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Flip The Switch Episode 45: Cro Science

August 29, 2018
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PAT: Today on Flip the Switch. We dive into the big 3 as Apple becomes the first trillion dollar company. Facebook takes a big loss. And Amazon continues to become more profitable.

Our main topic is about Conversion Rate Optimization, which is the process of making your website better for your customers. And making you more money. We talk data points and quick tricks that have a significant impact on the website’s conversion rate.

Let’s get into it.

00:59 AUSTIN: Welcome to Flip the Switch presented by Power Digital Marketing. This is episode number 45.

01:04 PAT: Number 45. Our Pedro Martinez episode.

01:05 AUSTIN: Oh yes. We were talking about him throwing Don Zimmer off the mound right before this. Some of you may not know that. Yankees coach from back in the day…

01:15 PAT: Charged at him.

01:17 AUSTIN: He charged at him and then he threw him. So that’s the type of energy that we’re bringing today, I think? (laughing)

01:21 PAT: I think that’s how we’re going to tie that back.

01:23 AUSTIN: If anybody charges the mound, we’re throwing them off…

01:24 JOE: Grabbing them by the ears and throwing them in the dirt.

01:25 PAT: Exactly.

01:26 AUSTIN: Want to say real quick, this is the first time we’ve had all four of us in the room in a while. Patrick was out of town. And how was Thailand if we could talk about that just for a split second.

01:36 PAT: It was really, really good. But I just found myself missing bringing great content to our listeners.

01:41 AUSTIN: That’s what I like to hear.

01:42 PAT: I’m excited to be back in the studio.

01:43 AUSTIN: That’s the best answer you could have brought. And so let’s go ahead and jump into it then. Let’s start with business news and trends and we’re going to start with Apple.

01:51 PAT: Yeah. So as you guys all saw basically Q2 came to an end and earnings reports are starting to come out for some of the biggest companies in the world. One of which being Apple.

So a lot of news has come out about them in the last few days. But basically it all started with a very strong earnings report that they were able to deliver. I believe it was late last week, or early this week.

A few key points from their earning report. So their earnings grew per share grew by 40% year-over-year. Their revenue grew by 17% year-over-year. Let’s take a quick second to think about that. A 40% increase in their earnings per share. That’s pretty crazy when you think about how many shares are just out there right now. They’ve split stocks like 15 times. The fact that you can buy an Apple stock for $200 is crazy.

02:35 AUSTIN: Right. And the velocity of trades is extremely high for this company. There’s a lot of trading going on, but it’s such a valuable stock that people have held onto it. So you’re not seeing a ton of shorts on this stock in general, which is not suppressing the price.

That happens a lot to companies that might be coming up. And there’s just a market for shorting them, because of past reasons, or just financially it makes sense to traders.

We don’t really see that with Apple. People are holding long. And people that invested a long time ago still have their shares as well. This allows the market to grow as well as the company does better. And clearly it’s working.

03:07 PAT: Yeah. Exactly. And as we’re going to get into, there’s a lot of diversity in their offerings that allow them to have that kind of insurance.

So another thing though, 41.3 million iPhones were shipped during the 3rd quarter. That’s basically flat from the same time one year ago. The difference though is that these iPhones cost a $1000 and the iPhones that they were shipping before only cost like 600, so they’re making more in AOV than they were before. Which is helping that revenue pop.

03:30 AUSTIN: So total number of iPhones sold would be down if we’re thinking about this. But the price went up so much that they’re still making just as much money. That’s a pretty incredible fact right there.

03:43 PAT: Yeah, it’s crazy. They sold 41.3 million this year versus 41.79 million.

03:46 AUSTIN: It’s not that much of a difference.

03:49 PAT: Exactly. So when you factor that in with the 300 dollar per unit price increase it offsets that difference.

03:52 AUSTIN: Yeah. That’s pretty incredible. Also, can we take a moment to think about how they are the first trillion dollar company?

04:02 PAT: First trillion dollar company. Round of applause. (Clapping)

04:05 JOE: I’m surprised it wasn’t more of headline news. I feel like I didn’t find out about it till the evening. And kind of found out about it through Instagram actually. And so I was kind of curious.

04:17 AUSTIN: I wonder if just ties into Apple’s whole entire brand. That they’re really not in your face as much with their advertising and maybe they feel the same way about this.

04:24 PAT: Well, I think there’s that. I think also it’s just the fact that there was almost that expectation. It’s been common chatter among Wall Street investors and people that trade consistently. “Apple’s going to be the first trillion dollar company.”

For a while they were like, “Amazon. Maybe Amazon.” But no it’s Apple.

We kind of knew that it was going to be Apple. A really interesting article came out about that in the New York Times, actually. Talking about how this time a decade ago, same month, they were about to go bankrupt. Or, 2 decades ago.

04:48 AUSTIN: 2 decades. 20 years ago.

04:50 PAT: Yeah, 2 decades ago. They were about to go bankrupt. And now they’re the first trillion dollar company in history.

