Here’s how to go about designing a home page that converts.

This is the process I’m using when evaluating or designing home pages.

1. Map out buyer personas
2. Craft a value proposition
3. Build a connection
4. Use proper visuals
5. Define most wanted action
6. Create call to action
7. Write user oriented copy
8. Add trust elements
9. Test length
10. Check load speed

I’ll touch upon all of these points below.

Let’s start with the obvious stuff

Logo

People expect to see your logo in the top left corner. Clicking on the logo takes you to the home page from every internal page. Don’t mess with it.

You don’t need to hire an expensive logo designer. Text logos are just as good, only with 1% of the cost.

You can create a beautiful logo by using text. Pick a beautiful font and a background color you like – and voilà! A designer from Edicy took just 15 minutes to create this logo for an imaginary company:

Image credit: Tajo Oja

Navigation

People are used to 2 kinds of menus: horizontal and vertical. Don’t innovate here – familiar layouts work best.

Remember people spend most of their time on OTHER websites. People don’t need to see a menu to know where the ‘contact’ link is at – by default they look for it as the last link in a horizontal menu or the bottom link in a vertical one. Ensure they find it there.

Keep it simple and obvious:

The Personal MBA menu:

All is clear, right? No surprises here.

Now let’s look at a menu gone wrong. Clever innovation? Not! They make you move your mouse onto a number to reveal what link it is. Not many will have the patience:

Footer

People expect to find your contact information in the footer. Make sure it’s there.

Mapping buyer personas

What are buyer personas?

Buyer personas are essentially a specific group of potential customers, an archetypal person whom you want your marketing to reach.

Optimizing your site for buyer personas gets you away from an egotistical point of view and gets you to talk to users about their needs and wants. What people care about are themselves and answers to their problems, which is why buyer personas are so critical for marketing success.

Why use them?

Essentially it’s about knowing who you are selling to, what is their situation, what are they thinking, their needs and hesitations. If you’d know the exact person you’re selling to and the problems they have, you’d be in a much better position to sell them. RightNow Technologies increased their conversions 4x by building a persona focused site.

How to build them?

The truth is that most companies have only the faintest idea what lies behind the buying decision. We presume an awful lot. The buyer persona is a tool that can help you see deeper  into the buyer’s thinking.

Use interviews with existing customers to map out different personas. To get more information on this read The Buyer Persona Manifesto (free pdf). Here’s a free webinar recording on buyer personas I recommend checking out.

When personas fail you

Ideally the value proposition and everything else you present on your home page (and other pages) come from the buyer personas. That being said, some products are better defined by the job they do than the customers they serve.

Here’s Clay Christensen explaining job based marketing:

Value proposition

This is the most important part of your home page. Your value proposition is a concise chunk of text (headline, sub-headline and and maybe a few bullets points) that should address these questions:

• What is this site about?
• What can I do here?
• How is it useful to me?
• Why should I buy from you instead of the competition?

People’s attention span and patience are extremely limited. The world suffers from attention-deficit disorder. If they don’t get the answers from your home page within seconds, they will leave. Nobody will TRY to understand what you’re about nor read long pages of text. If you haven’t captivated them on your home page, you’ve lost them.

There are several ways to craft and present your value proposition.

Campaign Monitor:


What I like about this value proposition

• Bold headline – stating what it is and who is it for
• A specific, benefit-oriented paragraph underneath describing the service
• Big visual to support the text

What I’d improve

• Clarify how is it different from the competition

300 milligrams:

What I like about this value proposition

• Big, clear headline you cannot miss
• A specific, benefit-oriented paragraph underneath describing the service
• Visual to support the text

What I’d improve

• Increase the font size of the descriptive text and remove the company name from it (needless waste of space). I’d make the first sentence user focused like the second one.
• Make the visual more clear, add descriptive arrows and texts perhaps

Dowce.com changed the wording of their headline and added bullet points to improve their value proposition, resulting in 24. 5% improvement in conversions.

Build a connection

Let’s do an exercise. I won’t ask you to write anything down, but make a mental note.

How tall are you? How much do you weigh? Where do you normally walk (city streets, gravel etc)?

Now let’s say I’m selling shoes and you need a pair. You have 2 options. The first pair is designed for everyone. The second one is designed exactly for people your height and weight, and for walking on terrains you normally walk on. The price is the same. Which pair will you buy? No doubt about it, right?

