due to me using Outlook).
The body of the email uses paragraphs that are not well formatted.
The CTA does not appear above the fold.

5. Incentivize participants

What will participants get from answering your survey? Using incentives with email surveys will increase its response rate. There are several ways to encourage participation in the survey:

You can offer a small gift certificate or a discount code to everyone who completes the survey.
You can offer a one lucky participant a large gift certificate.
You can offer participants first access to the results of the survey.

6. Test Everything about Your Survey

Everything in your survey should be tested.

To start with, you should test your email invite. At a minimum, you should test:

Different email subjects;
The body of the email;
The calls to action in the email;
The delivery time of the email.

When it comes to the actual survey, at a minimum you should test:

Survey designs;
The number of questions you ask on the survey;
The wording on different questions.

Step 3: Analyzing Research Results

Now that you have collected the data from your research, the next task is to start the analysis phase. The analysis phase has two main components to it:

Transcribing data;
Data-mining results.

Transcribing Your Data

If you conducted one-on-one interviews or focus groups, it is important that you transcribe all the data you collected.

Having transcripts of different interviews, you analyze them and look for different themes in them. While transcribing sounds looks like a straight forward task, there is a bit more involved.

Why?

Because not only do you have to capture the words which participants use but also attempt to capture their state of mind.

A participant might pause or might not be too certain when saying something. That will definitely impact how you understand that data. Capturing these emotions is the biggest challenge.

We recommend transcribing in two different stages:

Transcribing the audio recording: hiring a professional transcription service or a freelancer will do the job. We have been using the same freelance transcriber for years. Her job is to capture the data from our audio recording as close as possible. There are several companies that offer this service or you can use a website such as Upwork to find a reliable transcriber. At the end of this task, you should have an initial transcript.
Video is even better: If you can video record focus groups and one-on-one interviews, it will give you the 360 view you are looking for.
Transcribing the emotions and verbal queues: in this phase, you take the transcript produced in step 1 and listen to the recording again. Your goal is to add the emotions to the conversation. If you don’t have video, this will all be from memory. Look for instances such as:

Laughing or coughing;
Certainty;
Uncertainty;
Identify pauses;
Non-verbal utterances;
Emphasis of certain words.

You should use some sort of a coding system to identify any of the above emotions or verbal queues.

Data-Mining: Looking for Insights

Well-designed and professionally conducted research provides you with a wealth of data on your market trends, market segments, visitors’ impressions of your business, and users interaction with your website.

When you are analyzing the results of qualitative research, you are data-mining the results with two goals:

Identify data patterns;
Determining actionable insights.

Getting Intimate with Collected Data

The process of data mining starts by familiarizing yourself and your team with the collected data. This typically means listening to interviews and reading scripts with the team multiple times.

We typically ask our team members to do two read-outs of each transcript. The goal is to start internalizing the different opinions of participants.

After completing the two initial readings, you will do two more readings but this time you start underlining and putting your thoughts around what participants are saying.

There is no right or wrong answer here.

What one team member may underline or notice, no else on the team may pay heed too. The goal is to start putting initial thoughts. Each team member is capturing their personal views of the participants.

Coding the Transcripts

The next stage is to start coding different parts of the interviews. This is typically a group exercise where we read the transcripts aloud and start coding different sections of what the participants are saying.

Since we use the Conversion Framework for data analysis and determining conversion problems, we code what participants are saying to different elements of the conversion framework.

Let’s take the following example from a focus group where participants were discussing buying toner ink for their printers:

What participant is saying	Coding
I am worried about paying too much for the toner ink	FUDs (fears, uncertainty, doubts)
It is faster to just drive down to best-buy and pick up the ink from there	FUDs (fears, uncertainty, doubts)
Yeah, I can wait on ordering the item, but I like taking the break from the office and just going out to buy the toner	Engagement
The problem is that so many online stores offer the toner and their prices all look comparable	Trust (value proposition)
The problem is, ehh, I heard that that non-original toner ink will break down the printer	FUDs

You can code either the whole transcript or you can code a portion of the transcript.

Defining Themes & Looking for Patterns

After finishing the coding process of the transcripts, the next stage is to look for different themes that appear in our data.

While there are different approaches to data analysis, we recommend using a thematic analysis for online marketing.

In this thematic analysis, we are looking for themes that appear in different datasets. Virginia Braun an Victoria Clarke, in “Using Thematic Analysis in Psychology,” tells us that a theme:

“captures something important about the data in relation to the research question, and represents some level of patterned response or meaning within the data set”.

So, a theme combines different codes looking for consistent patterns in them.

One question we get with clients as we work on creating different themes from data is how many themes we should create. There is no correct answer to this question.

We have worked on projects in which we are able to identify 4 to 5 themes. We also worked on projects where we identified up to 8 different themes.

The only rule we have is let the data guide you.

Some themes tend to intersect with each other very closely. Think of general theme around trust factors on a website. At the same time, another theme might be anxiety producing factors on a website. It is natural that the lack of trust factor will increase visitor anxiety. So, how would you classify lack of trust factor? You can classify it under the trust theme and at the same time you can classify it as an anxiety theme.

Deep Analysis and Marketing Insights

This will be the final stage in your research. At this point, you have a lot of data that you have collected. You have results from your research methods, coded transcripts, themes and patterns.

The final step is to put all this data together and start looking for actionable marketing insights.

Some companies and consultants like to conduct research for the sake of research. That might be fine, if you have the luxury to do so. Most of the time that is not the case.

Our research should produce specific items that will impact on how we design a website or structure a campaign.

To deduce actionable marketing insights from the research, approach your findings with a deep analytical eye.

Again, let the data guide your findings.

While you might have preconceived notions on the research subject, the goal from the research is not to prove that you are correct. The goal from the research is to discover deep insights from your participants about the research subject.

The post A GUIDE TO CONDUCTING QUALITATIVE USABILITY STUDIES appeared first on Invesp.

How to Create a Robust Conversion Optimization Strategy?

Ayat Shukairy — Thu, 31 Aug 2023 13:20:44 +0000

Reading Time: 10 minutes

Too many companies jump into conversion rate optimization without a real conversion optimization strategy or a methodology to identify candidate areas of optimization. Very often, the process is too simplistic and does not consider website visitors in a meaningful way.

CRO is a comprehensive process that only succeeds when it involves two elements:

Identifying areas of the website that should be optimized
Following a repeatable process to optimize these areas

If you don’t recognize the leaky holes in your site and don’t apply the right methodology, your optimization efforts are destined to fail.

When optimizing your site for conversions, you can’t just start anywhere.

Random guesswork will lead to wasted time, effort, and money, on top of producing unreliable results. Well, that is the exact opposite of what you are looking for.

In the short video below, Khalid sums up the steps you should take to plan a successful conversion optimization.

Video – How to Determine Conversion Problems on a Webpage by Invesp

This chapter of our guide walks you through seven key tasks, to help in identifying poor-converting areas of your website and also the benefits of a conversion optimization strategy.

In the next sections, you will learn about:

Identifying your website conversion goals
Prioritizing your website conversion goals
Recognizing and tracking conversion paths
Detecting macro and micro funnels of conversion
Observing the primary goal of each web page on your site
Tracking your visitors’ behavior with an analytics program
Calculating your website conversion rate

You will find four exercises to answer throughout the chapter. With each answer, you will gain better insights into your website.

1. Identify Your Website Conversion Goals

You must start conversion optimization by identifying the primary goal of your website.

This seems simplistic, but in reality, any business tries to achieve different goals from its website.

Take, for example, the giant retailer Amazon.com. At some point, they were a pure e-commerce website with a primary conversion goal of selling the items they carried to their visitors.

However, if you carefully look at the site, you notice it has competing goals. Some of these goals include:

Provide a marketplace for other retailers who offer products that Amazon itself carries and sells.
Sell prime memberships.
Capture visitors’ emails to convert them at a later stage.
Strengthen the Amazon brand in the minds of visitors.

Typical conversion goals for an E-commerce website include:

Capturing visitor orders
Capturing a visitor’s email address
Allowing customers to download product manuals
Allowing customers to locate nearby stores
Allowing customers to create a registry or add-to-wish list

A lead generation website might have the following conversion goals:

Capture visitor information as a lead.
Allow visitors to call a business
Allow visitors to download white papers or research.

> Exercise 1: List the top goals you are trying to achieve from your website.

2. Prioritize Your Goals

After you recognize all the goals of your website, your next step is to identify a value to each of these conversions. It is easy to associate a numerical value with a customer placing an order on an e-commerce website. But what would be the value of getting an email address?

To prioritize the distinct conversion goals of your website, answer the following questions for each goal:

Is there a clear metric to measure this goal?
What is the business value of this goal?
Can you assign a dollar value to this goal?

Questions 2 and 3 appear similar, but they are different. A goal might have a high business value that is difficult to qualify as a dollar value.

Why is the exercise of prioritizing conversion goals for the website necessary?

As you begin to increase conversion rates for your website, these competing goals will occasionally conflict with each other. Prioritizing the site goals from the start will save a lot of heartache and discussions later on.

> Exercise 2: Prioritize the conversion goals you identified in Exercise 1. Assign a dollar value to each goal.

3. Identify and Track The Conversion Paths

Your next task is to track different conversion paths visitors must go through before they convert on your website. You need to track:

The unique page(s) on your site a visitor must go through during the conversion process

The final conversion page is reached when a visitor converts

Let’s take a couple of examples:

For an e-commerce website, an order (conversion) only happens when a visitor views a product page, goes through the checkout process, and arrives at the order confirmation page. In this case, we track:

Product pages, cart pages, and checkout process
Order confirmation page

For a lead generation site, a conversion only happens when a visitor views the “contact us” page, submits personal information through that page, and reaches a “thank you” page. In this case, we track:

“Contact Us” page
“Thank you” page

> Exercise 3: Identify the different pages a visitor must go through when a conversion takes place on your website.

4. Detect Macro Conversions and Micro Conversions

By now, you know your goals and conversion paths. Let’s move on and figure out your site’s specific micro conversions.

Macro conversions are the overall or ultimate conversions of your website. In contrast, micro conversions are the smaller steps or conversions a visitor must take to achieve a macro conversion.

While your website has one primary macro conversion goal and several secondary goals, remember that your visitor must always go through a series of many smaller steps (micro-conversions) to convert.

In a lead generation website, a visitor fills out a “contact us” page, probably after going through the home page, looking at the services page, and, in consequence, clicking on the “contact us” page link.
In a subscription website, a visitor subscribes and provides you with his details, probably, after going through your home page, looking at your offer pages, and following with a click on the subscription page.
In an e-commerce website, a visitor buys an item from your website, probably after going through your home page, looking at your category pages, clicking on a product page, adding it to your cart, and then completing the checkout process.

