Digital Marketing Blog
March 6, 2013
A/B-testing is something that is quite frequently discussed as something you should do. Yet, most marketing managers and online communicators still don’t. In fact. They dread the mere notion of having to test and change their digital campaigns.
I will get to the solution and how to easily do an A/B-test. But in order to fully understand the notion that there is a problem to be solved here. I first need to explain the essence of the challenge of starting using A/B-testing as a methodology for constant improvements.
The challenge is threefold.
First off there is a problem with the relationship between marketing and IT. Marketing wants things to move along fast, whilst IT wants things to be done the right way. This has been a problem ever since IT became a part of the communication process.
There is a vast difference between building solid systems and supporting quick communication. This has bearing on the split testing as any such functionality has to be planned when building the architecture of the system according to IT, whilst Marketing gets frustrated by slow development causing revenue, participation and results to diminish.
This problem can now be solved.
The second problem is that the wish to test something has been seen as weakness. “What, you don’t believe in your idea enough… why test it if you believe in it..“.
This is something that has come out of traditional marketing structures where your idea went of to print or went out on air. There was no way that you could split test your campaigns during a campaign. The mere fabric of digital gives you an opportunity to change and fine tune your campaign, website and online presence so that it improves over time.
I like to view the A/B-split testing as a Formula 1 race, where I am the engineer standing in the pit stop ready to adjust any small detail to make perfection out of good. No one can say that any Formula 1 car (read creative) is slow (bad). But the conditions might be such for the day, that things need to be adjusted for it to work at full capacity. (Love that metaphor… WhOOt… you don’t like it.. well.. then.. then… pfff…)
Companies love to discuss 360 approaches to advertising. And yes. Different medias can support each other. But without using them properly, if applying the same methodology to digital as you do print, you are doomed to end up with less than the maximum effect of the campaign. With A/B-testing you can increase conversion rates, e-mail opening rates, click through rates etc, constantly giving you more for every dollar you spend.
And as I promised above. The challenge of time to market – from idea to implementation is solved. It doesn’t exist anymore.
Thus. This second problem can be overcome.
The third problem is that most marketing managers – clients – do not consider growth when considering the creative of an advertising campaign. They do not see it as a part of building a brand over time, but they rather see it as an instance to push a new product or meet a seasonal increase/decrease in demand. Advertising campaigns can have great success whilst the product they are meant to support doesn’t grow its default revenue streams. Meaning, in order to maintain your sales volumes at the hight of the top of the campaign, you have to campaign all the time which, in many cases, is a very expensive affair.
This is a much more difficult thing to overcome as it has to do with behavior and moreover habits. It is not a problem of lack of knowledge. It is quite easy to rack up the numbers. But still this seems to be a very difficult task for some (would really like to write most) marketing managers to wrap their arms around. Creativity is a lot more fun to purchase than growth, as you actually have to think and not only feel. However, as I will come to, A/B-testing is ALL about feeling, however, it doesn’t give you the power to choose as the data does that for you. Ie. you can still feel, but you need to be able to disregard taste.
To illustrate this I will show you the difference in growth and in simply having campaign success by studying two graphs of search queries made in Google. I use this measure as it is a great tool to estimate brand demand amongst consumers.
This is the search graph for Kodak – Successful campaigns, yet no gained growth. You can see that regardless of their marketing efforts. Their growth is negative.
This is the search graph for “Mitt Romney” and as you can see… no one cares about Mitt Romney if he doesn’t buy a shit load of media to get elected
Now. In comparison to growth which looks like this. First off is iPhone.
Secondly we’ll have a look at McDonalds.
There is a very strong difference in the way these brands have worked with campaigning. One uses the campaign to promote innovation in the product whilst the other use it as a way to promote more of the same.
By focusing on creating campaigns that allow for A/B-testing, we also allow users to respond to the way we market our products better. I believe that this is one great way to overcome the hurdle of taste, and “internal protectionists” that seem blinded by previous success. It is also a methodology to use data to implement a process of change and improvement in an organization without threatening anyones position. It is the data that says so. Not anyone smarter. Just the data.