A couple key moves that have helped with this. One, they’ve been building up their cash that they have on hand a lot. And they made a big move earlier last year. Pretty much they 243 billion dollars in cash on hand right now. That’s 23.5 billion lower than they had in the March quarter, but they announced 100 billion dollar buy-back program and also increased their dividend payout by 16% incentivizing more people to buy into the stock. Which helps with that valuation that they got.

So that’s definitely one factor. Another big factor for them… and I’m trying to find the article. I know that it was on CNBC or CNN Money–one of the two–but they were talking about how their services sector is contributing to a greater and greater percentage of their overall revenue. So their services being like Apple Pay, Apple music, subscription based services. They’re making a lot more money and they are pacing to contribute to a higher percentage of that revenue diversification year-over-year.

06:01 AUSTIN: It’s really interesting because we’ve been tough on their other products. I think that’s fair to say. The way we talk about it, for instance, their home products–their smart home products–are maybe not doing as well. And we really are critical of those.

But they are such a cash cow with their phones, and what that provides. It doesn’t necessarily matter. And we see this with Google too. Where their search engine… their advertising revenue from their search engine is so significant that their other products are more so, “If this grows in revenue, it’s like the cherry on top.” Good way to think about it. Right?

And clearly the projections from a company 3, 5, 10 years are that they’re going to be continuing to grow. Or people wouldn’t be investing in them, right?

So the people that are creating these valuations on Wall Street, take a really hard look at where a company is going. And then they project their share price, based on that.

And they’re actually beating what they think-what Wall Street thinks–their share price is going to be every quarter. And their earnings per share is the big contributor to this.

06:57 PAT: Yeah. 100%. And we could even see that… so there’s that point. The earnings per share is growing. And a portion of that obviously is dedicated to the services revenue piece. So they posted almost 10 billion in services revenue for 3rd quarter. Which is a 28% increase since last year. And then that also beats out Wall Street estimates by 300 million dollars.

07:21 AUSTIN: I’m just remembering 2016–December, about November 2016–the share price for Apple was around 89 to 90 dollars. I remember talking about it in the office with a few people, cause it fell from around 105, 110. “Wow, this is incredible.” And then they never looked back. I think a Month later they were at 120 and now we’re looking at just above 200.

It’s such a significant gain for a highly coveted stock, and a really massive company. To have their share price go up that much. And they’ve done everything so perfectly to make sure that this continues. And a lot of that is that earnings per share, and then that cash on hand. The amount of cash that they have on hand allows them to be very variable based with what they do with and then where they’re investing their money, and rolling out new programs.

Like a buy-back program, so to speak, they have to have cash to do that. And all these things are contributing to just an extremely successful, perfectly modeled company.

08:20 PAT: Yup. Hats off to you Tim Cook. You had your work cut out for you, and you really delivered.

08:25 AUSTIN: I know. Isn’t it incredible that everyone was like, “Oh, he’ll never be Steve Jobs.”

08:28 PAT: I know. “He’s never going to do it.” We said that on this show. I said that.

08:30 AUSTIN: And he’s not. He just isn’t. It’s just a different way to look at his company.

08:36 PAT: He’s a COO. He’s an Operating Officer. He looks at things objectively. And Steve Jobs laid the framework…

08:40 AUSTIN: Visionary.

08:42 PAT: Exactly. So he scaled it. Jobs created it. First trillion dollar company in history.

Let’s talk about a company that is completely blowing it really quickly.

08:51 AUSTIN: (laughing) I was just about to say, let’s go the complete opposite way and talk about our good friend Mark Zuckerberg…

08:56 PAT: Mark Zuckerberg and Facebook obviously. So it came out in the news late last week that Facebook’s shares took a huge tumble. Their price… I mean, it was one of the biggest single day decreases that we’ve ever seen in history. Shares of Facebook fell 19% on Thursday. Which wiped out about 120 billion dollars of shareholder wealth. That’s one of the biggest…

This is reported by The New York Times–this is among the largest one day destructions of market value that a company has ever suffered.

09:30 AUSTIN: That’s tough.

09:31 PAT: That is crazy.

09:32 AUSTIN: To make this even worse is that they were up… the stock was up more than 23% for the year. So year-to-date looking at January. And then once they reported earnings they lost all of that. So all the growth that they’d seen in the past 7 months, simply vanished in one week from one bad quarterly earnings report.

So looking… let’s juxtapose that with what we just saw with Apple. And how they continue to beat their quarterly earnings every single month–every single quarter. And how important these quarterly earnings are. It truly defines your company every 3 months on where they’re going to head.

And with Facebook, now they have to start over, pretty much from January and say, “How do we get this back?”

10:10 PAT: Well let’s think about the causal factors that went into making this happen. So there were already gonna be disappointed investors as soon as the election investigation came to fruition. We saw that start to happen.

We still had faith that Mark Zuckerberg is going to be able to pull his company out of this, because he has a fiduciary duty to do so, right?

Then we see more bad news coming out. I think the fact that they reported poor second quarter earnings and so there’s that. That already is going to discourage people from investing.