The steps your visitor goes through before a macro conversion form a series of micro conversions.

To get to the big “Yes,” your visitor must go through a series of smaller “Yeses.” At any point, the visitor might abandon the website and exit the conversion path.
Your task as a marketer is to identify all the possible paths visitors go through or follow on your website.

Here are five micro funnels for an e-commerce website:

From the homepage to category pages
From a top-level category page to a child category page
From a child category page to a parent category page
From a top-level category page to a product page
From a bottom-level category page to a product page

> Exercise 4: Identify 15 possible funnels your visitors go through on your website.

5. Evaluate Conversion Problems On Your Web Pages

Now that you have a list of your website goals, the conversion paths of your visitors, and all macro and micro conversions, as you start looking at individual pages, you will notice that each page supports one or more of your conversion goals.

While a website might have multiple conversion goals, and a web page might support more than one of these goals, a web page should have only one primary conversion goal.

The core focus of each web page should be its primary conversion goal.

Web pages on the site can be divided into:

Landing Pages:

These are the entry points to your site. If you are running a PPC or ad campaign, you choose and design the landing page(s) for the campaign. However, users can find your site by conducting a search on a search engine. When they do, you have no control over which page they land on. This means all pages on your site are potential landing pages and must be built to convert visitors.

Offer pages:

These are the pages that outline your offering and show visitors the solutions to their needs. For an e-commerce website, offer pages are category and product pages. For a lead generation website, offer pages are the ones where you explain your offer.

Here’s an example of a category page from Eton Shirts:

The red indicator above shows the primary category page that houses other sub-categories.

The page below is the linen-specific category page.

Support pages:

These are the pages that answer visitors’ questions, clarify any confusion, and alleviate any fears that visitors may have about deciding to purchase.

Here’s an example from Gymshark;

The top of the screen has a search bar that allows you to input any word or phrase to speed up your search.

The bottom of the page has FAQs grouped together in a beautiful way.

Conversion goal pages:

Suppose you’ve got an eCommerce site. A user either lands on your site from an ad or via organic search.

As the user starts navigating your site, they land on your product page. Let’s say he has questions about shipping policies, contact numbers, and how to use a product. He’ll look for your FAQs if your product copy doesn’t have the answers.

When this user adds an item to a shopping cart, he is taken to a checkout page, which is the conversion entry page.

As he completes the purchase, he is presented with the “thank you” page or the conversion goal page.

On the thank you page, you could offer upsells/cross-sells, discounts, and links for purchasers to follow you on social media.

6. Track It All

After you identified the different paths your visitor follows inside your website, your next task is to track them using your favorite analytics program.

Among the many analytics programs available on the market, choose one that fits your needs. We have no preference here. We recommend, however, using two different analytics programs for website tracking purposes.

Here are some analytics programs that you can consider:

Google Analytics
Piwik
Clicky
Kissmetrics
Mixpanel
Omniture

7. Calculating Your Website Conversion Rate

You should track several conversion rates on your website. Each will provide insights into the effectiveness of your website.

Overall conversion rate

A site’s conversion rate is equal to the total number of conversions in a specified period divided by the total number of visitors (sessions) the site received during that same period.

So, if you receive 200,000 sessions in one month and you get 20,000 orders in that month, your conversion rate is = 20,000/200,000 = 10%.

Path conversion rate

The path conversion rate tracks the conversion rate of a specific path visitors take on your website. For example, in an e-commerce website, you can track category pages’ conversion rates. This will be calculated as follows:

Category pages’ conversion rate = number of visitors to category pages/number of conversions from these visits.

In addition to the above conversion rates, it is important to track the following:

Average Visits to Purchase

This metric tracks the average number of sessions it takes a visitor to convert (from the first website visit to the actual purchase visit).

Average Days to Purchase

This metric tracks the average number of days it takes a visitor to convert (from the first website visit to the actual purchase visit).

Analytics expert, Avinash Kaushik, explains the importance of the two metrics, “days to purchase” and “visits to purchase,” and how to measure them.

Before moving to the next section, here’s a video on how to plan a conversion optimization roadmap.

Benefits of a Conversion Optimization Strategy

Now you’ve gone through 7 ways of identifying poor conversion areas on your website. We’ll take a look at the benefits of a conversion optimization plan.

1. Get to understand your customers better:

The more you dive into CRO and evaluate your website for conversion weak spots, the more you’ll learn about your customers and online visitors. Why they visit your website, and what they seek to achieve.

You’ll learn all these by running polls and surveys, viewing heatmaps and session recordings, conducting JTBD interviews, etc.

2. Lower your customer acquisition costs:

This works in two ways. As you get to know your customers better, you know what messaging works with them and what they resonate with.

This means you get more of your existing traffic to tick off micro and macro conversions and lessen your dependency on ads to bring in fresh traffic to drive sales.

Suppose you decide to still get additional traffic by going the PPC route. Messaging still works here. In getting to know your customers better, you understand better what awareness stage they’re at and what messaging they’ll resonate with the most.

3. Improve your SERP rankings:

The more time people spend on your site, this signals to search engines that people find your content useful.

The more online visitors bounce, the more signals search engines that your content isn’t useful, and your rankings drop.

In the process of identifying conversion issues on your website, you’ll be able to uncover the issues that make users bounce (usability issues, bad design, etc.) and improve them.

This leads to more visitors staying on your site and leads to your content ranking more.

4. Enhance your website’s trustworthiness:

If your website lacks trust factors, consider your website broken.

As you dive deep into your website, carrying out a CRO audit and website analysis, you’ll discover areas that inspire fear, uncertainty, and doubt for your site visitors.

This allows you to add elements that counter every element of doubt and improve your site’s trustworthiness.

Conversion Optimization Strategy FAQ

What is a CRO strategy?

A Conversion Rate Optimization (CRO) strategy is a systematic approach to enhance the percentage of website visitors who take a desired action, such as making a purchase or filling out a form.

What are CRO tactics?

CRO tactics involve a range of methods to improve user experience and drive desired actions. Examples include A/B testing, UX design enhancements, persuasive copywriting, and effective call-to-action implementation.

What does a CRO strategist do?

A CRO strategist analyzes data, conducts research, and develops strategies to optimize the user journey. They identify barriers to conversion, implement testing plans, and continually refine strategies to improve overall website performance.

What does CRO mean in marketing?

CRO in marketing stands for Conversion Rate Optimization. It focuses on refining and improving various elements of a marketing strategy to maximize the percentage of visitors who convert into customers, subscribers, or leads.

Additional Resources

The post How to Create a Robust Conversion Optimization Strategy? appeared first on Invesp.

Price, Scarcity, and Urgency: Use Incentives to Increase Conversion Rates on Your Website

Ayat Shukairy — Thu, 31 Aug 2023 12:48:51 +0000

Reading Time: 8 minutes

Spotted some trust issues on your site? No problem—you can still boost visitors’ confidence with incentives.

Incentives are a great way to ease fears, uncertainties, and doubts (FUDs) and keep visitors moving toward conversion. Even if your site has flaws, the right incentives can make people overlook them.

Think about it: If you’re choosing between two stores for a new notebook—one well-known and reliable, the other unknown but offering a 20% discount—you’ll at least pause to consider the deal.

This article covers how to create compelling incentives. We’ll explore three categories, give examples, and compare their economic and emotional impact to help you pick the best fit for your business.

Visitors Aren’t
Converting?

We’ll Show You Why

What are Incentives?

Incentives are rewards or motivators that encourage people to take action—whether making a purchase, signing up for a service, or engaging with a brand. In e-commerce and digital marketing, they’re used to reduce fears, uncertainties, and doubts (FUDs), increase conversions, and boost customer loyalty.

Think of it like this: every purchase decision combines logic and emotion. Incentives tip the scale by making an offer feel more valuable or urgent.

While discounts are standard, they aren’t the only way to motivate buyers.

For example, moral incentives can drive purchases by linking them to a cause. Instead of just offering discounts, brands can donate a portion of sales to charity. During the COVID-19 pandemic, many companies pledged to support frontline workers or food banks for every purchase, motivating customers to buy while contributing to a good cause.

Customer loyalty programs are another famous type of incentive. However, for this article, we will discuss the three main types of incentives to enhance the customer journey and increase your website’s conversion rate.

Although engagement tactics promote store loyalty, these incentives still have the most decisive influence on the buying process.

Three Main Types of Incentives For Online Businesses

There are three main types of incentives to get more conversions and skyrocket your business online:

Price-based incentives: Discounts, free shipping, or bundled offers.
Scarcity incentives: Highlighting limited stock or exclusive items.
Urgency incentives: Limited-time deals or countdown timers to create a sense of urgency.

Using the right mix of these can improve conversions and drive more sales. Let’s discuss them in more detail.

1. Price-based Incentives

Price-based incentives are financial factors that motivate and persuade buyers to take action and complete a purchase. The special pricing provides users with financial gain with their purchases.

They’re simple, easy to understand, and tap into a customer’s desire to get a good deal. These incentives offer special pricing, such as discounts, free shipping, or bundled offers. The goal is to make visitors feel like they’re getting more value than expected.

Price-based incentives impact consumers’ purchase decisions by affecting the perceived economic and emotional outcomes.

Some price-based incentives you can use:

Discounts and savings: Discounts—whether percentage-based (e.g., 20% off), fixed-amount discounts (e.g., $10 off), coupon codes, or sitewide sales—are a direct way to incentivize purchases. Offering a discount is a proven way to boost conversions. Research shows 64% of consumers are likelier to buy when they see a discount. Many beauty and clothing brands offer discounts on special occasions to boost sales.

Price-based discount incentives example

Buy-one-get-one-free opportunities: This classic offer increases perceived value by giving customers an extra product at no additional cost. It’s especially useful for clearing inventory and encouraging bulk purchases. For example, Barnes & Noble offers BOGO deals where customers can buy one book and get another at 50% off. Some promotions are time-limited to create urgency, while others last until stock runs out.

Buy-one-get-one-free example (Source: Skailama)

Free shipping: Shipping costs are one of the biggest reasons for cart abandonment. Free shipping—especially with a minimum purchase amount—can remove this friction and push customers to complete their orders. There’s a reason Free shipping is the number one incentive for online shopping for 9 out of 10 consumers or visitors. Even Amazon Prime built its entire value proposition around free shipping, turning it into a major customer retention strategy.

Free shipping is the biggest reason for Amazon Prime’s popularity (Source: Statista)

Freebies: Offering a free item with a purchase makes customers feel like they’re getting extra value. It can also introduce them to new products. For example, Sephora gives customers free beauty samples with orders, increasing conversions and encouraging repeat purchases.

Sephora offers up to two samples per order.

Product bundling: Bundling products at a discounted price encourages customers to buy more while feeling like they’re saving. This works particularly well for complementary products. McDonald’s meal combos are a textbook example of bundling—customers get a burger, fries, and a drink for less than buying each item separately.