Another way to overcome this challenge, is if we as analysts, developers and optimizers become as cool as the advertisers. That’s why I love the emergence of the infographic hype, growth hackers and the concept that everyone is a nerd. This actually helps us get through as they want to be like us, dress like us yet, they are too socially skilled to ever be like us.
So. Finally. What is A/B-split testing
Well, basically it is looking at some data and seeing that traffic doesn’t flow the way you want it to flow. It can be that they do not click on a website the way we want them too. It can be that they do not sign up to the newsletter, or simply that they do not fill in a specific form or find a specific document. As a result you get either lower conversion rates or more calls to your customer service.
STEP1 – The Hypothesis Gut
In order to improve this, you start out with listening to your own to gut.
First off. You try to do whatever it is that you want your users to do. Ie. Sign up, buy, click or find. Somewhere along the way you may realize that there might be a few other ways in which a user complete a task a lot faster. This gut feeling is what we optimizers like to call – Hypothesis. Not only does it sound a lot more valuable than “gut feeling”, but it also gives the client a honest hint that it is simply an educated guess.
The more experience the optimizer – or you – has, the better the hypothesis and probably the fewer tests needed.
STEP 2 – Setting up your test
Once you have your hypothesis in your head. You should start testing the changes. It might be a larger text, a variation in navigation or a change in a background color.
In essence a change to the copy, page or design in order to change the way the user uses it. Ok. So once you have that ready in your head, you should get to the nitty gritty of creating these variations.
Now. This has previously been extremely time consuming and problematic as you have had to create all these variations in code – meaning you have had to contact IT to do these variations for you.
This problem is now a segment of the past.
Several great tools such as Optimizely – which I can honestly say that I love (video embedded below this section) and Visual Website optimizer have given us simple drag and drop possibilities to make variations quick.
This means you do not have to implement 6 different versions of a design. No more waiting for coding. No more waiting for design templates. YOU can do this.
Step 3 – The implementation
You run the test. Get the numbers and see which one of your hypotheses actually created an improvement.
Now you have all the data. You can call IT and say with 100% accuracy (perhaps 95% or some confidence interval) that sales will increase with 40% by making these changes. It is thus a priority project. NO IT-person… no matter how big, rough skinned or flanell shirt pansared, can object to that. You won’t have to ask for resources as you can do the testing yourself. You are not there with a problem. You are there with a solution!
Regardless if you run A/B-testing on a website or if you do it on a campaign, or some e-mail copy or whatever you are testing, it is worth it. There are tools simple enough for you to be able to do this on your own. You can relax and go with your gut whilst the data takes care of the decision making.
You then send the solution rather than another problem to the IT department. You become the true hero of your organization as you just increased the bottom line result with 40%. Congratulations! You’re it!
May 8, 2012
Thinking in terms of goal completion is essential when working with all types of SEO, social media and more specifically, the conversion of traffic in any shape or form from these channels. In this blog post I will present a way of working, you can use when you optimize your conversion funnel for 1. primary goal completion (usually some kind of purchase, download, signup etc.) and 2. secondary goal completion (such as sharing, linking, commenting). It will be tilted towards the secondary purpose as this article really came about when talking about the updates in Google Penguin.
So what’s to consider in terms of SEO, conversion and sharing?
When selling a product online you need to think in terms of two significant frameworks. First you need to consider landing pages, and secondly you need to consider user paths/user journeys/conversion funnels (virtually the same thing as they all should lead to a completion of a transaction you have determined).
Landing pages need to be optimized for two things. They need to be optimized for visibility and they need to be optimized to build desire to complete your proposed action. Ie. your visibility creates traffic that is essential, your USP and way of meeting your visitor makes them want to buy from you. User paths need to be optimized for ease. Ie. you need to decrease the friction the user experiences when they are attempting to convert.