This is why you have to state who your product or service is for, and it has to be true. If you’re trying to sell to everybody, you will lose (unless you have a gazillion dollars to spend). Talking to everybody in your copy works for almost nobody.

Look again at the above example of Campaign Monitor. They have included the target group in their value proposition.

Stripe:

There’s no doubt who this service is designed for, is there?

If your current offering is NOT catered to a specific customer group, I recommend you re-think your strategy.

Most wanted action

Remember paradox of choice: the more choice you give somebody, the easier it is to choose nothing. Choice paralyzes. If you think people will invest time to figure out where to click next, think again.

Thinking is hard, and you should not make your customers think. Instead, clearly indicate the next action you want them to take. In one experiment they changed the home page to focus on a single action, and saw the users doing exactly what they wanted them to do. It works.

Before you can do that, you need to figure out what that action should be!

If you ask for the purchase or sign-up too soon, you will lose them. In most cases it’s a good idea to direct them to reading more about your service or checking out a demo before asking for a commitment (signup, purchase etc).

Making the button bigger is not gonna help – in most cases they just don’t care yet! It’s about focusing on what people really want, in the order that they want it. You don’t ask somebody to marry you on your first date.

Look at the screenshots above, all of them make this mistake (Campaign Monitor does offer View Features button too). People are not ready to commit after just reading a few sentences, so don’t force them. You can of course have a buy/sign-up button, but try making it less prominent and put the focus on a different step.

Try to think of the questions that are going through your customer’s mind while they’re on your homepage and whether the content on the page does a great job of answering them. Guide them to the next logical step in their usage lifecycle.

Joshua Porter makes a good case for burying your signup or buy button, I recommend reading it. One company removed the sign up call to action from the top of the homepage, and sign-ups increased 350%.

Trying the product without signing up

I love how Codacademy is doing this:

They pull you right in and make you use their service without asking for a signup or anything. The friction is usually high for any kind of signup – free or not – and here they have completely eliminated that.

While they do have a “Get Started” button, it only sets focus to the console:

So how do they get people to sign up? After playing around a bit, they offer you to create an account so you could save your work. By this time you’ve toyed around with it and fallen in love.

Call to action

Call to action wording matters a lot. I yet have to see a case study where a wording containing the word ‘buy’ converted the best. In e-commerce, add to cart always kicks buy now‘s butt.

In this split test they changed “Buy SMS Credits” to “View SMS prices”, and saw an uplift in conversions. This change along with minor added trust elements resulted in overall conversion rate improvement of 37.6%.

In another test they achieved a 83.4% improvement after changing the wording of their button from “Play right now!” to “Instant demo!”. Test your call to action.

I recommend making the calls to action benefit-oriented and indicating what happens when they click. Avoid empty words like ‘submit’.

Scrapblog:

Icondock:

Web Copy

Copywriting is super important and a huge topic on it’s own. Here’s one tip.

Most people on your website know what they are looking for in a product or service. If they find something that looks similar to what they want, they will follow it (read more, buy etc).

Consequently, having relevant information with the exact wording your customers would use is very important. Talk to your customers and see what language and exact phrases they’re using when talking about your products. Use it on your website.

When I’m looking for a project management software that has features like task assigning, time tracking and client management built in, those are they keywords I’m after when browsing different sites.

More on copywriting: what the science of persuasion says and 7 tips for effective sales copy.

Above the fold and below the fold

Above the fold is the part of a page that’s visible without scrolling. People do scroll and are not afraid of it, but make sure the most important elements are visible without scrolling:

• Value proposition,
• Some visual,
• Call to action.

Ideally the part above the fold answers the most important questions the visitor has, and the rest is supplemental reading.

How long the part below the fold should be largely depends on your business. Guys over at Pipedrive told me that when they shrunk their home page, their conversions tripled.

Make the contact information visible

Easy to find contact information is one of the key things to making your website more trustworthy. Display your email, phone and live chat options on every page.

LessAccounting saw a 1.8% increase in conversions after placing a phone number on their site. Flowr added a phone number to their site – and also observed a slight increase in conversions.

Leave room for text

Ignoring search engines is not wise. As I mentioned it the beginning, your home page has the best chance among all the pages on your site to rank high in search engines.

This, however, won’t happen unless there is substantial amount of text on the page (500+ words). Use the room below the fold also for SEO – write useful stuff about your products, services and address questions your users have, but make sure the text it optimized.