New advertising regulations rolling out nation-wide, worldwide–that is going to slow their growth.

And then the last piece, they also warned investors that there’s going to be a sharp slowdown in sales growth. Because they’re going to put privacy first.

Woah. Like you know what I mean? Like, isn’t the whole point trying to get people to stay? As an investor why would I buy into a company where they’re like, “Hey, you’re not going to see very much growth for probably an indefinite period of time. But we can’t help it. It’s just the current climate and whatever…”

11:16 AUSTIN: Yeah. I don’t know what… there’s no other point to invest in a company. If they’re going to slow sales-wise.

I think the one thing that you could look at for this company–and we kind of talked about this with Charlie Ninegar from Spy Optic is that you give up revenue in the short-term to gain it long-term.

So that might be… I’m playing a little bit of Devil’s Advocate here… with Facebook they’re saying we have to do this correctly so that we grow long-term and they know that people’s information is how they’re going to make money. But they need to use it correctly. Or maybe build that out correctly. So that could be coming into play.

But I think it’s really hard to sit here and say that this is a good situation. Cause it’s definitely not.

11:54 PAT: Trust me. I get that piece of it. And I understand trying to fix the company image. It’s probably in the long-term a good thing. But there are factors at play right now that an intelligent and savvy investor can’t ignore. Their Daily Active User count decreased month-over-month by 27 million users. Biggest drop that they’ve ever seen.

They also year-over-year gained like 22 million daily active users or something like that? Or is it 2 million/?

12:20 AUSTIN: This past month they had 22 million new Active Users, which was the slowest… quarterly, that was the slowest growth they’ve had since 2011. So 7 years ago was the last time that they’ve had 22 million new Active Daily Users per quarter.

12:35 PAT: All right. So think about that. Pair that with the fact that other giants in the tech industry like Apple increased their share prices by 15%. Alphabet gained 20%. Amazon surged 50%. Netflix is up 90%.

The fact that that is happening and the growth in that… on that particular platform is slowing… it’s not like they’re not growing. It’s they are losing people who have already been exposed to all the benefit that Facebook has to offer. You’re never going to get them back. You know what I mean? You’re never going to get them back.

The bright side for Zuckerberg, like we talked about off the air a little bit, is that Instagram is doing well and growing rapidly.

13:10 AUSTIN: That’s the thing that I think about too in this situation is… when you hear Facebook you don’t necessarily think immediately of Instagram. And that all follows. We’re thinking of Facebook as the holding company and what’s traded.

So All of their subsidiaries that fall under that umbrella company, you need to think of that also. We know Instagram’s doing very well. I think if we pulled their Daily Active User count quarter over quarter it’s going to be up. And they’re definitely making a lot of things in there to make it more revenue driven. So for advertisers and influencers, it’s a place where you can sell your product and make money.

So that’s gotta be in the forefront of their mind right now. But that doesn’t take away from the fact that Facebook has always been and will be their legacy product that generates a ton of revenue for them. It’s a nation-wide tool that everyone has accessible at this point in their life.

It’s obviously psychologically important to a lot of people. So your demos always going to be there. And the core of your product is based on Facebook, the social media service. So you can imagine they’re kind of struggling right now with what to do.

14:10 PAT: Yeah. Exactly. There’s a little bit of that identity crisis I think. And just all things are pointing in a bad direction right now. I’m very interested to see what they do to try to bounce back from this. I don’t have any ideas. I think that Zuckerberg is smarter than both of us. Combined. 10-fold. So I think that he may have…

14:26 AUSTIN: I don’t know about Joe though. Joe’s pretty smart.

14:29 PAT: Joe’s a pretty smart guy. Him and Zuck should go head-to-head. But we’ll see what he does and we will definitely be bringing that content to you guys on the show.

14:36 AUSTIN: All right. Last one. We’re going to be talking a little bit about Amazon… so we’ve decided to hit the big 3 today.

14:43 PAT: Yeah, there’s a huge surprise. Amazon, Facebook and Apple in the same day for us.

14:45 AUSTIN: Well, it’s been a while since we were able to have just us on to talk about news. We’ve had a lot of guests…

14:50 PAT: Yeah. This is nice.

14:52 AUSTIN: So we thought, “Let’s bring it back with what we know.” And we love talking about Bezos, we love Zuckerberg, and we love everything that is the Big 3. So let’s go ahead and jump into Amazon. They’re doing well. So no surprise here. They eclipsed a 1000 dollars in their share price. He became the richest man in the world… I don’t know if he’s still holding the title, but he did have it for a little bit after their really big Prime day.

15:15 PAT: 150 billion dollar net worth, or something like that. Which is the most by several tens of billions of dollars in history.

15:21 AUSTIN: Yeah. That’s pretty incredible. So they were slightly under what Wall Street analysts expected. So they came in at 59.2 billion dollars.

15:30 PAT: And no one cares.

15:31 AUSTIN: And nobody care, right? So I believe their share price was up a little bit, right?