There are several thousands of articles written about landing page optimization. Most of them focus on how you can increase the lust or desire to complete some form of task. To convert. There are quite few however that consider full user paths. This blog post aims at discussing user paths with the goal of adding some sharing to the conversion funnel. I don’t know what it is formally called, but I choose to call it “in-line conversion rate optimization”.
Why is it important to optimize for sharing?
Recent events within SEO have made it ever so clear that you need a wide range of different types of links to your website. One of my tweeps wrote a blog post that inspired me to write this one. It is a short summary of how the Google Penguin update is effecting you and what you should think about when working with on page SEO.
In terms of conversion rate optimization and SEO, you prioritize getting traffic to those pages that convert well for you. The best way of doing so is to increase the ranking of that page for the desired search terms in the search engine result pages. When we have Penguin in fresh mind, we know that the old facts about links have been turned on their head. Links are still needed to beat the competition, however, it has become increasingly important that these are contextual, next to semantic, and more natural than before. The easiest way of creating such links is through user interaction – sharing.
Thus, users and not machines have to start building a big chunk of your link juice. Besides improving the actual content on your pages, you should also focus on when you ask the user to link to you or to share your content (which means that they put a link to your web content on another page – ie. link to you.) As I wrote on Tribaling, it really doesn’t matter how good your content is, as long as it uses mechanisms that make people share.
People share what they want to share and what they are convinced to share. As I discuss in my guest blog post on Tribaling, you really need to start understanding what and why people share in order to improve your content. Once you do understand these patterns, it will become a part of your natural content creation. Then you can focus on how to boost the results by using different tactics.
So what the heck is in-line sharing?
In meetings with clients that sell stuff through online channels, I often get into the discussion of “how to increase sharing without taking the eyes of the prize”. Ie. they do not want to ask too many things of their website visitor, as they want to optimize for the ultimate conversion goal. In terms of in-line we are going to add one or several calls to share throughout the conversion funnel or user path.
What makes this in-line is the way that we do it. We make the sharing a part of the product rather than make it another step. Think about it. If you are selling shoes, your buyers might need advice when choosing between two options. Add a create image – post to wall for advice call to action. If you are selling a subscription you can put a matching functionality on your thank you page saying – Increase your knowledge, compare your preferences with someone you trust – connect to facebook/G+ whatever.
If you have a service that require contacts – ask people to make their first additon or call or whatever by syncing with who else has the service. Even before someone has started the conversion funnel, ask them to check out who else of their friends are using the service – connect to facebook and match with your friends. If no one has done this before, then use the call to action – “Ask for matching access from MAX 5 of your friends” or something like that. They need to think that it is their fault that there aren’t any users who have used the service before… getting side tracked… however… one more thing…
Let me elaborate on the shoe example. Let’s say your visitor is selecting between buying two different types of shoes. When browsing your website they have added both of them their checkout basket. Once ready to select they click their basket icon and see all the stuff they have selected. They now feel really anxious that they are about to make a poor mistake. This is a perfect time for you to prompt them with a call to action – “Create a moodboard and ask your friends on Facebook” or G+ or Pinterest or whatever. You get the point. The user gets to post it to the wall with a pre written question they can change – “Please help me select what shoes to buy – tag yourself on the one you vouch for”. Doubble time sharing as this is posted to their walls as well. Sweet.
Getting back to it. If they select get their friends opinion – share – then great. You feed them with a message – “Great, we will send you an e-mail with feedback once your friends have replied”. Or, buy now and have the option to change your mind when your friends have had their say. Or, woops your friends couldn’t decide, buy both with free 1 day delivery and 10% off your second item. Or something like that.
You start getting it I guess. You make sharing a part of your conversion funnel, rather than making it something people do statically. You give them a reason to share whilst making their decision, or to be able to boast, or for whatever other reason you can find when analyzing your website personas. DON’T put a share button on the page unless the page itself is a shareable object. Rather make sharing a part of the purchasing process. Wow… that paragraph became a blog post in its own right. LOL… getting back to it….
How do you optimize for sharing in terms of in-line conversion?