No text, no ranking.

Visuals

Thousand words and all that. Neuroscience tells us that people “get” images hundreds of times faster than from text (our reptile brain doesn’t even know how to read).

I firmly believe that using images is a powerful way to boost up any value proposition. Imagine this website without the large image:

Blu Homes sells prefab homes, and nobody is going to buy one without seeing it. How many words would you need to describe the picture above? Too many – nobody would read that.

Even if you sell less tangible goods like software, people want to get an idea what it’s like.

Project Bubble gives you an overview of their software via short video. I think video is great for more complex products, because watching a 1:30 minute video is less hassle for the user than reading a whole bunch of text.

Using video can provide an uplift. Dropbox boosted their conversions after adding a video to the home page. Not all the videos are same - video thumbnails can make a huge difference. Yobongo got a 70.9% conversion uplift after changing their video thumbnail.

Read more on how to increase conversions with video and how to boost conversions with images.

Trust and security

People don’t buy from you if they don’t trust you. In addition to showing off your contact information, it’s a good idea to use trust marks to reduce friction.

Here’s what Ice.com put in their footer:

Notice the mention of money-back guarantee, “trusted since 1999″ and 2 trust logos.

Don’t ignore load speed

Speed matters. Slow sites cause frustration and make people leave, thus obviously hurting conversions. Speeding up sites increases conversions.  Google knows it and has included site speed as one of the ranking factors.

Google’s own nifty Page Speed Online tool is terrific for providing you insights into your site speed and what you can do to make it faster. If you use Google Analytics, their Site Speed report will help you learn which of your pages are underperforming, so you can address this potential barrier to your conversions.

If you’re not terrified by technical discussions, read how to optimize your site with HTTP caching.

It’s never done

Your home page should be living and breathing organism, always evolving. Keep on testing different hypotheses and see what makes the difference. In the end, testing is not just about converting more customers, but learning. Make it your goal to understand why a change made a difference and what can you learn from this that you can apply elsewhere in your business.

Too many businesses don’t give it enough attention, and just throw something together (then complain that online lead generation doesn’t work). This post is about building email and sign-up forms that convert. 

1. Less is more (Few fields = more conversions)

Every field you ask them to fill increases friction. The best thing you can do to improve conversions is to get rid of as many fields as possible. In most cases you don’t need to ask for anything but the email address.

In one study an 11-field version of a contact form was replaced with a 4-field version, resulting in a 160% increase in the number of forms submitted and a 120% increase in conversion while the quality of submissions stayed the same.

In another test 5-field form outperformed 9-field form by 34%. Again, they didn’t complain about the data quality as people lie in long forms anyway.

What’s the first thing that comes to your mind after seeing this type of form:

If you’re like me, you physically feel the brain damage happening. Suffix? Really!?

It seems to be a lead generation form for a web design company. What they should ask instead is name, email / phone and maybe the website URL. Now the salesperson at the company can get in touch with the prospect and figure out all the other questions over the phone or followup emails. The goal is to get the lead!

Start with getting rid of all the optional fields

An eye tracking study showed that people might not look at the “required fields” note on forms, and therefore think that they’d have to fill every single field.

Think about it this way: every additional fields makes you lose a number of prospects. Is the additional information you gain from the field WORTH losing those people? Do you lose anything if you don’t get all the data right away?

The numbers of fields you can have in a form is also dependent upon the perceived reputation of the company. Well-known and trusted brands can get away with more, but even they can’t go overboard. I’ve heard the New York Times subscription form used to be 18 pages long(!) when they first launch their online presence. Times have changed (pun not intended).

Do you really need it?

Do you really need people’s phone, fax or address? If you aren’t gonna ship them anything, people won’t be interested in sharing it. Only ask what’s relevant. Expedia removed the “Company” field from their booking form and saw an increase of $12 million a year in profit.

What will you do with their name? If it’s to mention their name in mass e-mail (“Hello [name]“!), the forget about it. True personalization happens through personalized content. Everybody knows that the name field is filled in by an email software robot, nobody thinks it’s a personal email to them. It used to work really well a few years ago, but now the effectiveness is in fast decline.

The best signup form is short

Barack Obama:

Milk:

2. Sell the email signup

Getting people to give you their email (sign up to your list) is a transaction. You want them to give you their email address (and maybe other data), they want something in return. Generally speaking you should ask for as little as possible on the signup form, and give the user as much as possible in return.

