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.