I have written about Biconic conversion models before, but that blog post still didn’t take into account the challenge of time, which is one of the greatest friction moments of any type of user path. If it takes to much time, they have time to think, and thus they are less likely to convert as their level of arousal that was created by the landing page, decreases as time goes by.
You cannot simply add steps between the user and their completion of the goal. You need to optimize some away first. This is really the focus for in-line conversion optimization. If you add something you have to optimize something so that it runs more smoothly.
So. To get to it. What should you do? Well, I usually do the following, if I don’t have the luxury of fancy fancy analytics tools:
- I look at the average time a user spends from landing page to completing a preferred goal
- That average time I assume to be the time a person is willing to spend to purchase anything from me
- This average time thus works as a comparative, or an anchor for myself
- If I manage to decrease that time spent, then 1. either more people will convert or 2. I can increase the value of their purchase given that they can perform these tasks within the same time period
- I then use all my time optimizing to shorten the time spent by the user
What types of call to action should you use?
So. We have now defined that your main KPI is the average time spent and you should try to decrease this. The purpose of decreasing the time is so that you can start completing your secondary conversion goal – ie. increasing the value of the page in terms of visibility. In terms of Google Penguin update, this is done by getting contextual placements of links back to your web content (plus a variety of contextual stuff on your pages).
In order to make someone share your content on their way to conversion, you really need to have your sharing call to action make sense. I mean. You cannot just write “share this” somewhere on the page and expect users to do all the work. You have to stick it into their face and describe to them why “sharing is caring” or why “sharing is valuable to you”, as described above. Just as on the landing page, you need to build arousal or desire to actually perform this task.
And you DO need to do it in-line of the user path. This is an important statement. This basically means that you should use
Calculate the ROI of sharing
In the end it all comes down to ROI calculations. If you believe that an improved ranking will increase your traffic by let’s say 1000 visitors. You know you convert 15% of these. Then you know that you will earn your price times 15% times 1000 by increasing your pages ranking.
If for example you increase your conversion rate by lowering time spent to convert by more than that, you probably shouldn’t add any in-line linking mechanisms to improve your rankings. Especially not if your page is already ranking well.
However, if you find that an improved ranking would surpass the decrease in conversion rate due to the in-line linking mechanism. You should probably consider adding it. Or in other words. If you find that you have optimized your conversion rate to a place you feel comfortable, then you should try to increase traffic, if the trafic increase doesn’t mean you decrease your net revenue.
Or in bullets.
- Conversion rate is a function of time (and some other factors)
- Traffic is a function of links
- In order to make someone link to you, this will take time from them
- If you increase time, conversion rates will drop
- In order to find your optimum you need to consider both what a ranking increase would mean in terms of traffic and you need to consider how the extra time spent by a user when converting is effecting how many of them convert
- If the traffic increase produces more money than the decrease in conversion rate takes away – it is a rational and good thing to do
So many words for saying so little. But I truly hope that this has given you some insight into how I think in terms of sharing, SEO value and conversion. Ie. when not only taking any of the important steps out of the equation.
So in terms of Google Penguin, your rankings and thus also traffic for relevant keywords is increasingly needed to be natural and contextual. It needs to be the result of natural sharing. Thus you need to focus your work on creating content that is shareable, and create mechanisms that actually help people share. I suggest in this blogpost how you can do this by putting the call to action for sharing in-line with the user journey to the primary conversion goal.
I hope you enjoyed it!
August 16, 2011
If you ask John Ekman, it does in some cases. As he writes in his blogpost on The Unbounce Blog – Why über-Optimised SEO Titles Kill Click-Throughs & Conversion Rates, sometimes the effort to optimize for the search engine defuses the call-to-action copy needed to actually make the clicks count.
I do not only agree with him, but I would like to take his conclusion one step further and say that any SEO working with broad match keywords to drive traffic is an idiot. Well, perhaps not if they are getting paid to drive traffic, or to rank for a specific broad keyword, just to get the numbers for some half-thick marketing director out there, cause then they’re only doing their job. However, if SEO’s recommend this practice, then they are blunt idiots.