People who are motivated are extremely likely to fill out a form that is reasonable in length. Instead of asking can people fill out our sign-up form, ask if people are motivated enough to care? Creating the motivation is up to you, learn to create great microcopy.

There’s also a service you can integrate to your sign-up forms to provide rewards for signing up (e.g. “Fill Out This Signup Form For A Free $5 Gift Card”). They claim this increases sign-up conversions, but I haven’t tested them myself.

In short, don’t just ask for the sign-up, sell it.

The worst kind of form for enticing newsletter sign-ups.

• No reason given to join
• Ridiculous amount of fields

I bet they get no sign ups whatsoever.

Also bad:

While it’s short, it doesn’t provide any reasons for signing up.

The good kind

• Short
• There’s a clear value proposition
• Privacy policy mentioned

The One Question:

This one converts at 35% which is pretty high. The reason it works so well is that most traffic to the page comes via Google search, and the search terms match the offer of the form. When your offer matches user motivation, you get high conversions.

NB! Test your lead magnet

It is very important to test your lead magnet (what you offer in return for their email). The offer itself usually makes the biggest difference in your conversion rate. Everything else is just supporting it.

3. Show social proof

Nobody wants to be the only idiot filling your stupid sign-up form. Show them tons of people have done it.

Basecamp:

Finerminds:

Mixergy adds testimonials and mentions companies people know:

Social proof is very effective.

4. Tell them what happens next

People like to be in control. Submitting the form without knowing what exactly is going to happen creates uncertainty. Uncertainty causes friction.

The worst thing your submit button can say is ‘submit’. The best way is to make the submit button say what’s going to happen.

Pipedrive:

Tumblr:

Utopic:

5. Form design matters

People trust beautiful design more than the alternative.

This guy doubled his opt-ins with better graphics, showing the virtual cover of his e-book. I realize it’s still a poor design, but progress is visible:

Appsumo grew fast to 500 000 email subscribers:

6. Single column, please

This eye tracking study showed that single column forms work better. Traindom‘s sign-up form:

7. Try a Mad Libs style form

Mad Libs is a phrasal template word game where one player prompts another for a list of words to substitute for blanks in a story, usually with funny results.

Vast.com did A/B testing comparing a traditional Web form layout with a narrative “Mad Libs” format. The Mad Libs style forms increased conversion across the board by 25-40%. Before and after views:

Image source

8. Communicate errors clearly

If they fail to fill in a mandatory field or do something wrong, be very clear about it.

Meetup does this well. In this case I didn’t enter the zip code:

If they did fill the form incorrectly and you need to show an error message, make sure the fields are populated with the data they entered. If they have to start from scratch, it causes frustration and they might not do it.

9. Don’t be picky

When asking for information. There is nothing more annoying than a form that requires information to be entered in a very specific format.

For example, if you’re asking for a date, accept the year as in 11 and 2011 both. Let them use either slash (/) or dot (.) in between the numbers. When you ask for a phone number, don’t require spaces, brackets or anything else – let the user enter their phone number as they please.

If you need the data in a specific format, make it clear, or better yet have it converted by a script. You can also design the interface in a way they don’t have a choice. In the case of dates for example, you can have them choose it from a calendar.

10. Don’t ask for the password twice

The more fields you ask people to fill in, the less will. Having two fields for passwords is stupid.

Most people do it as “everybody is doing it”, but for no good reason. The idea is that entering it twice makes sure that there’s no typo in it. Well, a better way to do that is to give the option to see what they typed.

Vimeo doesn’t do it:

Traindom has a “check your password” checkbox you can tick to show the password instead of *********. A much better way to verify whether there are any typos:

11. Drop-down lists, radio buttons and auto-complete fields

You’ve probably seen those huge drop down lists for selecting categories, countries or citis. If there are tons choices, drop-down list is not convenient. This is bad:

Instead, use auto-fill fields such as this one (give it a try, it works):

Here’s a great article on redesigning the country selector.  Get the country selector script from here.

Use smart defaults where appropriate. For example, if most of your users come from the UK, it might be a good idea to default the country to ‘UK’.