15:35 PAT: Yeah. So their share price definitely increased after the earnings call. And one big reason why is that their net profitability has increased every quarter. And they have done that for 13 straight quarters.

So there are often times–especially in a retail heavy space–a company will take a loss in some quarters, knowing that they will make it back in Q4 during the holiday rush. Amazon has figured out how to position themselves–as we know–as that evergreen source for just everyday shopping. Anything that you want. And because of that, yeah, they took a couple losses in 2014, but since Q2 of 2015, through Q2 of 2018 they have increased their profitability exponentially.

And that’s what oftentimes people are looking at when they invest in a company. “How effectively are they making money?” Not how effectively are they generating revenue, right?

16:24 AUSTIN: Yeah, and with the Amazon Web Services… it’s such a cash cow for them that people don’t think about all the time. You think of Amazon, you think of their e-commerce platform. You’re buying and selling. It’s personalized, it’s international. It’s streamlined with logistics.

But Amazon web services is a cloud service that allows people to store their data on there. And that’s anybody from a small business, a mom and pop shop to an enterprise business. A multinational corporation. And they are making so much money on this, because they’re selling cloud storage space. And for them they already have pretty much like a fixed cost of what that’s going to cost them each month to operate. You think about energy usage and these data service areas that they have to have and they’re probably all over the world in cheap locations. And that operating margin has just been growing.

It’s incredible. As they actually on-board more people into their platform, they’re making more money. Which just shows that their cost-to-operate isn’t changing. They’re simply just creating more revenue.

17:21 PAT: It’s the most out of any segment. So their operating margin by segment has increased and has consistently for AWS been at 20% or higher. Most recently at 26.9%.

I also want to steer the focus momentarily over to their other segment. So they are selling ad space through this other segment that they call… it’s just how they group it I guess… Their other business segment consists primarily of money that it generates from selling ad space on its websites. It rose well over 100% year-over-year.

So digital marketing update. If you’re not advertising on Amazon, you need to be advertising on Amazon. The capabilities are there. And the data is telling us that your competitors are likely doing this as well if you’re in retail.

18:03 JOE: I read the statistic where Jeff Bezos’ parents invested $245,000 in Amazon in the beginning. They just kind of believed in him. And that 245,000 dollar investment is now worth over 30 billion. So his parents are billionaires too.

18:20 PAT: Good. Good for him.

18:23 AUSTIN: That is incredible.

Honestly, I would run through a brick wall if my parents invested $245,000 in my start-up company.

18:29 PAT: I would run through a brick wall for 245 dollars.

18:36 AUSTIN: (laughing) That’s really good.

Okay. Getting back on track a little bit. I do want to finish off with Amazon on a little bit of some bad stuff that maybe isn’t being talked about. And all this stuff that’s maybe being overshadowed right now, because they’re doing so well.

There’s been a lot of issues with their workers going on strike at their warehouses. I don’t know if you guys have seen this at all, but there’s been a lot of issues with pay, and a lot of issues with work environment.

I have a couple friends who are more on the management side of that. Specifically in Texas. Who have talked about a lot of issues going on. It’s kind of an unsafe environment. The people that they’re hiring are not maybe the best citizens. And it’s becoming a bit of an issue.

19:15 PAT: Yeah, it’s a cultural problem that they’re having.

19:17 AUSTIN: On Prime Day there actually was a pretty big holdout with a lot of the employees, where they just said they weren’t going to show up to work. And they just didn’t. And there’s just a lot of growing unrest. And of course they planned it that day, because they knew that was going to be logistically the biggest day for them moving product.

So I think that this is something to pay attention to if you’re looking to invest in Amazon. Paying attention to what they’re going to do. Because this is a growing problem. And they need more operating centers. And they need the people that work in there to be smarter and more efficient if they’re going to continue to grow. And I think that this is an actual problem for them.

19:51 PAT: Yeah, and I think that a lot of it does… it’s funny, you read about it in a lot of like motivational books or management and leadership style books. There’s two different schools of leadership and management thought.

One is the old-school thought where people are consequence driven. “I’m going to do this in avoidance of getting reprimanded or fired.”

What science has shown… There’s actually a really good book about this called, “Drive.” I’ll find the author and we’ll drop it on our forum later. But it talks about how statistically speaking it has been empirically proven that showing people… giving people motivation and showing the benefit of what they can achieve is actually more of a driving factor in efficiency and productivity than fear. Fear inhibits decision making abilities and can cloud your judgement.

And I think that what may be happening… again, it’s a little bit speculative… but I think that what may be happening is they put so much pressure on some of these operating centers because of that one-day turnaround. Because of the volume that they’re pushing. And because they’re trying to keep their margins as low as they can in terms of operating costs. Because they’re obviously a huge company. A ton of people are invested in them. They need to make that margin.

I think they’re trying to hire as little people as possible to do the most work as possible. By creating an environment that’s a little bit fear based.

And I think that that’s obviously a cultural problem. We see that more and more a company culture is starting to trickle into its effectiveness in the market. So that’s something that we’re going to want to keep an eye on.

But if anybody could figure it out, think it’s going to be Jeff.