Product bundling example (Source: reconvert)

Pro tip: Using incentives alone won’t automatically boost sales—how you present them matters. If your offer isn’t eye-catching, visitors may ignore it.

For example, we worked with a billion-dollar company to improve their conversion rate using incentives. One key change was making their free shipping banner more noticeable using a larger font, a contrasting background, and a prominent top placement. This simple adjustment led to a 6.89% increase in conversions.

Here’s a comparison of the banner before and after the adjustments:

Before we adjusted the free shipping offer

After we adjusted the free shipping offer

The takeaway? Ensure your incentives stand out within seconds to maximize their impact.

Price-based Incentives vs. Value Proposition

Many marketers mistake incentives for a company’s unique value proposition. However, incentives—like free shipping or a 10% discount—are short-term motivators, not the foundation of a brand’s identity.

A value proposition defines what sets your business apart in a competitive market. It’s the core reason customers choose you over others. Conversely, incentives enhance the shopping experience and encourage conversions but do not define your brand.

For example, Bombas, a sock and apparel company, has built its value proposition around the mission of giving back. For every pair of socks purchased, they donate a pair to someone in need.

Value proposition vs. price-based incentive example (Source: Bombas)

Customers don’t just buy Bombas for the product; they buy into the company’s commitment to social good. While Bombas offers occasional discounts or incentives, its unique social impact mission differentiates it and creates lasting loyalty.

In summary, Incentives help close the sale, but your value proposition attracts customers first. To build long-term success, focus on what makes your brand unique and use incentives to reinforce that value.

2. Using Scarcity Incentives to Increase Online Conversions

The secret to boosting conversions lies in understanding your visitors’ psychology. Scarcity is one of the most powerful ways to influence behavior. When visitors perceive an item as being in limited supply, they’re more likely to act quickly.

The Psychology of Scarcity

Scarcity creates a sense of urgency. When visitors see that only a limited number of products are available, they feel pressured to purchase before someone else does. This psychological trigger taps into the fear of missing out (FOMO) and can drive immediate action.

It could be through limited stock, time-limited offers, or exclusive access, all heightening the fear of missing out and encouraging customers to take immediate action.

How can you use scarcity-based incentives to enhance conversion rate optimization? Here are some ways:
Limited stock alerts: Showing low stock availability can create urgency. Customers who see only a few items left are more likely to complete a purchase rather than risk missing out. For example, here’s a clothing platform that combines low-stock alerts with discounts to entice potential customers to purchase quickly.

A brand paired discount with a scarcity-based incentive to boost conversion rates.

Exclusive access: Exclusivity makes customers feel special. Offering products, discounts, or content to a select group or for a limited time makes customers feel like they’re getting in on something unique. Amazon Prime Day capitalizes on exclusivity by offering special discounts only for Prime members, creating both scarcity and exclusivity at once.

Pro tip: Personalize the scarcity in your marketing campaigns. Use targeted messaging to show urgency for specific visitors (e.g., “Hurry, only 2 items left in your size”) and boost the number of satisfied customers.

3. Using Urgency-based Incentives to Increase Your Website Conversions

Like scarcity-based incentives, urgency-based incentives also tap into the fear of missing out (FOMO) and encourage visitors to take action quickly. But they do so in different ways.

The key difference here is between time and quantity.

Urgency-based incentives create FOMO using time. They focus on time limits to push customers to act quickly. For example, a flash sale that ends in 24 hours or a countdown timer on a discount.

On the other hand, scarcity-based incentives create FOMO using limited quantity. They make customers feel that a product is in short supply and may run out. For example, a product page saying, “Only three left in stock!”

Here are some ways to use urgency-based incentives to increase your conversion rates:

Time-limited offers: Offering a discount or deal that expires in a short period can create a sense of urgency. Customers don’t want to miss the deal, so they will likely buy immediately.

Flash sales: These are short, sudden sales that last only for a few hours or a day. They tap into urgency, encouraging customers to act quickly for the best price. Zara frequently runs flash sales with limited-time pricing on trending items, prompting quick purchases and increasing impulse buys.

Zara flash sale example (Source: Wisernotify)

Real-time indicators: Displaying indicators like “X people are viewing this product” or “Y items have been sold in the last hour” plays on the urgency of real-time social proof. Seeing others interested in the same product can drive customers to act faster.

Special event discounts: Discounts tied to special events or holidays—like “Black Friday” or “Cyber Monday”—create a sense of urgency for shoppers who want to score deals before the event ends. What’s more, customers anticipate these discounts well in advance, making them take action quickly.

Pro tip: Highlight the urgency—use countdown timers or limited-quantity alerts to reinforce the message that time or stock is running out. That said, too many countdown timers on your site can overwhelm customers, so use them strategically on high-conversion pages, like product or checkout pages.

Know exactly what’s stopping conversions —and how to fix it.

Conclusion: Using Incentives for Conversion Optimization

Incentives are essential to boosting sales and easing customers’ hesitation to make the final purchase. You can create offers that make website visitors take desired action by strategically using price-based, scarcity-based, and urgency-based incentives.

Price-based incentives (discounts, free shipping, bundling) provide immediate financial value, making purchases more attractive and increasing the average order value.
Scarcity-based incentives (low-stock alerts, exclusive access) create FOMO by emphasizing limited availability.
Urgency-based incentives (countdown timers, flash sales) push customers to act quickly by imposing time constraints.

While scarcity and urgency create FOMO in your target audience, they do so slightly differently. Scarcity produces a feeling of competition against other visitors. In urgency, instead of competing against other potential consumers, the visitor must meet your deadline to take advantage of the incentive.

Both boost conversions but lose impact if overused or misused. Fake urgency or scarcity can harm trust and credibility.

Use incentives wisely—balance them with a strong value proposition. While incentives drive quick purchases, a solid brand builds long-term loyalty for future purchases. Keep them clear, strategic, and aligned with your goals for maximum impact.

The post Price, Scarcity, and Urgency: Use Incentives to Increase Conversion Rates on Your Website appeared first on Invesp.

Using Buyer Personas: The Cornerstone Ingredient for Better Conversions

Ayat Shukairy — Thu, 31 Aug 2023 12:47:28 +0000

Reading Time: 9 minutes

Before jumping into conversion optimization, you need to identify your site visitor by recognizing, for example, concerns, motivations, uncertainties, and trigger words.

One of the first tasks we do as a company, which has been helping marketers optimize their content and their conversion rates, is to delve into understanding the market as best we can prior to initializing the recommendation process.

Most companies are aware of the importance of knowing customers, but few comprehend all that this recognition entails, especially online. The majority are still keeping their heads in the sand and overlooking the high costs of stepping away from clients.

The Global Customer Service Barometer, after interviewing more than 1,000 adult customers on how they view their brands, brings disappointing results 38% of the participants believe that businesses are not customer-oriented and fail to provide enough attention.

Image source: AmericanExpress

As data shows, many people are frustrated by how businesses are still using the same outdated methods to interact with their customers and not paying enough attention to them to satisfy their needs.

We find that companies face one of two challenges when it comes to integrating their marketing data into their selling process:

Smaller companies do not have the know-how or the means to conduct research to identify and segment their market effectively. Some of them might not even appreciate the value market research brings to their business. As a consequence, they only make assumptions about their clients, which are often wrong, and risk missing crucial segments that can generate large.

On the other end of the spectrum, many mid to large businesses perform their due diligence researching the market but do not know ways of applying the results. They are unable to integrate that data into actionable insights that can be implemented in their selling process, marketing campaigns, or on their websites.

Regardless of the size of the company, the overwhelming question is: how do you use the marketing data to make sure website copy, design, navigation, and overall site structure will engage most visitors, if not all, and move a high percentage of them through the conversion funnel?

When the average e-commerce store converts only 3-5% of its visitors into customers, you must pause and wonder what is stopping the other 95% from moving forward with the purchase process.

Conversion optimization starts with gathering detailed market information. The more detailed the information, the more precision you will find in the optimization process. You then use that data to shape your website’s interactions with visitors.

The most efficient way to address market concerns is through the creation of buyer personas.

But what are personas? And how can they help with conversion optimization?

Buyer personas are models, examples, and archetypes that humanize and individualize a precise target market. They are hypothetical individuals who represent target consumers.

Image source: Amy Cotton

Through persona creation, you should be able to relate to customers on an individualized level to bring personalization, engagement, and enthusiasm into your website by knowing what appeals to them and what turns them off.

And because buyer personas are at the helm of conversion optimization, they should guide every aspect of your website, including user interface and screen design, process flow, and web copy development.

Too many websites cater to the masses and not to a single person. As a result, the copy is dull, the design is boring, and visitors are left frustrated.

Creating your own buyer personas will help you relate to the different types of personalities of your customers and help you address their needs accordingly.

Market Segmentation Vs. Persona Creation

When we first present the concept of buyer personas to our clients, they frequently confuse persona development with market segmentation. These are not the same. However, persona creation relies heavily on market segmentation.

In order to create buyer personas, you need to understand the market segmentation and the various customer profiles you compiled with your team. Segmentation is the division of the market or population into subgroups with similar motivations.

Keep also in mind that there is a huge difference between marketing to a business (B2B) and marketing to a customer (B2C) although both of them are selling to a person.

The widely used bases for segmenting business-to-customer markets usually include geography, demography, personality (behavior), and psychographic factors. As for the bases used for segmenting business-to-business (B2B) markets, they are different; they include the location, the company type, and the behavioral characteristics.

This article focuses more on the techniques used in B2B markets during the buyer personas creation process for such businesses.

The use of personas is intensively growing, as more than 93% of companies that exceed revenues and lead goals are using personas by segmenting their database accordingly to personalize experiences for their visitors.

A recent study on the most important elements of effective B2B content has demonstrated that audience relevance ranks the highest at 90%.

Image source: Marketing Chart

In another survey, with 640 global senior B2B marketing executives and business leaders, half of them in the internet and software industries, 69% of participants agree that understanding buyers’ needs or pain points is the most effective go-to-market strategy for a product launch.

These studies show it’s now high time for marketers and business owners to put their feet in the customers’ shoes and start building up buyer personas that reflect the real needs and demands of their customers.

Every company, online or offline, must comprehend the market they are working in as well as the best techniques to better cater to their ideal customers.

You can go in-depth and analyze the various demographics and similarities within the market to create segmentations and narrow the target market. This information must be quite detailed to create the ideal target customer.

How Are B2B Marketers Building Buyer Personas?

Cintell surveyed 137 B2B marketers to find out how they build up their buyer personas and what kind of data they use.

