Business white paper. The road to strategic website design The Optimost Web Optimization Maturity Model

Transcription

1 Business white paper The road to strategic website design The Optimost Web Optimization Maturity Model

2 Digital marketers spend large sums attracting website traffic. Much of that investment is wasted. Traffic continues to convert at woefully low rates. Visitors repeatedly fail to engage. Effective marketing in the digital age is no longer based on gut feel, accumulated experience, or the highest paid person s opinion; it s based on customer data. It requires companies to put optimization and testing at the center of web design and development processes. Many organizations have already taken the first steps to truly understanding what works best for their customers. They have realized the value of listening to customer data, leveraging inhouse or basic self-service testing tools to identify the website design changes most likely to improve lift, revenue, or engagement. Yet unfulfilled promises of much higher, sustained return on investment from basic optimization have led these organizations to conclude that on its own this is not enough. They need a comprehensive optimization program that not only identifies the most valuable changes, but also delivers the necessary know-how, secures the essential budget, and provides the leverage to enable them to act effectively. The Optimization Maturity Model We believe that in the next few years, every single website change will be driven by customer behavior through a conversion rate optimization program. Every release will be tested against a hypothesis, all content will be personalized to the visitor, and optimization teams will be profit centers in their organizations. Assess your Web Optimization Maturity with our interactive tool at optimost.com As they work towards reaching this goal, organizations are asking how mature they are compared to the highest performing peers of their industry. They need to know if they are doing the right things, if they are doing them right, and the route they need to take to climb up the ladder. With no clear answers to those questions, we developed our Optimization Maturity Model. Whether you have no optimization experience, do a small amount of optimization in-house using your own technology, or are currently leveraging a self-service software package for conversion optimization, the maturity model is designed to help you quickly benchmark your organization against your industry peers. By understanding where your organization stands you can prioritize the issues you need to address. Our Optimization Maturity Model contains four dimensions that together describe how organizations mature. Based on the longest experience in the conversion optimization industry, they indicate the areas an organization should focus on to help it succeed in generating a higher return on their website investments: Type of testing Content tested Segmentation Organization. Understanding testing types Effective optimization starts with effective testing. The number and types of test an organization runs gives an indication of an organization s optimization effectiveness. As an organization matures it increases not only the velocity of its testing, but also the quality and complexity. A/B testing is less advanced than multivariate testing (MVT). MVT can pack multiple different variations into a single test, such as whether button A in combination with banner C or button B in combination with banner A gives a better lift. You are going to find out far more than by running the button and banner tests individually. The more permutations you can test, the more likely you are to find the perfect combination. 2