21:14 AUSTIN: Yeah, it’s going to be Bezos for sure.

Main topic today. We’re going to be talking about Conversion Rate Optimization. That is CRO, as it’s known in the biz.

21:23 PAT: CRO baby.

21:25 JOE: John’s throwing up gang signs right now.

21:26 PAT: Yeah, John is throwing up west-side, east-side. Bloods all that stuff.

21:30 JOHN: I represent.

21:31 AUSTIN: This is John’s a web developer, he does a lot of CRO analysis for our clients. What that entails is we collect a lot of data on where people are scrolling and clicking on websites. Are they going halfway down the page? Are they clicking to a category page? Are they bouncing right away–meaning that they’re not finding what they want?

And a lot of the discussions we’ve been having with our clients led us to this greater idea of what’s the best thing to do here? What’s… if we could give people information, what would we tell them to do? What does it look like? And what’s something that you could take away from a conversation with us that you could implement on your website?

22:08 JOHN: Definitely. And I think that’s what we’ll go through today is just some of the lowest hanging fruit. Some digital marketing jargon for you there.

But of what you can do on your website or different things that you can experiment with. Because that’s what it is, it’s experimenting. Some may consider me even a scientist in some realms.

22:29 PAT: Yeah. Yeah, scientist. Doctor Saunders.

No, this is a really interesting topic to delve into a little bit, because we’ve seen even the smallest tweaks have some of the biggest impacts for our clients. And it totally depends on what you’re testing and the methodology behind the test.

And this is where it’s really important to leverage somebody that has that knowledge of user behavior and UX like John.

Because anybody can figure out how to deploy a test on this software. Like that material exists.

The crux of it, and where the difference comes into play when you leverage a professional like John is you put actual methodology and strategy behind why that test can be impactful for what the client’s trying to do.

23:09 JOHN: Yeah. Definitely. And I think a lot of it comes down to the way that you look at CRO, because a lot of people will say, “Let’s test this entire new design against our old design.” Which, yes, that is a CRO test and yes you can get results from that. But what we’re talking about today is just this small, tiny little tweaks you can make that can make a giant difference for your business, or for the effectiveness of any page on your website.

23:35 AUSTIN: Let’s run through a couple of examples that we mean. Just so you can get an understanding of the small tweaks that we’re looking at. So something right off the bat that you look at that’s like, “Hey, this is quick and easy and will make a difference.”

23:46 JOHN: So one of the big things–or the biggest thing that we look at with CRO is definitely the calls to action on a page. Or the CTAs.

There’s small tweaks that you can make to those or there’s big tweaks. Sometimes if it’s a button somewhere, it’s looking at the placement of that button. So if that button is at the very bottom of a page, and there’s nothing else on the page that’s going to drive somebody to do what you want them to do, we would let’s test moving that button to the top of the page. That’s a very, very common one that we have. And it’s very, very effective. Something that works, I would say, 90% of the time.

Another thing has to do with color. That’s probably the most popular one that you hear about with CRO testing is “Let’s change the button color and see how that’s going to do.”

24:33 PAT: How impactful is that really, though?

24:36 JOHN: Not very impactful. Because color for one button… it’s more about the content nowadays than it has to do with the button. And we’re kind of not… we’re underestimating what a user is thinking when we think that, “Oh, if my I change my button color to green, it’s automatically going to cause somebody to click on it.”

Users are looking for the actual content. Or they’re looking for the button itself. That’s why moving a button up on the page is making the location a better spot. But then, what I would test before color is the actual message on the button. So take ten different little blurbs that you would put on that button and test them all against each other and see which one works the best.

25:20 PAT: Right. So it’s like to see if people are more responsive to “Shop now” or like, “Find your blank here.” Or whatever is going to resonate with the audience the best.

This is all really good, but this is a very data driven process it sounds like. And what we have found–at least in some of the case studies that we have here–a lot of the changes that you can make are pretty intuitive. Sometimes you don’t really need to wait for the data to come through from the data to make a change.

And I just want to open up that discussion around how to dichotomize between those two. How do we know… how as a… Let’s say I’m like managing an account and I think that there’s probably opportunity to improve the CRO of a page. How do I know when it is the right time to test that? Versus when I can just be like, “This makes sense, and I should do it?”

26:10 JOHN: Right. We were joking about the scientist thing earlier, but with CRO the only time that you want to test is when you don’t know something. So if you do know something by looking at the CRO analysis. Heat maps, Scroll maps, those sort of things. And you see a very consistent behavior and you have a clear idea of what’s going on, that’s when you make a change.

26:28 PAT: Right.

26:29 JOHN: But if I go to a page and I don’t know what’s going on, or I don’t know why somebody’s not converting, I’m going to gather as many ideas of how to improve that and then test it.

So a lot of people will think, “Oh, maybe I should test this because of this behavior.” Yes, but you’re testing ultimately to find out something that you don’t know.

26:46 PAT: Yeah.