If there’s anywhere between 7 and 15 options, a drop-down list is usually a really good fit. If there are only a few choices (2 – 6), go for the radio button:

12. Submit button width = field width

Call to action is the most important part of your form. A small button has weak affordance and can make users feel uncertain about using it. Make it as wide as the input fields (and join our email list while you’re at it):

13. Avoid clear fields button

Nobody who fills in your form wants to clear the fields. If they don’t want to fill it in, they can just leave.

If they fill the form and accidentally clear the fields, there’s a good chance they won’t start over.

14. Don’t use captchas on forms

Captchas are those anti-spam things:

One study done over 6 months found that when forms use captchas, the company could lose out on 3.2% of all their conversions. Another study found that up to 30% of the captchas could be failed/incorrectly answered by people as they’re too hard to figure out.

Animoto used to have captchas on their sign-up form, then removed it, and thereby boosted their conversion rate from 48% to 64%. That’s an uplift of 33.3%!

So instead, what do you do?

If it’s an email list signup form, just use double opt-in.

If it’s a quote request or another type of form, you can use the “Honeypot” captcha technique. It involves using CSS to hide a form field that is supposed to be left blank. Every time the form is submitted you check the field and see if it’s blank, if not, mark it as spam but not delete it.

If you’re still keen on using captchas, this is the best captcha in the world.

Treepodia says video is one of the few strategies that seems to work well regardless of the category in which it is deployed. The following chart shows the conversion rate increases that were witnessed for shoppers who watched product videos:

Even if there wouldn’t be any proof, I would believe instinctively that video increases conversions. Using just the right images boosts your conversion rate, but a video is so much better than a photo. It’s the closest you can get to seeing the product in person.

If the product is complicated, using video to explain how it works causes less friction than reading a bunch of text. You can present a ton of information with just a 30 second video – equivalent of half a page of text, if not more.

Videos don’t need to be directly about increasing conversions. HSN features a lot of educational videos on their site. Emery Skolfield, HSN.com director of digital content:

Videos can be educational and build trust in our brand. If they do they add value and give the sense that HSN.com can help a consumer even after she’s made her purchase.

Educational videos have another advantage – people actually want to watch them. More content = more engagement. When I look at YouTube Insights data for my own videos, I can see a clear trend: content videos are watched WAY longer than commercials / product pitches. Most don’t watch the latter past the few first seconds.

Put a video on your home page

Dropbox put a video on their home page and conversions went up. Vidyard increased conversions by 100% by using video on their home page.

What should the video be about? Perhaps a short overview works best. Last year Think Vitamin replaced an example tutorial video (5:50) on the homepage with a 50-second overview of the service - and increased conversions by 24.4%.

InDinero spent two months split testing between a more traditional landing page design and a page with basically just a big video and a simple signup form. The page with just a large video has increased inDinero’s signups by almost double from 6.8% to a whopping 11.2%.

Buy Real Twitter Followers produced a case study after experimenting with a small video explaining their service on the homepage. This little change helped them increase their sales by 216% against control, but the new version of their home page is again without video. Go figure.

No best practice is guaranteed to work on your site. Always split test.

Use videos on your product pages

Video on product pages is getting more popular. According to the etailing group’s “13th Annual Mystery Shopping Study,” usage of online video on product pages among the 100 leading retailers studied increased by 18 percentage points between Q4 2009 and Q4 2010.

Voted the best jewelry e-commerce site of 2011, Ice.com has product videos for every product. Zappos is killing it with video.

Putting videos on product pages is just a smart business decision. When a consumer sees how a product works, she is much more likely to convert. Sometimes already offering the option to play video will increase the conversion rate (even if they don’t actually watch it!).

In the fourth quarter the conversion rate for consumers who watched a video on eParty Unlimited - online-only party supplies retailer - was 8.3%, 43.1% higher than the 5.8% conversion rate for other consumers.

Living Direct added video to its product pages of household items ranging from tankless water heaters and wine refrigerators to solar-powered cell phone chargers, and has seen conversions increase for those products. The same has been confirmed by Stacks and Stacks and Swimwear Boutique.

Premiere Game Tables saw a significant jump in conversion rates: it went from 1.2% to 4% when a product video was watched.

E-retailers can use vendors like Treepedia or Inovo to produce product videos, and pay $300 to $500 per video + monthly bandwidth. This is out of reach for small businesses, but given the access to digital video cameras these days any etailer can make their own videos and host them free on video sharing sites.