It is nice to get loads of bulk traffic as it is usually easily reported to the client. “Look, traffic is up – YEY – Now pay me!“. However, in the long run, it only hurts the business. If you deliver air and sell it as gold, then the client, or the client’s boss will eventually leave you. What’s worse is that they will probably leave SEO as a practice for marketing in itself. Their conclusion of such efforts will naturally be that “SEO-traffic doesn’t convert“, which is a load of shit.
Understanding the searcher
And it is in the context of this that John’s blog post becomes extremely interesting. No, he’s not calling anyone an idiot, I am. However, he clearly shows more understanding for SEO than many of the “ranking-focused” “professionals” out there. What John’s blog post is about – for me – is to confirm that the correct focus for any SEO should be conversion. Not traffic. And they should be measured on how much they convert, and moreover, get paid great bonuses – long term – for improvements made in the conversion rate of the SEO traffic.
Cause anyone with the right tools can rank a website. You need good, quality content, which can be bought. You need good, quality links, which can be bought. You need accessible technology, which can be bought. But what you cannot buy, is the understanding of your customers and what makes them tic. Sure, you can hire a conversion expert or perhaps a good SEO with a focus on conversion, however, they rarely have the segment insights and knowledge about the clients that you do.
They can at best watch the data and make suggestions on where/what you should rank. Which is actually not a bad practice. But you will have to accept that this takes time if you cannot provide them with this information yourself. And time cost money. If you have it, then good for you. Pay up!! However, if you do not have the money to hire the best in the business, then you’ll probably better off paying to increase sales on existing traffic than paying for more traffic.
80:1 relationship of today’s marketing
Which brings me onto the next topic John’s blog post reminded me of. Today, companies pay 80 dollars to get traffic to a website for every 1 dollar they pay to do something with it when the traffic actually gets there (Omniture numbers). Let’s say it one more time. Cause it is really sickening when you think of it. There is an 80:1 relationship in the spending between getting traffic to a website, and doing something with it once it gets there. Is it just me, or would possibly a better logic be to do the opposite? Perhaps not, but the ratio is simply not justifiable. If the ratio was 8:3, then it would possibly be acceptable, but not 80:1.
The problem with averages
I believe the biggest crook in this whole mess, and the reason of why we are where we are lies in averages. As humans we want comparatives, and since we most commonly like to compare ourselves with people/corporations that are like ourselves, we create industry averages. The problem is that we settle with these averages, and take them as a justified excuse/truth when our pure logic/rational/instinct should tell us otherwise.
For example, we accept a 50% bounce rate as an ok average, ie. we think of it as acceptable that 50% of the traffic coming to a website leaves it without visiting any other page on the website (GA definition). We accept that the average conversion rate (industry independent) is 3%, meaning only 3 out of every 100 visitors of our website buys something. We accept that the opening rate of our e-mails are roughly 20%, which means that 1 in every 5 who have opted in to our e-mail send outs care to open the e-mails we send. Really… why do we do this?
So why is John’s blog post important?
Well, it is evident that John possibly don’t spend hours in the SEO forums reading up on the latest of discussions. SEO’s out there will probably crack down on him for giving them a running nose bleed. However, I believe the topic of CTA’s in titles instead of broad match keywords is probably one that needs some further digging. The reason being, SEO’s out there still do a shit job.
The real problem with any marketing effort today is focus. If sales, downloads, sign-ups, shares or invites is the goal, then focus should be on increasing these metrics. Not on mere traffic. The problem is that nominal traffic numbers generally decrease as a result of such work and since marketing managers are measured on traffic, this creates a problem.
As usual, I don’t know if this makes any sense, but, I found it important to share. Please comment if you got some thoughts or criticism. Am I off beat?
And… ps. sorry John if I “mass-interpreted” you… 🙂
August 11, 2011
I have become more and more interested in the arts of conversion of traffic to some specific pre-determined goal the past year. Although I had worked with conversion previously I didn’t think of that is what I was doing. In the landscape of a social web, I believe we have to start to rethink some of the things we are currently optimizing in order to gain full effect.