26:48 AUSTIN: And maybe you don’t have the software provided to collect heat maps and scroll maps and all these things. Think about the purpose of the page. So think of yourself as your potential customer and you’ve navigated to this site. Maybe it’s through organic search or a paid ad. They’re landing on it. What do they want to get out of it? What do you need them to get out of it?

Is it that they’re going to be downloading an e-book to learn more about your business? Or are they buying a product? Or is it another point? I don’t know. You know your business better than us.

But the point is is think about what they want to get out of the page. And then how to give them that. So if it’s something where I don’t want them to… I want them to click on this but they have to scroll through all this text to get to it. That’s something you’re going to want to move up the page, right?

So just be rational about what your customer needs when they hit that page.

27:33 JOHN: Yeah, you definitely have to put yourself in the shoes of your customer or user to make any of it work.

27:39 JOE: Yeah. A lot of it can be pretty technical and obviously we work in this type of stuff every day, so it’s clear to us. But I feel like it’s one of those things that should be clear to anyone. And just make sense.

“If this was difficult for me to do this, what was easier to do it? Whether that’s you’re trying to check-out on a website and you have to go through 4 pages to get to that checkout, and people are starting to drop off. Whereas people like Amazon, if you are in your account, you can just do a one swipe, checkout, done.

And things like that. That just really improve, and get people to convert and get people to do what you want. It just makes sense.

28:09 AUSTIN: And we know that that ease of checkout is becoming so important. So also being aware of what is culturally acceptable maybe. Or what a lot of other websites are doing too. Can be really helpful.

So we know Amazon makes it super-easy. So maybe you should make your checkout process super-easy as well, because you know someone’s probably thinking about Amazon, when they’re buying something on your website.

28:30 PAT: Yeah. They’re like, “How much easier would this… If they sold this same thing on Amazon?”

28:34 AUSTIN: And then sure enough they do.

28:35 PAT: Exactly.

28:37 AUSTIN: So make sure that you mimic also what your competition is doing.

28:39 JOHN: But you got to also think about… like you said… thinking about the customer. Where I can think of a use-case with us where we were A/B testing two different landing pages against each other for a downloadable. A free e-book. And we were testing either a 2 step checkout–where you click a button, a lightbox comes up, and that’s where you fill out the form.

Versus testing with the form directly on the page. Above the fold. And realizing that the customer we are going after is a lot older and we didn’t need to make the most sleek looking functionality type of landing page to do that. Rather just give them exactly what they’re going to get. Show them what they’re going to do. And make it so much easier.

And finding out when that 2-step process wasn’t working in the beginning. Switching it over to just making it very simplified. Not really thinking about those types of things. And the sleekness of it.

And then right there. Fixed the problem. And the conversions just started rolling through.

29:32 PAT: And I think the point that gets missed really often with CRO and something that we’ve realized for sure here–these tests, the reason that it’s important to more effectively convert your onsite traffic is because that has the biggest… that’s like the biggest lever that you can pull that will help drive revenue or leads to you. So if you think about it this way, you have a set number of people that already come to your website, right?

And you have a conversion rate that’s like 1%. Let’s say that you have 100 people that come to your website. That means 1 person typically monthly, is going to buy something.

Now let’s look at 2 different scenarios. You can either try to increase your conversion rate to 2% or not have to pay a dollar to acquire another 100 users to make that happen. Or you can do the opposite.

Now if I’m a business owner, I am going to try to milk my website for every possible dollar that it can provide me, because I’m not paying to acquire that traffic. If I can avoid paying money to get new traffic to the website, whether that’s through ads, whether it’s through an outbound program, word-of-mouth, SEO, that all costs money at the end of the day. And you do need a certain amount of traffic for things to be significant, but once they’re on the site, CRO is what drives your business.

30:43 AUSTIN: And I think this happens a lot–that was a great example Pat–where you hire an SEO agency so to speak, because you think that they’re going to bring you more business. And they might just bring you more traffic. And there’s a significant difference between more business and more traffic. And more business falls under CRO.

Because the traffic itself isn’t converting. So think about that also. What do you really need? Do you need more traffic?

Or do you need to make your experience better for your customer.

31:11 PAT: And think about it this way, too. CRO drives every aspect of your business, not just online. When you have a sales team that’s trying to close these leads, what do you care about more? How many leads they get? Or how many they are able to prospect?

Or do you care more about how often they’re closing those leads and making the most of their time? If I’m a business owner, I care way more about how effectively they’re making use of their time and driving money to my bottom-line than how many prospects they’re able to get in our system.

At a certain point it almost doesn’t even make sense to keep getting prospects if you can’t convert them. So you need to know when you should prioritizing what. You look at your business issues. You see what the problem is and where the problem lies. Isolate it and adjust it.

And sometimes it takes that outside pair of eyes. Sometimes it takes a guy like John to look at your website, and go like, “Oh. If I was a customer coming here, I would have a lot of confusion. I’d have a lot of problems checking out. I wouldn’t buy even if this was the best product in the world.

32:06 JOHN: Right. Yeah, I think it’s funny how many people question what is wrong or they’re like, “Why am I not selling something? I have so much traffic. I have so many people getting to my site.”