Online gemstone jewelry company Wild Gems produces their own videos and hosts them on YouTube for free (has access to video analytics via YouTube Insights). It’s hard to show off the sparkle of gemstones via photos, so for them video actually helps them to present their products better. See this moonstone ring:

Male or female narrator?

This is something you have to test for your site, but online eyewear retailer EyeBuyDirect.com discovered that consumers prefer a male voice for the video’s narration.

The retailer tested the effect of a change in narrator for two product videos running approximately 30 seconds each that feature the type of chunky black frames.

In this case, the male-narrated product video produced more sales. That video achieved a 9.28% conversion rate, compared with a 2.78% conversion rate for the female-narrated video. Quite a huge difference!

Video thumbnail matters

We doubled the number of video plays on Traindom’s home page just by changing the video thumbnail.

The thumbnail used to look like this, and around 10% of the visitors watched it.

The new thumbnail contained the text ‘Watch this video because it’s only 2:18 long’. I thought to mention the duration of the video, so people wouldn’t worry about it taking too long. The word ‘because’ was used as it triggers an automatic compliance response (as per Cialdini). The new thumbnail looked like this:

Twice the amount of people watched the video now. Test your video thumbnails.

Video can reduce return rates

After adding product videos to their ecommerce site, Diamond Jewelry Limited realised a 60% reduction in returns, which significantly increased their revenues and margins.

Video can show product more accurately and hence people are less likely to buy stuff under false assumptions.

Try a video-only landing page

Fitness trainer Carl Juneau managed to increase his conversions by 46% by switching to video-only landing page. He tried a long-form sales letter underneath the video, but conversions were much lower.

Why did video-only work so well? Carl’s best guess:

I’m guessing visitors were intrigued by the sales video and clicked through to the price/guarantee page to get more info. They may have been turned off by the long salesletter when I added it to the video and lost the excitement created by the short, punchy video.

He also tested a landing page without a video, but a with a call to action mentioning video:

This produced a 14.18% improvement over control. He’s not the only one boosting conversions with mentioning video in the call to action.

Mention video in your call to action

A split test on this landing page was trying 2 different call to action buttons. One said “Free Instant Access” and one said “Watch The Video”. See images below:

Version A: Get Instant Access (11.9% conversion rate)

Version B: Watch the Video (15.3% conversion rate)

‘Watch the video‘ button increased conversions from 11.9% to 15.3%. A total increase of 28%!

Image source

Use video testimonials

Testimonials reduce friction like nothing else. People trust other consumers and social proof is powerful. When the testimonials are believable, that is.

Few will believe testimonials when just the first name or initials are mentioned. Full name and photograph is the minimum, but even that can be faked (I’ve seen an abundance of stock photos served as actual people). What’s really hard to fake is video. Therefore video testimonials are powerful.

Justin Nassiri from VideoGenie says video testimonials get watched for 100 seconds on average. That’s pretty good.

See how video testimonials are used by Intuit, Priceline and Shoedazzle.

How to get more views for the video?

Research conducted by Invodo says that videos get more views when

• they are placed above the fold,
• the video player is fairly large (480x720px sized player got more views than 250x140px),
• there is a text call to action (e.g. “click to play”).

Treepodia says you should embed the video rather than just provide a link to it. If you add a simple link to video from any given product page, you can expect something between a 5%-15% video view rate, while a video player embedded on the same page will deliver a view rate ranging from 10%-35%.

Most viewers will NOT watch the video to the end. An average 2 minute video gets watched half way. What does that mean for you?

• Make your videos nice and short – 30 seconds if you can, but definitely shoot for under 2 minutes.
• Present the most important information first, leave additional details for later.

Here’s a useful infographic on increasing your video viewership.

Measure video

I don’t mean split testing (but you definitely have to test video vs no video), but video analytics. How long are they playing the videos for? Are they watching them to the end or just the first seconds?

Most video platforms provide analytics these days, even YouTube. YouTube Insights shows you the general statistics, attention span (how long are they watching for), location and even demographics of the viewers.

I recommend you also do a split test of 2 videos and measure the video analytics – which video actually gets watched and which video helps to produce more leads or sales.

Any good case studies that you know of? I’m also curious if anyone has published data on how video decreases conversions. I couldn’t find any myself. 

I am very picky. Before deciding to read a book, I do a ton of research, review reading and other due diligence. I don’t read cheesy business motivational books. My last years favorite was Rework (if you haven’t read it yet, do it).