A couple of months back I was discussing conversion with one of the best in the business – Stefan Helgesson. He was looking into the shapes of the conversion funnel and had registered the domain biconic.com. Our discussions confirmed the notion that conversion is no longer a cone-shaped funnel, but a biconic looking shape.
The conclusion was reached when realizing that if you only focus on the first half of the biconic shape – the traditional cone-shaped conversion funnel, you are missing out on the potential of utilizing existing customers to generate upsales, new clients and “tupperware pyramid” potential.
Think of it this way. The social web has enabled individuals to become agents of any message they want to share with others. If they purchase a product from you, they are likely to desire that product. Otherwise they wouldn’t have bought it. Now, in the classical web technologies, this was all dandy and you smiled, said thank you, and asked them to please come back another time. On the socially enabled web, you are not doing your job if you settle with this. You should take it one step further.
Given the dopamine injected into your customers brain when they have just pressed the purchase button, you should utilize this to give them a referral offer of some kind. The referral can be built up as a promotion “Tell your friends, get $5 of your next purchase” or as a social interaction “Compare your purchase with 5 friends and see who made the best deal“. Both ways work miracles for your net revenue. Not only short term, but also long term.
The reason I would argue long term effects is because of the Consumer Loyalty Index research that’s available out there. Given that you enable people to rate your products or services after using them, you can steadily project your future business growth. The question you should ask is “how likely is it that you would recommend our product/service to someone else“.
However, back to the biconic shapes. When you give your clients/customers the opportunity to share their purchase, and thus attract more business, their purchase is in itself a viral action that creates a biconic shaped effect. My assumption (and studies) show that you only need a conversion rate of 1% to have a never ending series of shares to purchase. If you think you can obtain a higher conversion rate than that, you’ll get the biconic shaped conversion funnel.
Example: Let’s say you let 100 of your customers share their purchase to Facebook. Of them about 10% do share. Ie. 10 people. On average people have 100 friends of Facebook. That means the purchase will be posted to at least 1000 peoples walls. Let’s say one in every 10 people who see the link clicks on it. Ie. 100 clicks, of which 1 decides to buy something. This in effect means that the total value of your 100 customers purchases is no longer 100 units, but 101 units. Thus, the post purchase value of your initial conversion is higher than if you would not use the social referral system/apply the biconic conversion funnel to your analysis.
In the past we have called this organic traffic, but I believe that there should be a difference drawn between organic traffic that comes through eg. search engines and traffic that comes through recommendation. Simply because the latter implies your business is growing because of product satisfaction rather than SEO performance. The above example is assuming that you have a normal click to share ratio and a conversion rate of 1%. In fact, the click to share ratio is somewhat smaller in reality, whilst the conversion rate on referrals is a lot higher, thus this is a careful calculation and not any kind of wishful thinking. I am just too tired to do the math for the real deal.
So is biconic conversion the new black
I would say it is. it gives us an excellent analysis model for creating more business out of existing business and it gives us the tools to convey why social web applications are important to increase wealth and value. When everyone is discussing whether or not to be on Facebook, you should start rethinking what really makes us the dough in the end, namely what makes people buy and how to increase the basket value of their purchases.
Think of it as turning your fully legit business onto the dope of a modified tupperware pyramid. Ie, give people something for sharing that still gives you a revenue margin on the biconic value of the referral. Wow, I can feel I am messy, but I think you get the point. So here are some of the things I think we should start to rethink in order to start thinking fully biconic.
#1. Landing page vs. Through page
Just like a punch you have got to think of your landing pages as “through pages”. This is not the final destination, but they should appeal to sharing. Ie. the user is not done when they hit the buy button and they need to realize this as soon as they arrive. You can attain this by adding ratings and reviews, by adding comments on products, or by adding “loyalty stories” to the mix.