And then we take a look at it. And it’s almost impossible to convert. So anybody can use CRO you just have to logically look at your website and see how simple it actually is to convert. And that’s really what it boils down to–is how simple is it? And how easily can I get somebody to that end-point?

32:37 PAT: Well, yeah. And you gotta ask yourself too. If I’m someone who has no familiarity with this website at all. Honestly, if you’re a business owner, or you have a website that you wanna be doing more revenue, grab some rando off the street and have them try to check-out on your website. And you will see better than almost any data can provide what the problem is.

32:55 AUSTIN: That’s a great point.

32:56 PAT: You know what I mean? Like, have them go on your website. “Oh God, there’s 15 CTAs all asking me for different things on this page. I don’t know what to do. I don’t want to be made to feel stupid so I’m going to leave this website.” That’s the sentiment.

33:11 JOHN: Right. That also discounts what the actual value is of your business. Because then there’s so many different options for somebody to choose from, you’re not putting the importance on what you’re actually offering.

33:23 PAT: The niche is the important thing. That’s your USP. You can’t be a jack of all trades and a master of none. And you need to convey that in every avenue. Even if you do offer all of those things, a user needs to come to your site and think, “This is exactly the one thing that I was looking for. This is a perfect fit.”

And so that comes down to a lot of things. If we’re doing our job correctly, we are mapping that traffic correctly to the right pages, so that if somebody’s looking for something it shows up right in front of them.

And then on the convertibility side, the offer that’s on the page that we’re sending them too needs to reflect that and pretty much only that.

33:57 JOHN: Should we rattle off some of our favorite testing ideas?

34:01 PAT: Let’s rattle them.

34:03 JOHN: To kind of round this out. So we’ll just go through a couple here that I think are really, really effective or I’ve seen be really effective.

Content. You can… there is no limit to how much you can test your content. So if you have a paragraph on your site, write that paragraph 4 to 5 different times. And test all of it. And I guarantee you, you’re going to come up with something where you’re going to have one that stands out amongst the rest.

So that’s a favorite one for sure. Especially since we work with the content team here. That one works I would say 99% of the time.

34:40 PAT: And the thing… Sorry, really quickly on that. We’re not just talking about informational content. This is your pitch. This is like if you imagine yourself in the sales process, this is your sales copy. This is your script. This is how they understand why you are the best possible option for them.

34:55 AUSTIN: And the aesthetics of it too. So is it bulleted? Is it an entire paragraph? Is it a list? These are three different ways with the same copy to display it to your potential customers. So think about that as variations as well.

35:07 JOHN: Right. Another good one has to do with let’s say your business deals with lead generation. So if you have forms on your website where that’s the conversion. You’re not an e-commerce website I guess, is the best way to put it.

35:23 PAT: Right so I come to a site where I’m going to talk to an advisor about something. I fill out my contact information. That’s what we’re talking about.

35:30 JOHN: Exactly. So if you own a website like that, and forms are your conversion point, one of the best things to do is test using less form fields. And that’s even one that I would say, maybe don’t even test. Just do it.

The least amount of form fields is always going to result in the highest amount of conversions. Which sounds very simple, but essentially the less you make people do, the more you’re going to get out of it.

35:58 PAT: (laughing) Yeah, the less you need to do, the more people are gonna actually do what you need them to.

36:00 AUSTIN: It’s the era of convenience.

36:02 JOHN: Especially with submitting information. If you can get by with just somebody’s email and that’s good enough for you as a lead, do that.

36:08 PAT: Instead of phone number. And we see this all the time. Never, ever… if you can avoid it, man, never ask for a phone number. I’m not giving a phone number to anybody. And even if I do, if I don’t recognize the number I won’t answer anyway.

36:22 AUSTIN: Especially if your demo is 20 to 30, 35, they don’t want to be called. We like text messages and emails and over the internet.

36:31 PAT: Get in touch with me on the Interwebs.

36:32 AUSTIN: If you think we’re going to give a phone number and potentially get a phone call, you’re completely wrong.

36:35 PAT: You’re dreaming.

36:36 AUSTIN: Don’t call me.

36:39 JOHN: Then another good one has to do with images that you use on your site. And the cool thing to do with that is use the opposite image of whatever the current image is. So if I have a background image of a man, then I’m going to test it with a background image of a woman.

That seems to work a lot too in terms of finding the right result. It may not turn out that the one that you’re testing is the one that’s going to work, but it still gives you valuable data. So any type of creative or any imagery on your site always try to test that as well.

37:16 AUSTIN: If you have an image of an animal, what would be the opposite of that animal?

37:19 PAT: A human.

37:21 AUSTIN: Oh, okay. Yeah, I guess that’s true.

37:23 JOHN: Maybe my example wasn’t the best example.

37:24 PAT: Have a background image of a big, big man like me. The opposite would be Austin Mahaffy. Small, small man.

37:33 AUSTIN: No, I’m super-tall too. Just as tall as John.