Image source: Marketing Charts

The survey segmented these marketers into three different groups, as shown in the graph above. The first group, the one doing well by exceeding revenues and lead goals, was conducting qualitative interviews for both customers and non-customers, including the executive team and the salespeople. The data obtained were more likely segmented by demographic factors than other fields mentioned above, and their focus was oriented towards addressing the fears and motivations of their customers because these are more applicable to buyers as individuals.

Consider a site that sells discount furniture, catering to three different market segments:

Middle-income families, middle-aged, 70 – 100k household income
College students, 10-25k income
Building company

The three markets differ in income, personality traits, and needs. Their interests and motivations behind the purchase are different. One group is purchasing for their families, the other for themselves, and one for potential clients or home staging. The site’s goal is to appeal to all markets equally. Buyer personas help you achieve this goal by guaranteeing you capture each group’s interest.

In this scenario, we would introduce Jennifer, a 45-year-old homemaker. She likes to update her home furniture every year. She enjoys decorating her home and always needs to update because of her rowdy kids. She is price-conscious but looking for something sturdy with good quality. She just wants to ensure that her satisfaction is guaranteed because she needs quality items. Return policies are apparently imperative to her.

Compare these traits to Evan’s, a 37-year-old builder who must find great, unique pieces to stage the homes his company builds. He wants to find pieces that are neutral enough so that prospects can imagine themselves in the home. He also tries to find items that will pique prospects’ interest so he can sell them with the home. He is not as concerned about price but does have a budget.

Finally, the website targets Sally, a 19-year-old college student who is rooming with two other friends. She needs cheap, nice furniture items that are a bit trendier. She is trying to make a quick decision because move-in is within the next couple of weeks. She needs white-glove delivery and someone to build the pieces. She is looking for practical solutions for their tiny space and considering items with tons of storage.

Selling to these individuals is a lot easier than to a general market segment because you can put yourself in Sally, Evan, and Jennifer’s shoes. You can anticipate their concerns and personalize the experience with them.

Buyer personas pave the way for:

Understanding what makes different segments tick, what appeals to them, and what turns them off.
Relating to the various personality types that will come, address their needs accordingly.
Recognizing that all users come at different buying stages. Evoking empathy within site developers, marketers, and sales teams.
Knowing competition well, starting from which market segments are likely to identify with a competitor more than with you, and why?

The Four Temperaments

Many philosophers and psychologists have played with the concept of temperaments at length, beginning with Aristotle in 325 BC, passing by Carl Jung in the 1920s, to a modern-day version with David Keirsey in the 1950s. The concept boils down to the fact that humans carry particular sets of characteristics. For a marketer, understanding what makes each of the temperaments tick can help move the needle in conversions.

While you create each persona, you can also assign a temperament (or combinations of them). That way, when designing, you may have Jennifer in mind, but now you also have in mind that she is a caring person, triggered and motivated by social proof, which can be something to address on the website.

These are the four temperaments to consider.

Logical

A logical persona is meticulous, methodical, and detail-oriented.

When a visitor of a logical nature enters your site, she searches for every single detail of your product and services. She also expects your site to offer answers in a logical, systematic, and easy-to-locate fashion.

Someone who is logical is going to research your product or service longer, reading and looking for information about it more than others. The purchasing decision for logical personas comes as a result of researching, shopping around, and getting to know more of your and your competitors’ offers.

How do you address logical personas?

When targeting a logical persona, your site should:

Have easy-to-locate information.
Contain answers to all questions about your company (date of establishment, range of products and services offered, reputation).
Refer visitors to the methodology, about us page, or the blog.
Detailed product pages with detailed descriptions.
Systematic explanation of your services.

Caring

The caring persona is impacted by people.

A caring visitor to your site looks for reviews and testimonials. She searches for the opinions of others, as well as the number of customers who have used your product or hired your service. People with this temperament are trusting. Their buying decision is impacted by what others feel and say about your company.

The purchasing decision for caring personas takes some time. They are not disciplined in considering different alternatives, which makes selling them a little bit hard.

How do we address caring personas?

When targeting a caring persona, your site should:

Provide testimonials.
Present news quotes and announce awards received.
Show numbers of clients.
Display reviews on product pages.
Showcase social media mentions.

Impulsive

The impulsive persona buys fast and regrets fast.

The credit-card-in-hand type of visitor may purchase on impulse but often regrets the decision. Attempt to understand how to get them to click right away, with the right elements visible. However, try to avoid the regret phase by giving them the information they will need through the conversion process.

Impulsive personas are determined to make a purchase. They need to find a reason to buy from you as soon as they enter your site, or they will leave to make the purchase on another site.

Impulsive buyers are an e-commerce company’s dream client.

How do you address impulsive personas?

When targeting an impulse persona, your site should:

Present benefits in the form of 3 or 4 extremely convincing bullets.
Include a big “call to action” in a bright color, immediately following the benefits.
Make sure the check-out process is smooth and fast.

Aggressive

The aggressive persona is very competitive in nature.

This persona type likes to be outstanding and to acquire the finest products and services. Convincing them that you offer premium, first-rated products or services will help you win them over. These personality types strive to be the best by flushing out the competition.

If an aggressive persona visitor sees a reason that your product or service will place them ahead of the crowd, then you can be sure that they will be loyal customers.

How do you address aggressive buyer personas?

When targeting an aggressive persona, your site should:

Offer great incentives, such as the best price and the newest product.
Give a good reason why your product or service is the best and what it will do for them.

Do you need to address all 4 persona temperaments on your web pages?

That is a good question!

These are some of the things you should keep in mind when creating a web page that caters to the four persona temperaments:

1. Depending on what you are selling, you can determine which temperaments you will probably address. If it is something rather expensive, whatever personality type you are dealing with, the likelihood of more methodical instincts will be present. That does not dismiss the fact that many spontaneous individuals still want to buy cars and diamond rings. However, you can expect them to ask “more” questions because it is a greater buying decision and investment. High-value transactions (contracts worth thousands of dollars) will be meticulously reviewed in a very methodical format. For smaller decisions, you are more likely to have all 4 temperaments.

2. The ratio of temperaments within a population is:

45% logical
35%impulsive
15% caring
5% aggressive

3. Within a single page, yes, you absolutely need to have the language that can address these 4 temperaments.

In the video below, part of one of our webinars, Ayat Shukairy, and Khalid Saleh talk about the different persona temperaments and explain psychological understandings of personas in a historical progression.

The post Using Buyer Personas: The Cornerstone Ingredient for Better Conversions appeared first on Invesp.

Buyer’s Journey Stages: Optimizing Your Website for Every Stage of the Online Buying Cycle

Ayat Shukairy — Thu, 31 Aug 2023 12:45:16 +0000

Reading Time: 12 minutes

You can only persuade your website visitors to choose your product or service when you address their motivations, needs, and fears.
Visitors are not concerned or aware of your website sales funnel. They come with their own buying funnel which may or may not match your sales process.
Consumers go through five stages before making a buying decision. The attention stage, the interest stage, the desire stage, the action stage, and the post-action stage.
In some instances, buyers follow these stages sequentially. Other times, buyers skip some stages.

Breaking down the buying journey stages Online

Before you design your website or landing pages for each of the buying stages, you must decipher the actual stages of visitors who land on your site.
A good starting point is to analyze keywords that drive traffic to your website. Both single keywords and generic search terms come loaded with information. They can indicate whether a visitor is in an early or late buying stage, or not in a purchase process altogether.
During conversion optimization projects, we use software to mine analytics data for new keywords and understand visitors’ motivations when landing on the site.

Using keywords to understand visitors’ intent

Create a list of keywords that drive a significant amount of traffic to your website.
Focus on the top 100 keywords for your website.
Segment your keyword lists by visitor’s intent, bounce rates, and time spent on the site.
Be realistic: Do not aim at 100% accuracy. Deciphering visitors’ intent is a qualitative area of research.

The Five Tests for Optimizing Your Website for Every Stage of the Online Buying Cycle

The attention test: In 2014, visitors were deciding whether they trusted a website in less than half a second.

There are 5 questions you should answer.

Does your page communicate trust to visitors?
Are you able to intrigue the visitors and arouse their interest in the first five seconds?
Do you use attractive images to intrigue visitors?
Do you carefully craft titles and headlines to capture the attention of visitors?
Do you grab visitors’ attention through unexpected events
The interest test:

You need to answer 7 questions for each of your web pages.

What is the most important information your visitor expects to see on a page?
To answer this, you need to know what brought your visitors to the website. Go back to the keywords section in this article, figure out your top keywords, and test your page to see if it addresses visitors’ searches.
Is the information presented on the page relevant to the visitor?
Is your page visitor friendly?
Is it easy for your visitor to find the information they need in a quick way?
Do you present information in a clear way?
Do you give your visitor a reason to stay on the website?
The desire test:
Your visitors are now interested; next, you must convince them that they desire your product or service because it will satisfy their needs or solve one of their problems.

You need to answer 5 questions in the desire test;

Are you able to convince visitors to stay on your website?
Are you able to persuade visitors to convert?
Do you use special offers to increase visitors’ desire?
Do you communicate unique product benefits, or company benefits, effectively?
Are you able to use urgency and incentives to increase visitors’ desire?
The action stage test:
Every page on your website has a primary action you want visitors to take.

Answer these 5 questions for each of your web pages:

Do you have the most important action (primary action) defined for the page?
Do you highlight the primary action on the page using copy and design? (check out our complete guide to effective CTA buttons)
Is it obvious, logical, and desirable for every user to take the primary action?
Are your primary actions laid out in a persuasive and clear process from one page to the next?
The satisfaction test:
The kind of relationship you have with your customers will depend on the type of product you sell. Some products are a one-in-a-life-time purchase; others have the customer coming to your website on a regular basis.

Answer these 5 questions for each of your web pages;

Do you provide an easy and clear way for customer service on your website?
Do you track customer satisfaction with your website?
Do you track customer satisfaction with your products?
Do you deploy a customer exit survey on your website?
Do you keep in touch with your customers via email, social media, and other forms?

Here’s A Longer And More Detailed Version Of The Article.

You can only persuade your website visitors to choose your product or service when you address their motivations, needs, and fears.

Visitors are not concerned or aware of your website sales funnel. They come with their own buying funnel which may or may not match your sales process. Successful marketers identify the buying stage of the potential customer and match each stage with the correct sales methodology and techniques to meet the needs of the customer.

Some prospects enter the sales funnel already prepared to buy. Others, the majority, arrive at your site to either browse, look for information, compare products, or even just kill time.

The five stages consumers go through before making a buying decision are:

Attention stage: Need recognition
Interest stage: Information search
Desire stage: Evaluation of alternatives
Action stage
Post action stage

These five distinct stages roll out in sequence for some buying decisions; others skip some stages. If you were to get hungry in the middle of the night (the need recognition), you might skip over the information search and evaluation phases and get right to the purchase stage. The length of time it takes a consumer to go through these phases varies based on a mix of internal and external factors.