Your through page is the vault through which the user gets acquainted to all of the goodness others think of your products. You are not a retailer, but you are a community of satisfied customers. A customer doesn’t make a purchase at your store, they evolve their user experience and improve their life by sharing the stories about their usage of the products you just happen to sell.
#2. Sales conversion vs. Product adoption
Which brings me onto the next topic. You shouldn’t try to explain your products through offers alone. You should explain to people what king of life they will live after purchasing your products, what kind of person they will turn into. They do this by understanding the “why” behind what you do. Which makes me think of this video.
#3. Customer Relations Management vs. Customer’s Relationship Management
You shouldn’t just build a relationship with the client, but you should let them build relationships through the purchase of your products. They are happy they got to buy something. It is proven, we do get happy when we buy. But you should give them the tools to join and build their network through you, and through purchasing through you. Let them become experts and help others improve their usage, give them social status and let them promote the living crap out of your products and services. They will, because they are happy, when they buy.
Allow people to build relationships through your relationship with them. Be a bystander. Don’t intervene. Just let it happen.
I don’t know. I just had to get this out of my system. Please comment below.
June 23, 2011
Sometimes things don’t go as planned. Especially when time is limited. Today, we noticed on Twitter that we were spamming people. At first we thought it was another attack, but then we realized that it was actually us doing it.
I had given a poor instruction to one of our summer workers and now I have to pay the prize for it. Naturally, it is not his fault, but it is entirely mine. I am sorry for all of you who have received a spam comment (about 50 people) from me today.
A standard text was written that would be used as a base when contacting bloggers. This was interpreted as being the EXACT text that should be distributed. I was sloppy in my instructions and so things went terribly wrong.
This is nothing we should be doing and it will not be repeated. So bring the heat and direct it towards me, cause I am the one who deserves the beating!
May 18, 2011
I have been looking through the web these past few weeks to try and find good resources on how rate and review services effect conversion rates. I mean, hard cold facts, percentages and cases. I have found a whole bunch of statistics on how rate and review services influence conversion rates and I would like to share them in a blog post.
Except for this post I really recommend “The psychology of economic decisions”-series published by Oxford university press. They are my bibles when I need to find good and solid research on why people buy the way they do. You can find one of them under the Behavioral Economics tab of my book store.
#1. Main findings
In general, users love ratings and reviews. It varies in different industries and in implementation what effect they have on conversion rates in general. Positive reviews always increase conversion rates, whilst negative reviews can have both positive and negative effects. The number of reviews have inverse relationship on “return orders”, ie. the stuff people send back.
#2. Statistics on how people are influenced by ratings & reviews
When working with clients, you need to have solid evidence that is easy to interpret. Statistics are usually the best way to convey a message to a skeptic recipient. Here are some effective stats to help you along the way.
- 70% of the online users trust consumer opinions posted online (Nielsen Report)
- 80% of user reviews are positive (Bazaarvoice, Forrester)
- 24% use online reviews when deciding on purchases made offline (comScore, The Kelsey Group)
- 97% of customers find online reviews to be accurate upon evaluation (comScore)
- 79% of UK retailers see a positive effect on conversion rates as a result of adding ratings and reviews (eMarketer)
#3. Cases on how ratings & reviews influence conversion rates
There is one presentation I love more than all others on Ratings & Reviews effect on conversion rates. It is a report by Dr Paul Marsden at Syzygy Group called Social Commerce: The Case for User Reviews.
#4. Research on how reviews affect sales
I’ve tried to find as much free data as possible, most of the articles listed below can be found online, but I really recommend that you purchase at least some of them if you like them. That way, these tremendous authors can continue writing their fantastic stuff for us to enjoy.
- Do online reviews affect online sales?
- Impact of Online Consumer Reviews on Sales: The Moderating Role of Product and Consumer Characteristics (free)
#5. Positive effect from negative reviews – Research on conversion effects
Another discussion that seem to surface every now and then is whether negative reviews effect conversion rates and sales positively or negatively. Here we have a couple of research papers that tell you what’s up.