3 So if one customer is running ten A/B tests and one MVT and another is running one A/B test and seven MVTs, even though the first has a higher volume of tests, the second is probably doing more advanced optimization. This clear sign of maturity requires not only a greater volume of traffic to distinguish across the different variations, but also sophisticated optimization tools able to generate the data required and expert analysts to interpret it. Types of content tested reflects maturity At their basic level tests simply compare text or image variations. Should a button say Buy or Buy now? Does a banner work best in green or blue? Do customers respond better to this copy or that? Immature organizations focus most of their testing on simple comparisons such as these. The investment required is minimal. The insight is valuable but there is a lot more to learn. As an organization matures it focuses more of its optimization effort on interpreting customer data that provides a deeper understanding of visitor behavior and desires. It is able to make more strategic design decisions decisions around page layout, page flow, dynamic content, and the critical pages that are direct drivers for revenue. Curiosity or a usability study, for example, might drive organizations to invest in tests that are more complicated to set up, such as tests that examine page layouts. Does the navigation bar work best on the left or at the top of the page? Should we size page elements so you don t need to scroll? But that insight isn t always enough. For example, a company considering eliminating unpopular products from its pages to avoid distracting potential buyers needs to figure out the impact of doing that on order sizes, propensity to buy, and ultimately revenue. For this it needs to track and test metrics across multiple pages. This complex task is extremely valuable when you get it right. More generally, testing across multiple pages provides valuable insight into how a visitor arrived at a page, where they are going and the impact of that. Testing the flow of an entire checkout funnel, for example, illuminates the various paths people take and where they re most likely to become distracted and leave the checkout funnel. It can help answer business questions such as How could we recapture lost sales? Testing dynamic content is about testing pages where the content isn t fixed. Product recommendations, for example, might reflect what the visitor has just clicked on or put in their cart. Backend systems decipher what best to show them. If Peter likes Manchester United and Jane likes Detroit Tigers, you want to promote football merchandise to Peter and baseball merchandise to Jane. Testing that can be complicated, requiring testers to consider every possible template, every possible use case, and every possible scenario. Getting it right requires sophisticated tools and expert analysis. On a static page, you would simply tag the page to pull up the relevant items. On a dynamic page, however, getting the right recommendations displayed next to the right product and knowing that the test is running correctly is much more challenging, because you can t see it directly. You have to ensure Manchester United shorts are promoted when Peter looks at a Manchester United shirt. You have to ensure a Detroit Tigers cap is promoted when Jane looks at Detroit Tigers sunglasses. Finally, testing pages directly associated with revenue poses the highest risk, but offers the highest reward. Raising conversion rates on the last page of a checkout funnel, for example, by 50 percent will increase revenue by 50 percent because 50 percent more people are completing their purchase. It is a very valuable page to improve. If you get it wrong, however, you could equally lose 50 percent of your revenue. More mature optimization organizations are better equipped to test pages such as this. 3

4 Segmentation enables a more personal experience Less mature organizations don t personalize the visitor experience. They serve the same generic content to all of their visitors and, likewise, don t distinguish between visitors when they are testing. As they mature they first identify the visitor segments that are of interest to them. They may decide to target content differently based on context (referrer, keyword, device type), location, demographics (income, age), customer data (loyalty status), or behavior (new or repeat visitor, category affinity) for example. With segments defined, they test behaviors segment by segment. The most mature organizations are exploring behavioral targeting, which uses complex machine learning algorithms to discover the most profitable segments in the data without defining them first. A segmentation strategy such as this demands tools able to provide more granular testing. The more mature the organization, the more granular the testing and ultimate personalization, and the more complex the content segmented from basic to dynamic content. Organizational approaches that elevate maturity Effective marketing in the digital age requires organizations to make decisions based on customer data, rather than internal politics. To understand maturity from an organizational standpoint, we first examine how much optimization is valued. Has it won the organizational support that allows decisions to be made purely on test results? The percentage of releases tested also gives an indication of how much an organization values testing. As an organization matures ad-hoc testing reflecting the whims of the business is superseded by a closely followed testing roadmap. All website changes are verified before time and money is invested. After all, running a test is vastly more cost effective than spending $500,000 implementing a change that hurts conversions and has to be rolled back. Mature organizations also recognize the importance of testing everything at every level. After core teams have tested changes on primary websites, those changes should be verified on marginal sites so these can be optimized for site-specific tastes or behavior. Well enough placed to minimize politics We ve already discussed how mature organizations follow an optimization roadmap, but for optimization to be effective that roadmap must be derived from an organization s strategic goals. If, for example, search drives the largest revenue volumes, testing how search results work should be higher up the agenda than testing the navigation bar. In less mature organizations, optimization is often buried deep in IT or marketing where it is at the mercy of agendas higher up in the organization. Web design and testing decisions will be made on the highest paid person s opinion rather than the data. If somebody high up in the organization wants a blue button, they get it. If they want something tested, it s tested. Any plans are quickly thrown out of the window. In mature organizations, where optimization sits close to the CMO, politics have been minimized and decisions, even prioritization decisions, are based on data. Optimization is an important strategic tool that influences business decision-making. Going where the data leads you means sometimes taking paths that lack political support. A tight link to senior management ensures the viability of optimization successes; their buy-in helps clear roadblocks when politics get in the way of doing the right thing for the business. 4