The buying stage determines the visitor’s interaction with your website. Each stage requires a particular set of information and an appropriate style of presentation to persuade more potential customers to convert.

Visitors at the need recognition or information search stages are in the early phase of the funnel. They have not invested the time to determine the best solution for their need. The evaluation stage indicates that visitors are in the middle of the funnel. They are closer to making a buying decision. Finally, visitors in the purchase stage are in a late step of the funnel. These visitors have shown a level of commitment and are more likely to convert if you present them with the right information.

In this chapter, you will learn the guidelines to decipher your visitor’s buying stage and to detect your visitor’s intent through the use of keywords. You will also find five tests to help improve your website regarding your customers’ buying phases: the attention test, the interest test, the desire test, the action test, and the satisfy test.

Deciphering the Buying Journey Stages Online

Before you design your website or landing pages for each of the buying stages, you must decipher the actual stages of visitors who land on your site.

A good starting point is to analyze keywords that drive traffic to your website and decode visitor’s intent based on these words. You can then use visitor’s intent as a signal or an indicator of the potential customer’s location in the buying funnel.

Both single keywords and generic search terms come loaded with information. They can indicate whether a visitor is in an early or late buying stage, or not in a purchase process altogether. Other searches might be easier to decipher. The following table shows possible visitors’ intent when they land on a website after searching for the term “laptop.”

Keyword	Perceived intent	Type of intent	Actionable
Laptop	Product evaluation	E-commerce	Yes
	Laptop technology	Knowledge	Maybe
	Laptop history	Knowledge	No
	Laptop reviews	E-commerce	Yes

A visitor could be looking for product evaluation or reviews, or could be ready to buy. In both cases, the visitor is in a buying process, mid or late stage.

A search for the history of laptops, or the latest technology news, indicate the person is not in any buying process.

If a visitor gets to the site by searching for less than generic terms such as “laptop reviews” or “laptop history,” you do not have to do much guesswork. The visitor is letting you know what he/she is looking for. A search for “laptop reviews” indicates the evaluation of alternatives stage.

Another example is a search for “cheap laptops”, which might also signal a ”desire,” although this person is obviously price-sensitive. Finally, a visitor who lands on your website after searching for a particular model, “Dell XPS 13,” is possibly at the purchase stage of the buying funnel.

During conversion optimization projects, we use software to mine analytics data for new keywords and understand visitors’ motivations when landing on the site. A website typically has thousands, if not hundreds of thousands, of keywords that drive traffic to it,which can make the task of analyzing keywords quite challenging.

Using keyword research tools can help save you a lot of time. Marketing experts have recommended tools like SEMrush, Google Keyword Planner and Buzzsumo.

Using Keywords to Decipher Visitors’ Intent

To decipher visitors’ intent by using keywords, use the following guidelines:

Create a list of keywords that drive a significant amount of traffic to your website. The determination of high-volume keywords depends on your site. For some, a high-volume keyword brings 500 visitors per month;for others, 50,000 visitors per month.
Focus on the top 100 keywords for your website. For many websites, 80% of their traffic comes from 20% of their keywords. This second list of keywords is another goldmine in determining visitor’s intent.
Segment your keyword lists by visitor’s intent, bounce rates, and time spent on the site.
Be realistic: Do not aim at 100% accuracy. Deciphering visitor’s intent is a qualitative area of research. Your goal is to look for general trends to understand what brings visitors to your website.

Search engines spend more time analyzing visitor’s intent based on keywords than any other online entity. The quality of search results,and, therefore,the quality of the search engine itself, depends on providing relevant data to the term a person searched for. Based on linguistics, search engines use complex algorithms to decode visitor’s intent. They also have the advantage of monitoring the pages on which people are clicking when they search for a particular term. If users regularly click on the same result, the engine creates an association between this type of result and the search term.

In the following sections, we will cover how you can improve your website to deal with visitors at each of the buying stages. As you go through each section, you should keep in mind that a wealth of information creates a poverty of interest. Your goal is to provide the right amount of information for each stage and nothing more.

The Five Tests for Optimizing Your Website for Every Stage of the Online Buying Cycle

1. Attention

Are you able to capture the attention of your website visitors in the first five to ten seconds? In 2006, Invesp’s research indicated that online visitors decided whether they trusted a website in three seconds. In 2014, visitors were deciding whether they trusted a website in less than half a second. Which is found to be a normal trend in accordance to human adaptation to growth in technology.

The Attention Test

Answer these questions for each of your webpages:

Does your page communicate trust to visitors?
Are you able to intrigue the visitors and arouse their interest in the first five seconds?
Do you use attractive images to intrigue visitors?
Do you carefully craft titles and headlines to capture the attention of visitors?
Do you grab visitor attention through unexpected events?

Let’s take this homepage as an example. This is an ecommerce website (B2C) that provides the service of online gifting. Take a minute to answer the questions above about this homepage before moving forward.

Have you answered the 5 questions?

As you can see, I’ve only shown the area above the fold. Because it is the most crucial area for capturing attention.

Ok, so let’s do it together:

For unexpected events, to answer question 5, this website has a popup offering the visitor a 20% discount on their first order.

2. Interest stage: Information search

You captured the attention of your visitors and convinced them to give you a chance. Next, you need to capture their interest. This is where cognitive progression plays a role. You anticipate the needs of your visitors, their mindset, and the information they expect to see on your website. Accordingly, you present to them all data in a clear, concise, and persuasive matter.

The Interest Test

Answer these questions for each of your webpages:

What is the most important information your visitor expects to see on a page?
To answer this, you need to know what brought your visitors to the website. Go back to the keywords section in this article, figure out your top keywords, and test your page to see if it addresses visitors’ searches.
Is the information presented on the page relevant to the visitor?
Is your page visitor friendly?
Is it easy for your visitor to find the information they need in a quick way?
Do you present information in a clear way?
Do you give your visitor a reason to stay on the website?

To gain and keep your visitors’ interest, you will need to present them with all the information they are seeking. On a product page, this would be:

Product name
Product features
Product image
Product price
Product specifications and details (if applicable)
Product reviews

Laptop Outlet is another B2C E-commerce website that sells laptops and accessories. Their product page speaks loud and clear: we have everything you need.

3. Desire Stage: Evaluation of Alternatives

Your visitors are now interested; next, you must convince them that they desire your product or service because it will satisfy their needs or solve one of their problems. Once you have that, you’ll find that even if lower prices are a strong motivator; giving your visitors what they want can still beat your competitors price.

The Desire Test

Let’s take Pug Shop Design as an example for this test. They are a B2B that provide design services to their visitors. Let’s answer these questions:

1. Are you able to convince visitors to stay on your website?

A clear value proposition is very likely to make me stay and scroll further down.

2. Are you able to persuade visitors to convert?

So,Pug Shop explained how easy it is to use their services. Now, they’re asking me to “see plans & pricing”, i.e. pushing me further down the funnel.

3. Do you use special offers to increase visitors’ desire?

So,Pug Shop explained how easy it is to use their services. Now, they’re asking me to “see plans & pricing”, i.e. pushing me further down the funnel.

4. Do you communicate unique product benefits, or company benefits, effectively?

Pug Shop lets their customers communicate the benefits. Reviews and testimonials are excellent conversion boosters.

5. Are you able to use urgency and incentives to increase visitors’ desire?

No risk? Money back guarantee? I simply have nothing to lose at this point.

All queries above ads up to one last important question:

Do you utilize “must have” effect and other principles of psychology to increase visitor’s desire?Run this test on your website. If you’re not using incentives yet, learn more about giving your customers the biggest bang for their buck.

4. Action Stage

Every page on your website has a primary action you want visitors to take. Yes, we want visitors to convert (place an order, fill out a contact form, subscribe to our website), but getting to that macro conversion requires the visitor to go through a series of micro conversions (reading a piece of copy, clicking on a link, navigating to a page). Getting to the big “Yes” requires a series of small “yes’s.”

Think of the ways you get your visitors to take an action: are you gently guiding the visitor to take an action or are you pushing that visitor to take the action?What way works better for your visitors?

The Action Test

Answer these questions for each of yourwebpages:

Do you have the most important action (primary action) defined for the page?
Do you highlight the primaryaction on the page using copy and design? (check out our complete guide to effective CTA buttons)
Is it obvious, logical, and desirable for every user to take the primary action?
Are your primary actions laid out in a persuasive and clear process from one page to the next?

5. Post-Action Stage

What type of relationship do you have with your customers? To some degree, this will depend on the kindof product you sell. Some products are a one-in-a-life-time purchase; others have the customer coming to your website on a regular basis.It costs a lot less to retain a customer than to acquire one.Even for one-in-a-life-time products, you should think about the referrals customer can provide. So, how do you move from a single transaction into a long-term relation with the client?

The Satisfaction Test

Answer these questions for each of yourwebpages:

Do you provide an easy and clear way for customer service on your website?
Do you track customer satisfaction with your website?
Do you track customer satisfaction with your products?
Do you deploy customer exit survey on your website?
Do you keep in touch with your customers via email, social media, and other forms?

A great way to contact and keep in touch with your customers/visitors is through polls. Visit our Polls 101 Guide to learn more, if you haven’t yet.

Conclusion

Visitors go through the buying stages on every journey of online purchases. The tests suggested in this article work for a B2C ecommerce website as much as they do for a B2B lead generation website.

By implementing these five tests, you will find which elements you can add or modify on your website to cover every aspect of the buying stages. To help you in determining these elements, we created thishandy checklist you can download and keep with you for easy access.

The post Buyer’s Journey Stages: Optimizing Your Website for Every Stage of the Online Buying Cycle appeared first on Invesp.

13 tips that helped us improve a landing page conversions by 25%

Ayat Shukairy — Thu, 20 Aug 2020 03:05:46 +0000

Reading Time: 6 minutesOur client creates dance videos that people can pay one time for unlimited access. Customers typically “gifted” this product to their significant other during holidays, birthdays, or other special occasions.

Our client had a predicament during the February Valentine’s frenzy.

The majority of the site traffic was coming through Facebook at a decent clickthrough. However, conversions were a dismal 0.5%.

So, to increase the landing page conversion rate – I looked at ads and landing pages for companies during Valentine’s day.

Let’s take a look at some of the lessons I learned.

1- Avoid the safe approach – boring and not-memorable

The biggest problem marketers struggle with? The sea of noise that bombards ~~our customers~~ people every minute.

What do you prefer?

Good and the same
Good and different

You can be good, but if you aren’t different, you do not stand out.

You play it safe, but you get drawn in a sea of sameness: the same ads, the same copy, and the same landing page.

Most of the ads and landing pages are boring and mundane – they offer visitors no emotional or social persuasive elements.