Out of all the business books I’ve read in 2011, these are the best ones:

The best business book of 2011

The Lean Startup by Eric Ries

It’s not just for startups, but for pretty much all companies and entrepreneurs trying to start or grow their businesses.

It’s rare to come by books these days that really make you go “wow”, that make you stop and think – especially if you’ve been around some.

Highly intelligent book and totally changes the way businesses are built. A must-read. A game changer.

The best quick read of 2011

We Are All Weird by Seth Godin

Seth is becoming a cliche, but I truly enjoyed this book. It’s thought-provoking, interesting and lays out a future that I believe in.

We really are weird, and getting weirder, and we should celebrate it and use it.

This is a quick read, and the book gets extra brownie points for that. Some books just go on and on to fill the pages, this one doesn’t.

The best social media book of 2011

The Thank You Economy by Gary Vaynerchuk

There were a ton published, and I enjoyed this one the most.

Granted, I like Gary V and some of you might not, but I like the notion of becoming more personal, developing an old school small town we-know-all-the-customers-by-name mindset.

Thanking people is a serious business.

The best service business book of 2011

The Consulting Bible by Alan Weiss

Among many business ventures that I run, I have a web marketing company. We build websites that convert and are 100% geared at achieving the business goals of the clients. There aren’t many good books written for these type of consultancy / service type of businesses, but this one is excellent.

From mindset to client expectation setting to value based pricing, this book has it all. While it’s written mostly for solo consultants, I gained several great new ideas from it and changed my mind about quite a few things. It’s rare that a book does that.

Other amazing books I read this year (that were published before 2011)

My second best read of the year was this:

Priceless: The Myth of Fair Value by William Poundstone

Pricing has always intrigued me and this book was both fascinating and highly useful. It inspired me to do further research and write a blog post on pricing.

Everybody struggles with getting the pricing right. Read this book for great insights.

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder

More tool than a book, this was amazing. Most business books you read only once, but this one you go back to and really use as a reference to enhance and develop your business model. Totally changed how I look at businesses. A fantastic workbook for teams.

Which books that came out in 2011 impressed you the most? What are the must-reads?

Disclaimer: Amazon affiliate links.

I know of a guy selling construction hardware online. He added images to all the screws he’s selling, and the sales of screws went up.

Schwan’s (home delivered food service) has one of the highest conversion rates among e-commerce sites, and when you go to their site you can sense that it’s based on their juicy images.

High quality images

This should go without saying, but too many websites try to sell products with low quality images.

Made.com is a site that caught my attention recently with their beautiful images that let their products shine. Screenshot:

Another great one is Best Made Company. Screenshot:

Always do what they do: pick a default image that is shown in full size and display clickable thumbnails (that produce enlarged images).

Alternate & detailed views

Don’t just show a single image, show as many as you can – from different angles.

Let’s take that same axe above. You can see all of these views on its product page:

Much better than just a single photo of an axe, isn’t it? You get a feel of it. They’ve also managed to take those photos in a way that show character and carry a brand. Well done indeed.

Context

Context matters. Don’t just show the product, show it in context. Let me imagine using it.

Remember the photo of the couch above? They also show a person using it:

Sell earrings? Show me what it looks when I’ll be wearing it. This is how Wild Gems does it:

“It’s so easy to use, even the kids can do it.” Even better to communicate that via contextual image:

Zoom

Zooming in / using a digital loupe can be a nifty feature if your product has ornate details your customers might want to look at. Like in the case of this $1400 leather case for your iPad:

No PC-handshakes, please.

Avoid cheesy stock photos

Usability tests by Jakob Nielsen show that people always pay a lot of attention to images. When it comes to people, real people get a lot of attention while stock photo people are largely ignored. Don’t use cheesy stock photos.

I won’t go on a rant, but if you’re using shiny people and suits shaking hands, you’re stupid and you think your customers are too.

Most phones have decent cameras today, most any random picture will be better.

Draw attention to products

Images can be used to draw attention to your product or copy, as this well-known eyetracking study says:

Here’s another post with great examples that prove the same.

Men are pervs, women are gold diggers

Miratech conducted an eye tracking study to measure how men and women look at the photo of a sexy young woman.

Image source

Conclusion: the men look at the woman’s chest and the women look at her ring.

Also, people in different countries act differently. For instance French women stared at the chest more than 2.7 times more than British women! Men who looked at the breasts the longest were also from France (and Denmark). Some cliches seem to hold water.