37:35 JOHN: Okay. Let’s move on to the next one.

A cool one that I’ve seen recently has to do with the navigation is putting notifications on your navigation. So this one’s really, really specific. But we’ve done it for a couple clients here, where if you add something new to your site. Think about like when you go to Facebook and you look up in that right-hand corner and you have a little red circle with the amount of notifications that you have.

37:58 PAT: Directly where my eye goes.

38:00 JOHN: Right. Exactly. So putting little notifications on your navigation when something’s updated. Or just putting on there for your conversion point. And it’s crazy how much people… the amount of click-through rate basically increases with just that.

38:16 PAT: Well it’s the FOMO thing. It’s like, “What am I missing out on?”

38:19 JOHN: Right. “Oh, shiny object. I’m going to click on that.”

38:22 PAT: Exactly. That’s my attention.

38:23 JOHN: But yeah. I think that one is my favorite right now. And all the ones that we went through I think are the most effective. And you could implement it literally on any site.

38:30 PAT: Yeah, and sometimes you can just do it. If you want to go through a site and you’re like, “I’m having confusion here.” You don’t need to test. You could be like, “This is going to make it less confusing. I know that. I’m going to put the CTA where people can see it.

38:42 AUSTIN: All right, John. Let’s get one more from you. Maybe something about mobile if you have one?

38:48 JOHN: Yeah, mobile the biggest one there is attention span. And kind of taking that into account of a user. So the big one that we do with mobile is rearranging the section order of a page.

So if I have a section at the bottom of my page with a form on it. And it’s at the very bottom on mobile, I’m going to test moving that section somewhere up to the middle or to the top of the page. Just to see if people on mobile are digesting the entire page or not, because when you break down a page on mobile, there’s a lot of unnecessary information.

So that’s a big one that we run on mobile as well as the navigation on mobile. And testing… a good example of a test for navigation on mobile is “do I need all of the links in my desktop menu? Or can I just get by with a few of the links that I have?”

And if the overall conversion rate on mobile increases after you do something like that, you know that you don’t necessarily need to include everything on desktop.

So that’s what we look for on mobile, is more of what’s necessary. What’s being seen?

As far as like, aesthetics, we don’t normally test too much in terms of changing a design on mobile. But I mainly look at forms and how those are being interacted with.

40:11 AUSTIN: The display of products and how they flow on the page from top to bottom is so important. What I see from a metrics perspective is the majority of people who are buying stuff are searching on mobile. And they’re trying to get an idea of what product they want before purchasing at home on their desktop. So keep that in mind. It’s super-important to give them the product they want at the top of the page, cause also, they’re not scrolling through the whole page. They’re quickly trying to find the product they want and then when they get home, they’re going to buy it. So make sure that you find out which product needs to be at the top of the page.

40:43 JOHN: Yeah, and if there’s one, last takeaway that I would have on CRO, it’s just one word. Capitalize. Don’t try and stretch your website out too thin, where you’re trying to get everybody to see every single product. If you have a product that’s working and people are buying it, put it at the top of the page.

Just continue to get that product as popular as possible.

41:03 PAT: Yeah. It’s like a philosophy too with self-improvement. Would you rather spend time getting better at things that you are not good at, just to do average? Or to capitalize on something you’re already very good at? Time and time again, it’s been proven that trying to capitalize on something that is already working provides the most beneficial for you.

41:21 JOHN: Right. And what people don’t think about is, “Oh, I have this one product that’s really popular, but I need to get more sales on this other product.”

If you get more sales on that first product, and you just continue to make that as popular as possible, chances are you’re probably going to get more sales on your other products too.

41:36 PAT: 100%. And if you’re marketing to them correctly–and that’s why that cross-channel integration is important–once you have the purchaser, you should be hitting them with emails on cross-sells and upsells after they’ve purchased.

41:50 AUSTIN: Especially if it’s the highest margin product as well too. Don’t reinvent your entire company bas3d on because you want to create revenue from additional streams. Profitability is number 1 and e-commerce is so important to keep that in mind as well.

42:02 PAT: Cause it has the potential to be so profitable.

42:03 AUSTIN: That’s right. Websites generate money.

All right. This was a super-awesome conversation. Thanks everybody, John. All that insight. All that great knowledge you have.

If you have any additional questions for us, please reach out. We have a lot of data on this. We write blog posts. We have webinars. We talk to clients about it every single day, and have so much data. So if you’re ever interested, please hit us up.

42:25 PAT: All right, you guys. That just about wraps everything up for us here at Flip the Switch. Thank you again for tuning in for episode 45. Before you go, join our forum group. We have a private forum on Facebook. It’s called Flip the Switch podcast forum. We are waiting by our computers so we can add you to it. So we can share some of the great content, data, studies that we’re referring to in the episode today.

So definitely do that. In the meantime, if you have any questions. If you have anything that you’d like us to cover on the show, you can submit those through there as well.

But in the meantime, we’ll speak to you next week. This has been Pat Kriedler, Austin Mahaffy, John Saunders and Joe Hollerup signing off.

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