Now don’t get me wrong- jewelry and watches could be a viable option. But if the marketers of the products describe the emotional push and pull of the gift.

It doesn’t mean that marketers don’t succeed with selling during the holidays with the mundane copy.

But they could do so much more if they got the copy and design elements right.

2- Don’t go there: cringe-worthy ads

Remember the question I asked? I will add a scary option…

What do you prefer?

Good and the same
Good and different
Bad and different

Being different is not a goal.

Being good and different is the goal.

There a thin line between “good and different” vs. “bad and different”.

That is perhaps why so many companies decide to play it safe and stay in the Good and the same area.

What on earth was the copywriter thinking?

Valentine’s day and the trash

Valentine’s day and the meat

Valentine’s day the vacuum cleaner

But the winner goes to

Valentine’s day and the funeral

How very romantic.

There’s no better way to put your loved one through an emotional roller coaster by gifting them pre-arrangements for their imminent death.

You’ve got to ask yourself – what on earth was this copywriter thinking?

Okey – surely marketers can do better. So, we looked at ads on dance lessons from competitors of our client.

The lesson on what you should avoid continues.

3. Avoid Clichés

The ad started with a cliché. But then who is Fred?

4. Don’t be cute

Really – cupidity? Someone thought of that ad – and someone approved it.

5- Don’t forget the emotional side

I know, I mentioned it. here it is again: People buy with emotions and justify with logic. Selling on emotions always wins.

6. Understand why people buy

Three reasons explain why people buy:

The functional reasons – the functionality that the product or service provides.

The emotional reasons– how the product makes the buyer feel?

The social reasons – how the buyer is perceived his social circle when using the product?

Appealing to the emotional and social reasons behind a purchase turns visitors into customers.

Start by understanding the emotional and social pulls and pushes are in order to leverage them.

You will only do that by talking to customers.

7. Is it the ad or the landing page?

Facebook traffic doesn’t convert well.

But if your ads are well-targeted, then visitors are willing to give your product a chance. It was the landing page that wasn’t delivering.

When we first reviewed the landing page, we found that there was a lack of emotional and social copy and elements that would drive the purchase. Much like the ads of the competitors.

8. People think they buy on impulse – they don’t

We are not big believers in impulse buying.

9. A bad question to ask: why did you buy the product?

We never ask customers why they bought a product.

Try this instead…

Ask people what was going on in their lives when they decided to buy the product.

10. Digging for oil: Jobs to Be Done interviews

Because most of the time, we get top of mind answers – simple and don’t get into the real reasons of why people buy.

So, we interviewed 15 customers and asked them to walk us through when they decided they wanted to buy the videos.

Most customers would initially state that it was on impulse purchase – they saw the ad, and they bought.

As we dug deeper we discovered:

Most purchased as a gift
Some were empty nesters
Some had many young kids
Most lacked intimacy in the relationship
Some were in a relationship with a person who loved dancing
Most noticed how others are happy when dancing
Most were sick of mundane date nights
Some were prepping for a special event in their lives that included dancing (like a wedding)

These weren’t only the common threads, but these were the most important.

Where is the causality in these issues that we uncovered?

11. A winning formula: People don’t buy “x” – they buy “y”

Logical vs. psycho-logical.

As it turns out – people don’t buy dance lessons.

People don’t buy “dance lessons” – they buy “happiness.”
People don’t buy “dance lessons” – they buy “intimacy.”
People don’t buy “dance lessons” – they buy “better relationship”
People don’t buy “dance lessons” – they buy “exciting dates”

Dance lessons are a tool for a deeper goal.

Again, remember that we spoke to people that had made the purchase already.

We wanted to understand from them what drove them to that purchase. Many of the items there were the pushes of the situation:

It’s just him and her, or they have no alone time as a couple.

Their date nights were so boring and always the same thing.

They needed to bring intimacy back into their relationship

He wanted to give her a gift that was unique and she’d always appreciate

12. Use emotions in your headlines

The copy on the site was now more focused on the emotional and social reasos behind someone buying dance lessons.

The results: a 10% increase in purchases.

13. Use “before” and “after”

Copy and images can evoke emotion and persuade the visitor to buy.

Again –

Before and after in the headline.
Before and after in the images.

Customers struggled with the lack of intimacy or excitement in their relationship. It was a result of a life change, a busy life, or frustration in the relationship.

They thought dance lessons could possibly bring that back.

Before: an image of a copy at a boring dinner date night.

After: an image of a couple enjoying dancing in the middle of their home.

The results: a 17.14% increase in purchases.

The post 13 tips that helped us improve a landing page conversions by 25% appeared first on Invesp.

This is how people make decisions (with real life examples)

Ayat Shukairy — Thu, 16 Jul 2020 05:57:25 +0000

Reading Time: 7 minutesThere is no such thing as an impulse purchase.

Just because something is “inexpensive” doesn’t mean it’s an impulse decision.

Just because someone tends to purchase suddenly doesn’t mean they are making those decisions impulsively.

They’ve gone through a purchase journey – may be faster than others, but they have.

This customer thought that his purchase decision was on impulse – digging deeper, he was ready to make this decision more than anyone else.

After speaking to hundreds of customers, I’ve become well versed in understanding how to root out the causality that led to a purchase. It’s the first step in any marketing activity we conduct.

The customer starts by saying that the purchase happened on an impulse. They don’t recognize the deep exact reason behind their decision.

In reality, people go through several events that lead up to their decision.

Understanding the timeline is a gamechanger.

A first thought is when the customer gets the idea planted in their head that this product or service is something that they need or want.

Here’s an example of someone’s first thought back in 2018, figuring out how to become a better gamer and what is entailed.

Now, of course, a tweet tells you half the story, but you will see the progression.

Event 1 references that first experience that clarifies that need or want even further. This customer referenced “the lady” and what she has been investing in.

She is further justifying making the purchase.

Events often are triggered by people doing or using that thing that has been in the back of your mind (the first thought).

She starts to look – passively, meaning getting advice, seeing what people think, before she does the real work.

Event 2 is when that product or service need is crystallized in the customer’s mind – moving them to from passive to active looking.

So although the customer found this “new method” without the mixer to make the sounds more unified and controlled, she still has the mixer in mind.

Notice her use of the word “mixer” in bold. She knows this is the best way to achieve a better sound.

A few days later, after uncovering that “new method,” she bought the mixer to make things even better!

Here’s the full timeline view:

What do causality and these leading events have anything to do with conversion?

Just tell me Why

Customers don’t tell you “why” they bought a product.

Or they give you top of mind answers.

You can begin to understand the “why” through the tradeoffs customers make during their decision-making process.

Marketers say, well, ask the five whys: Why do you need this? Why? Why? Why? Why?

To get to that root cause and most likely emotional and social reason.

Toyota created this infamous 5 Why’s method. The theory is by asking why, then why, and so on, you can get to the root cause and reason.

But it’s annoying to keep asking WHY?

And asking why, many times, gets you top of mind answers.

How do people make decisions?

Image credit: Rewired Group

Our good friend Bob Moesta of the Rewired Group does Jobs to Be Done for a living. He introduced us to the concept in the first place.

The company finds new ways to innovate and solve complex problems through these types of interviews.

One of the projects he worked on was as a VP of marketing for a construction company.

His goal was to attract more people to purchase the condos they offered.

The people they were targeting with the new development had several “Pushes:”

They needed to downsizing.
They wouldn’t have to worry about gutters and what not.
They would have a cleaner home since it’s smaller and easier to maintain
They were typically Empty nesters.

The magnetism of the new solution: It was a 1500 ranch condo brand new construction – 2.5 baths two bedrooms. The condos were gorgeous.

If you would see these condos, you’d want to move.

But They weren’t selling.

What was the problem?

So they started interviewing, and they understood the anxieties :

How are we going to move?
How are we going to pack?
How are we going to sell?

Don’t forget about the habit of the present:

This is the place they raised their family in
This is the family heritage/heirloom.
This is the neighborhood they’ve been in for 20+ years.

Push and magnetism need to be stronger than Habit and Anxieties for people to make progress and change.

And again, very often, there are those events that happen in people’s lives that push them further.

Well, when they interviewed some of the couples that did move, they understood that a driving factor for them was that “so and so” died, and the move was that much harder for the spouse that was left.

The first thing Bob did after hearing this piece of information was put the ad for the condos near the obituaries section in the newspaper. He understood that the magnetism of the solution would be that much stronger.

Thinking of buying a new car

You see hundreds of car ads, but you never really notice them until you’re looking for a car.

What goes into the decision making process of buying a new car?

Your car is old and is breaking down, or maybe your friend is driving a new car, and you feel a social pressure to match him. That’s the push of the situation.
The new car has impressive specs. That is the magnetism of the new solution.
But you have so many memories in your old car, and it’s always been there for you – that’s the habit of the present.
Do I really need to commit to a monthly payment? What is the best car for me? Should I lease, rent, or buy? That’s the anxiety of the new solution.

Now, if that same person was driving, and suddenly the car broke down – that event, it could be a trigger to push them closer to making the decision.

Or, for example, that person went to a friend’s home and noticed that their friend had indeed bought the same car they were considering. Again, it would be an event that would push them further.

Understanding the progress making factors will help you become a better copywriter.

A better marketer.

A better salesman.

The example below is an example of two car ads, one that highlights the specs: meh.

And the other that is talking and displaying class and those emotional reasons that may impact a person’s decision.

Causality is Social and Emotional

“Customer insights can ripple across an organization and be interpreted differently by different parties. That’s why understanding the context and circumstance that leads to JTBD research is so important.”

Customers are triggered by various events that will result in the purchase. They do not recognize these triggers and events until they are interviewed.

Causality is almost always emotional or social.

When a woman was asked why she purchased a shirt with the words “You are Strong” on it, she first said it was an impulse purchase.

By digging a bit further, the interviewer was able to figure out:

She had just given birth…

She had been feeling overwhelmed…

And she was balancing too many things.

The shirt was a homage to all that she had been through.

Copy that caters to the emotions wins:

Prof. Ted Lovett famously said:

“People don’t want to buy a quarter-inch drill; they want a quarter-inch hole.”

When you look for a drill, for example – companies are generally competing over specs and ignoring that emotional and social reason. Specs aren’t the root reason for someone to make the purchase.

Companies are competing over the color of a drill, the power, the specs – rather than the emotional: “hanging up that beautiful family picture.”

You can ask a customer why they bought the drill, and they may rattle the specs. That’s top of mind answer.

The better approach is to ask “when” and walk them through the experiences that led to the decision.

The first thought, then the events that caused and propelled them to finally make that decision on that specific day.

If you understand those causes, you can use those words…

that copy…

Those events…

To propel other potential customers to make the decision faster.

The post This is how people make decisions (with real life examples) appeared first on Invesp.