5 Attributing the value of optimization to move towards a profit center Optimization is one of the most powerful levers for increasing profit or revenue. It should not be subject to the short term whims of middle management; its budget should be based on how much value it delivers. The ultimate goal here is for optimization to be a profit center where it is measured, like any business unit, on how much revenue and profit it delivers. But while less mature organizations struggle to keep track of test results, even more mature organizations find it difficult to attribute hard numbers to the tests they run. Two examples: Understanding the value of each click is difficult if the purchase is completed offline. A customer might get a car insurance quote on the website, but then contact a call center to complete the purchase. It is hard to know definitively that 17 percent of the people that clicked converted and that revenue added up to $5 million. The link between how many people clicked and the ultimate revenue is tenuous. The week after implementing a very positive test result, a competitor announces a promotion, impacting your conversion rate. If everything else stayed the same, revenue gains might have added up to millions. But nothing ever stays the same for long, so it is hard to pin down the true value of that test over a longer period. The ideal of optimization as a profit center is always going to difficult, but not impossible, to attain. Leveraging insight to develop best practices A high maturity organization is on a journey of continuous learning and improvement. It has a history of running many tests, captures what has been tested, what has worked, and what hasn t. Different business units share it to develop best practices. Those best practices become hypothesis for future tests and further improvement, creating momentum for the optimization program. Naturally, since every situation is different and what works in one situation may not work in another, organizations need to keep testing their hypotheses. Best practices can also be used as tools for internal publicity, for getting buy-in from senior management and moving towards a profit center. A mature organization with many success stories to tell is better placed to make that argument. Efficient use of data See our Enhancing the value of optimization investments whitepaper for more on the value of connecting optimization and web analytics data It is one thing to collect data; it is another to analyze and take effective action. A growing number of digital marketers are feeding their optimization data into third-party web analytics platforms to derive further insight from their optimization data. The combined data is extremely powerful; it can help them paint a picture of a visitor s complete journey and show how different test iterations are performing against the custom analytics reports that marketers read day in and day out. Having this information will ensure marketers can effectively make key business decisions on how to move forward with the learnings. Moving quickly from insight to action Marketing teams within less mature organizations often have to wait weeks or even months for IT to implement the changes they require based on what they have learned from the data. They have neither the authority nor the knowledge to log into the website editor and implement the changes themselves. If changes are related to a specific campaign, they may not be able to respond during the time the campaign is running. Bigger changes may not be implemented until long into the future, with the organization giving up a small fortune each month while it waits. Very mature organizations have empowered their optimization team; those in IT responsible for implementing the changes report to directly to them. IT follows optimization s lead rather than optimization having to join in IT s queue. Optimization can be more successful, rapidly delivering value to the organization in line with its strategic goals. 5

6 Benchmark against peers This chart, based on a representative sample of our customers, shows that we work with enterprises at all levels of maturity to improve their optimization program, and also demonstrates that more organized teams out execute their peers. Organization Score Execution Score See how you compare with our free interactive Maturity Model at optimost.com You can find our free interactive Optimization Maturity Model at optimost.com. Use our tool to assess your own organization s web optimization maturity, or get in touch and we can guide you through the process. The tool will show you where you fall on the chart above and provide much more detail to help you make the internal case for optimization. We ve also included a short interactive web marketing quiz on the site to help you convince any skeptics in your organization of the value of reaching optimization maturity. Once you ve identified your organization s current level of maturity, we can work with you to recommend the next steps that will help you progress up the maturity curve. Zoltan Liu Head of Customer Strategy and Solutions New York office Robert Brennan Managed Services Manager New York office Uri Kogan Worldwide Head of Marketing Silicon Valley office Copyright 2015 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein. April 2015