How to Understand and Beat Competitors!

Ayat Shukairy — Mon, 04 May 2020 09:24:06 +0000

Reading Time: 2 minutesUnderstanding your competitors – whether you’re just starting out a new venture or you have a deeply rooted business – is key for the success of your business.

Competition comes in many forms. It can either be direct or indirect.

Direct competitors are those businesses that offer the same products as yours. Indirect competitors do not offer the same products or services like yours, but they target the same group of customers with the goal of satisfying the same need.

So if you think about it, the definition of competition should not be restricted to products or services that look or function the same. Even if two products look or function the same, it doesn’t mean that they’re competitors.

You need to know who all your competitors are – not just the obvious ones, but the ones flying under the radar as well.

If you understand your competition – both direct and indirect – it will be possible to beat them. If you beat your competition you will have more market shares. With more market share, you will have more customers. And with more customers, you will have higher sales and profit.

In this webinar, Ayat Shukairy – the Conversion Optimization Queen – will show you how to use the Jobs-To-Be-Done framework to unearth the true motivations that persuade a customer to buy from either you or your competitors.

Besides showing you how to understand indirect competitors and how to innovate to compete within the space, in this session Ayat will also show you:

How to design the perfect customer experience by combining the “Jobs To Be Done” theory with conversion rate optimization best practices.
How to unearth the true motivations that persuade a customer to buy from you or walk away.
How to understand indirect competitors and how to innovate to compete within the space.

The post How to Understand and Beat Competitors! appeared first on Invesp.

Staying on Brand with Discounts and Promotions

Ayat Shukairy — Wed, 08 Apr 2020 19:27:39 +0000

Reading Time: 15 minutesDisclaimer: This section is a TL;DR of the main article and it’s for you if you’re not interested in reading the whole article. On the other hand, if you want to read the full blog, just scroll down and you’ll see the introduction.

After many years of working as a CRO professional and with many eCommerce companies, internally, they all operate differently, but to the customer, they’re just copycats of each other.
Take two random eCommerce women’s clothing websites, remove their logos, and you can hardly distinguish between the brands. Most e=Commerce companies use price as the main differentiation factor.

What Branding Is Not

Your website is not your brand; it is just a tool that you use to help disseminate information about what you want your brand to be.
While the design aspects of a website are essential for continuity and awareness, they aren’t what make up the brand.
A brand is about the feelings that are evoked when a consumer interacts with the company, from the ad campaign to the site, to the store, to the customer service, and beyond.

How To Define Your Brand

Your brand is your religion.
David Ogilvy dubbed the “Father of Advertising,” would say that a brand “is the intangible sum of product’s attributes.”
Your brand is how customers perceive your business.
As a business owner, when you understand that your brand is defined by the experiences and interactions customers have had with your business, it’ll help you put the structures in place to develop a good brand you want your customers to remember.

What You Need To Know To Match Promotional Strategies and Discounts To Your Brand

First off, understand customers love deals.
Secondly, make sure you can afford to run discounts.
A grave mistake you can make for your business is rolling out a promotional or discount strategy you can’t afford and is not in line with your brand.
One thing about discounts is that it might be difficult to turn back once you decide to go down that road.
What makes a discount toxic to your brand might not be in the offer’s details but the fact you run it often.

Strategies That Add Value To Your Brand

Differentiate promotions by customer segments.
Define the metrics.

How To Differentiate Your Brand From The Competition

If you remove the company logos of most e-commerce websites, it would not be easy to differentiate one from the other.
The sea of sameness is not only associated with women’s e-commerce sites; different brands across the globe and in virtually every industry are suffering from a crisis of differentiation.
To differentiate your brand, Khalid Saleh, co-founder of Invesp, says ‘your site experience needs to be engaging and unique.’

Below are other ways to escape the sea of sameness.

Differentiating your brand positioning.
Focusing on your brand experience.
Personalizing customer experience.
Pushing the limits of growth.

Here’s A Longer And More Detailed Version Of The Article.

After so many years in this business, and working with e-commerce companies, in particular, it’s interesting to see how they all operate quite differently. But outwardly, and to the customer, most are just copycats of each other.

Take any women’s clothing category page and remove the logo – is there anything different besides the selection of items and the prices? Companies focus too much on price – because that is what they believe will help distinguish them in a crowded market.

But I’d argue we are struggling with monotony over anything. Visitors looking for a unique experience. Visitors are looking for progress to be made. A discount sounds great, but that’s not why I’ll buy the product.

When we discuss our e-commerce client’s strategies to distinguish the brand, more than often the discussion takes a sharp left turn to discounts and promotional strategies. That’s not the strategy for brand distinction. More than often, we need to refocus the discussion.

But the promotional strategy is still important and it should be on-brand. Most “claim” to have a different approach. Some companies say “we don’t do discounts,” yet something sort of an offer will be launching almost weekly. Some companies wear discounts and promotional campaigns like a badge of honor, offering something on their site at any point in time.

But what’s the right approach and strategy when it comes to discounts and promotions? What is too much? And could a discount strategy actually be detrimental to a company? How can a company stay on-brand when it comes to promotional strategy? In-group identity supersedes ease and convenience.

What branding is not

While the design aspects of a brand are important for continuity and awareness, they aren’t what make up the brand.

It’s like saying a business culture is food you offer employees.

The culture is what you do, how you behave and interact, and how that food is eaten (communal, separately, what is discussed, etc).

So the logo and design guidelines keep your brand looking good, but a brand is more than that. A brand is about the feelings that are evoked when a consumer interacts with the company from the ad campaign to the site, to the store, to the customer service and beyond.

A company that has since been dissolved offered accessories on their site. They had a great logo. They had a great design. But their model was basically profiting off a hidden shipping fee. That’s what the brand became. That’s how people perceived it. That’s why interacting with the brand was not a good experience and they generally did not ever come back. The company did not survive.

As a company, you can try to manage the brand image, you can try to manage what people think about you, but you really don’t have any control over their feelings.

Your site is not your brand, it is just a tool that you use to help disseminate information about what you want your brand to be. Your eCommerce site should be built in a way that communicates what you want it to communicate to consumers.

It’s interesting to see how people get so hung up on aesthetics, and nearly forget everything else about the brand. Logos, trademarks and taglines are elements that are part of your brand strategy, but they are not your brand.

Your brand is your religion

David Ogilvy dubbed the “Father of Advertising,” would say of a brand that “it is the intangible sum of product’s attributes.”

Marty Neumeier, a well-known speaker and author of brand-related topics, says: “A brand is not a logo. A brand is not an identity. A brand is not a topic.” But rather he says: “ A brand is a person’s gut feeling about a product, service, or organization.”

So, when we think of the brand, it is how your customers perceive you. Once you understand that your brand is defined by your customers according to the experience they have had with your business, you will be able to fully develop a proper brand that you want to exist in the mind of the consumers.

Everything that you put out, from loyalty programs to the type of products, to descriptions, to interactions, to discounts and promotions and everything in between has to be organized around the brand. So think about it this way, if you turn your brand into a powerful religion, people who convert to it will always disregard alternatives that may come along the way.

It may seem odd, to equate branding and religion but the similarities between the two are striking. I mean, consider the vocabulary associated with both: devotion, dedication, commitment, and faith. Just like religion, brands bind people emotionally, and they connect individuals around a shared purpose, beliefs, and values that defy logic.

Branding and religion may get categorized separately but their intersection is difficult to miss.

Matching Promotional and Discount Strategies to brands

Given that there are different types and sizes of eCommerce websites, there are also various strategies you can employ when offering promos and discounts to your customers. But going in blindly is a costly mistake that should be avoided. A grave mistake you can do for your business is rolling out a promotional or discount strategy that is not in line with your brand. The promotional and discount strategy should be thoroughly vetted for brand consistency. In fact, before we even go there, have you stopped to work out if you can actually afford promotions?

One thing about discounts is that once you decide to go down that road, it might be difficult to turn back. “Acquired through a discount, can only be kept through a discount,” says Elastic Path Ecommerce Strategist, Linda Bustos. She continues:

After asking Invesp’s Project Manager, Hatice Kaya, how they help different businesses match their promotional and discount strategies to their brands, she suggested:

We all know that customers love deals, so it is up to businesses to strategically use discounts ina way that benefits their brands. So a useful rule of thumb is that everything about your promos and discounts should only add and not diminish the value of your brand.

However, it’s unfortunate that we keep on seeing businesses, of all sizes, rolling out discount strategies that become toxic to their brand value. Sometimes what makes a discount work against your brand is not because it is not aligned to your brand, but because you are offering it frequently.

Linda cautions the extensive use of discounts:

Macy’s is a perfect example of a mega eCommerce store that got hit hard – to the point of shutting down one-fifth of their US stores – because of a culture of never-ending discounts. Their brand became associated with promotions to the extent that it was unthinkable for customers to purchase without a discount.

Just for a moment, let’s just assume that you find yourself in a situation where your customers are now programmed to only purchase when a product is on discount. How will you convince them to buy the products at full-price?

Well, in such a case, Linda suggests:

But can you hold the same stance even if you’re in the middle of a crisis that no one knows how it will play out? Linda again:

“We’ve seen in the past even the strongest discount holdouts eventually cave in the face of a tough economy. Abercrombie and Fitch, for example, couldn’t keep full price through the ’08-’09 recession. That brand is barely hanging on a thread today. Brands like Lululemon have held tighter control, selling only direct, and maintaining prestige in the buyer’s mind, but even Lulu isn’t immune to competition, economic factors, and losing its lustre as lifestyle apparel. One day “athleisure” will step aside for the next trend. Lulu and Victoria’s Secret were once the healthiest of apparel brands, with a 20% profit margin! Victoria’s Secret fell out of step with its customer, missing the new trends and staunchly sticking to its old aesthetic and offers. To keep a premium price, you need to maintain a premium, desirable product.”

An effective promotional and discount strategy should not just benefit your business in terms of increasing sales in the short term, but it must bring some sort of value to your brand too. Before offering discounted merchandise, formulate a discount strategy that keeps your brand top of mind and relevant.

Think of it this way, promotional and discounted products are a way of handing people a tangible representation of your brand, you should never make the mistake of launching them unless you’re certain that they will create a powerful brand experience.

So before we can talk about how you can come up with strategies that add value to your brand, let’s take a look at a few examples of eCommerce sites that have used discount strategies to impact their brand in a positive way.

For starters, let’s take a look at Sweet Peas Kidswear’s discounting strategy.

Customers are required to share the business’ product(s) on their personal social media accounts in order to qualify for a 10% discount. What makes this strategy more fascinating is that the brand gains more traction and this makes business to benefit much more than the discount’s monetary value.

It encourages word of mouth from believers of the brand, at the same time, it increases brand awareness. In fact, all the customers who share the company’s products automatically become brand advocates of the company.

If a promo strategy can turn customers into brand advocates, then it means that it can get customers who are so loyal to the brand, isn’t it?

Come to think of it, there are some retailers that provide impressive long-term discount offers that encourage customers to commit to their brand. They take their promo strategies even further by creating membership programs in which members get to enjoy certain deals, discounts, and other benefits.

For example, Restoration Hardware is a high-end furniture company that uses “perks” or discounts to attract new members.

This company provides a significant 25% discount to its members as an added benefit to their membership! While this strategy keeps members’ dues low, it also compels members to become loyal to the brand.

We live in a world where customers are now programmed to expect discounts by default, no matter the size of business. But this can be nightmarish for small businesses who really can’t afford to run discounts throughout the year.

Fortunately, the subtle art of an effective discount strategy doesn’t revolve around dropping your prices instantly. You can offer a discount strategy that entices shoppers to order more items and enjoy the benefit of a bundled pricing.

Indigo Living is a perfect example of a website that usually offers a bulk or bundled discount strategy. As you can see from the above image, the more you buy, the more you get to enjoy benefits.

What is unique about the bulk or bundled discount strategy is that it does not only increase a customer’s average order value, but it also helps foster a positive customer experience by making shoppers believe that they will save more money by buying two or more items together rather than purchasing them individually.

With that said, let’s now talk about how you can come up with strategies that add value to your brand. Here are two ways of matching promotional and discount strategies to a brand:

Differentiate Promotions by customer segments

Deploying a promotion or discount without segmenting your customers is a delicious recipe for disaster. If you have been offering a one-size-fits-all promotional approach, you are missing out on an opportunity to maximize your efficiency and promotion ROI. Identifying customer segments, and creating different versions of promotion so that you resonate with different visitors.

For instance, customers who only purchase when a certain product is on promotion should be targeted by a promotional offer that requires them to increase the number of items in order to get a promotion.

This kind of promotion is known as buy one get one free or BOGO, and it is one of the popular promotion tactics used by both eCommerce and brick-and-mortar stores. BOGO promos come in different variations as shown in the image above. But if your customers are not price-sensitive, then your promotions should offer customers a lower discount percentage.

The other way of going about this is by offering discounts based on customer type. Femella Fashions Limited is a good example of an online retailer that uses this promotional tactic.

They offer a 15% discount to every visitor who purchases for the first time and a 10% discount on repeat purchases.

2. Define the Metrics

The next step involves looking at the metrics and numbers behind your campaign. Ask yourself the following questions:

What exactly are you trying to achieve (your primary objective)?
How will I know if I have achieved it? (What’s the best indicator of success?).

Clearly articulated answers to the above questions will help you nail down your key performance indicators and the metrics you’ll focus on when running promotions.

In the eCommerce industry, important metrics for promos and discounts can vary from one shop to the other, and they tend to evolve as the business grows over time. Although the metrics can differ from one business to the other, most eCommerce promotional strategies are built upon metrics such as doubling sales, retaining customers, or increasing the AOV.

Escaping the world of Sameness

It’s easy to be swayed by peer pressure and this is something that we often see from eCommerce sites who offer promos just because their competitors are doing so. This wave has created a problem called homogenous retail agglomeration, or what marketers tend to call the “sea of sameness.”

Yes, we are actually living in a world where e-commerce sameness makes it difficult to decide between brands. If you remove the company logos of most e-commerce websites, it would be difficult to differentiate one from the other.

Look at the above homepages of two women’s e-commerce shops, can you really tell the meaningful difference between them? Even the one below doesn’t quite spell out a meaningful difference, does it?

The sea of sameness is not only associated with women’s e-commerce sites, different brands across the globe and in virtually every industry are suffering from a crisis of differentiation. There’s no differentiation, even on the promotional and discount strategies that these websites employ.

When it comes to identifying what causes this proverbial “sea of sameness” that e-commerce stores are drowning in, Khalid says:

If you take a closer look at eCommerce stores, it’s as if one store doesn’t want to lose a sale to another, so it makes sure to carry the same products, experience, promotions, and pricing as its competitors. There seems to be no meaningful differentiation or any clear value proposition – they all have a sense of uniformity here, there, and everywhere.

On federal holidays such as Black Friday, Columbus Day, President’s Day, MLK Day, you’d expect every eCommerce store across the US to have discount strategies tailored for those particular days every year. But that’s normal, the only problem is that most of those promos and discount strategies are tailored the same way.

This actually makes it difficult for brands to gain a huge market share in a market where customers see you and your competitors as interchangeable.

Yes, I get it.

Being meaningful different is hard, but not being meaningful can cost you a lot of money by doing what everyone else is doing.

As Linda put it:

In other words, it’s possible to strike out for the unchartered waters while you’re still selling the same products as your competitors. However, it takes a lot of courage to escape the “sea of sameness” or to “dare to be different”. Even mega-brands put their reputations on the line when they deviate from expectations.

Escaping the sea of sameness is also worth it as it provides customers with what they really want – relevant, unique, on-brand differentiation – but you have to bear in mind that it is a long-term objective that doesn’t happen in a heartbeat. It is anxiety-provoking at so many levels, but you can achieve it by doing this:

1. Differentiating your brand positioning

To resonate with stakeholders or to attract customers, you have to differentiate your brand by establishing a compelling and unique proposition. Differentiating your brand position means defining what your brand is not rather than what it is. And very often this involves specialization and avoiding offering every kind of product to every kind of customer.

Brand positioning, in the eCommerce space, means that every touchpoint that your customers have with your brand — from the product or service you offer to experience you deliver — must be rooted in and consistent with your unique selling proposition.

2. Focusing on your Brand Experience

Smart marketers know that you can deliver the brand through its customer experience. When one brand starts offering free shipping, or same-day delivery service, competitors are more likely to do the same thing. However, consistent with the point above about unique propositions, by definition, different brands should provide different experiences.

It’s best your business should focus more on brand experience instead of customer experience. This means that every touchpoint along the customer journey should be inspired and rooted in your brand’s unique proposition. By so doing, your brand is empowered to detect what you want your interactions with your customers to look like.

3. Personalizing Customer Experience

Nowadays, advances in technology along with more creative practices makes it easy to customize experiences. If anything, customers feel appreciated when you provide personalized offers and experiences. Try not to appear too knowledgeable, but leverage customer information to create better brand experiences.

But how do you do that?

An eCommerce client of ours – who’s into women’s clothing – was trying to penetrate this very crowded market.

When we conducted JTBD (Jobs To Be Done) customer interviews we found that, for this particular women’s clothing store, women who were in some sort of transition always turned to this brand. The brand offered nice looking styles but delivered great feeling and comfortable looks as well.

So with such insights in mind, it becomes easy to personalize the whole website and meet the needs of users while staying on the brand.

4. Pushing the Limits of Growth

There are limits to growth, especially in the eCommerce industry.

Brands practically apply the principle of minimum differentiation so as to make themselves identical to appeal to the broadest segment of the market. This works, to a point. But it gives customers no reason to buy from your store.

I mean what’s the incentive of buying Store X when Store Y and Store Z offer the same value?

Pushing the limits of growth begins with determining where the brand’s boundaries of extension lie. Doing so will help you avoid taking the plunge or blindly following the bandwagon.

Conclusion: staying on-brand doesn’t happen overnight

We’ve offered a lot of advice on how to handle discounts and promotions in a way that benefits your brand. When you decide to offer promotions, don’t just do it because you want to increase sales –but look at the bigger picture, think of how will your promotions benefit your brand? Will the promotion increase or diminish the value of our brand?

Of course, staying on-brand with promotions is not an easy feat especially when the business always evolves or when the needs of the customer change. But as difficult as it may be, your promotional strategy has to be matched to your brand and not the other way round.

The post Staying on Brand with Discounts and Promotions appeared first on Invesp.

Ayat Shukairy, Author at Invesp

AN EXPERT GUIDE TO OPTIMIZE YOUR SAAS STRATEGY

Visitors Aren’t Converting?

We’ll Show You Why

How To Use Qualitative And Quantitative Data To Collect Customer Insight

How To Quantify Your Website Personas.

How To Define Your Saas Key Metric Value

How To Create SaaS Pricing Tier

How To Design Your Pricing Page

How To Optimize Your SaaS Page Design Using Charm Pricing

1. Use qualitative and quantitative data to collect customer insights

2. Quantify your website personas with data findings from qualitative and quantitative research

3. Define your SaaS key value metric

4. Create SaaS pricing tiers

1. Define the minimum amount a customer must pay to cover your costs.

2. Define the maximum amount a customer is willing to pay for your software

3. Assess competitive pricing

4. Map out your pricing tiers

5. Align your value metric with pricing tiers based on buyer personas

5. Design Your Pricing Page

Define the elements of your pricing page

Optimize your SAAS page design

1. Use charm pricing

2. Use “useless” pricing plan

3. Highlight your best-converting plan

4. Tailor plan name and description

5. Anchor your prices

6. Address customer’s fears, uncertainties, and doubts

7. Test

Know exactly what’s stopping conversions —and how to fix it.

Over to you

A GUIDE TO CONDUCTING QUALITATIVE USABILITY STUDIES

Why is that?

What is Qualitative Research?

What is Quantitative Research?

The Difference Between Quantitative and Qualitative Research

Should you start with quantitative or qualitative research?

What Do You Need to Conduct Qualitative Research?

Step 1: Planning Your Qualitative Research

a. Identify the Goal of the Research

b. Select the Research Method

c. Design Your Research Questions

d. Recruit Participants

Should I Offer Research Participants a Compensation?

Sample Size and Diversity for Qualitative Research

Step 2: Conducting Your Research

One-on-One Interviews

Focus Groups

Usability Studies

Case Study:

Surveys

How Many Questions Should I Use in My Survey?

Best Practices for Getting the Most of Your Online Surveys

1. Group your questions

2. Keep It short

3. Only ask important questions

4. Pay Close Attention to Email invites

5. Incentivize participants

6. Test Everything about Your Survey

Step 3: Analyzing Research Results

Transcribing Your Data

Data-Mining: Looking for Insights

Getting Intimate with Collected Data

Coding the Transcripts

Defining Themes & Looking for Patterns

Deep Analysis and Marketing Insights

How to Create a Robust Conversion Optimization Strategy?

1. Identify Your Website Conversion Goals

2. Prioritize Your Goals

3. Identify and Track The Conversion Paths

4. Detect Macro Conversions and Micro Conversions

5. Evaluate Conversion Problems On Your Web Pages

Landing Pages:

Offer pages:

Support pages:

Conversion goal pages:

6. Track It All

7. Calculating Your Website Conversion Rate

Overall conversion rate

Path conversion rate

Visitors Aren’t
Converting?

Visitors Aren’t
Converting?