Try 360° rotating images

DueMaternity.com, an online retailer of items for pregnant women and new mothers, boosted their conversion rate by 27% thanks to 360° rotating images. In the past they used conventional two-dimensional images on their website, such as the front and back of a model wearing a maternity dress.

After adding 360-degree spin to the images that rotate automatically when shoppers visit a particular merchandising page, the conversion rate on products sold on those pages is about 27% higher than for standard two-dimensional images.

Golfsmith.com claims that products with the special spin feature have conversion rates at least 10% and sometimes as much as 30% to 40% higher than products without it.

360 degree rotating images are usually created by taking a series of pictures (“frames”) with a product, or any object, on a computer controlled turntable. Here’s a more technical blog post of how one guy did it, but there are also service providers around (such as this or this).

Product images in site search window boosts conversions

After online retailer BrickHouse Security added an automated drop-down menu of textual results that appear when shoppers enter terms into its site search window, it boosted conversion rates.

“With the product images in the site search drop-down window, we get a 100% lift in conversion rate among shoppers who use site search”

About 8% of buyers use search on their site , and about 25% of that group click among the new image-based search results in the automated drop-down list instead of completing the entry of a search term and clicking the search button. This results in a 15% lift in the overall site search conversion rate.

Human photos on a landing page increase sales and conversions

Medalia Art sells Brazilian and Caribbean art online and using photos of artists on their homepage increased conversions by 95%. They had these painints of artists:

When they replaced the painting with actual photos almost doubled the conversion rate (conversion in this case was clickthrough, not sales):Image source

This article tells a story of how adding photos of real people to their customer service phone number increased visitor-to-call rates by 21%:

37Signals started to use photos of their customers on their landing pages, and conversions went up:

Image source

Will any photo of people boost conversions? GetElastic mentions a split test where using a photo decreased conversions, but the they used cheesy-to-the-maximum stock photo, so that explains it.

I recommend always starting out with a photo of real people and never using cheesy shiny stock people. In case you have to use models (e.g. to show off merchandise), Flint McGlaughlin from MarketingExperiments said this:

A strong face as the primary means of greeting visitors gets a strong reaction that polarizes conversion rates. Never put up a face photo that hasn’t been thoroughly tested. It needs to be the right face.

This was the image in question (screenshot of narscosmetics.com):

Want more CTR on your Facebook ads? Beer helps

One Facebook advertiser, who was not in the business of selling beer, observed that an ad containing a picture of beer delivered its best CTR. In fact, it performed 57% better than any other ad tried:

Another company tried to replicate that and found the similar success with CTRs, but alas the traffic did not convert. In fact, only one of those 1,250 clicks actually produced a conversion. Ouch.

Their business is selling merchant accounts, so it’s extremely specific customer they’re after. My guess is that a consumer good with broader appeal might be able to convert that beer traffic.

Images on blog posts

I couldn’t find any conversion research on this, but I am sure of it: using quality images in your blog posts makes you sell more of your stuff. Why?

Images improve readability and general user experience (breaks patterns, catches attention, eye candy, worth 1000 words etc). Posts without images are boring, and lead to less reading.

The more people read your stuff, the more they like you, the more they develop a relationship with you, the more they trust you and that all moves them further along in your sales funnel (doesn’t even matter what the funnel is like).

My advice: always use images in your blog posts.

I’m not going to cover reciprocity, scarcity or social proof and all those widely known persuasion principles. You already know all about those (in case you don’t, stop everything and read this book by Cialdini).

1. Be confident, talk fast

The best way to persuade audiences that are not inclined to agree with you, is to talk fast. Fast pace is distracting and people find it difficult to pick out the argument’s flaws. When talking to an audience who is likely to agree (preaching to the choir), slow down and give the audience time to agree some more.

Want to boost persuasive power? Talk with confidence.

Don Moore from Carnegie Mellon’s Center for Behavioral Decision Research has published research showing that confidence even trumps past accuracy in earning the trust of others.

We prefer advice from a confident source, even to the point that we are willing to forgive a poor track record. Moore argues that in competitive situations, this can drive those offering advice to increasingly exaggerate how sure they are.

People naturally associate confidence with expertise. Know your product, know the facts about its benefits and believe in what it does – true confidence becomes from knowing and believing what you’re saying. It’s essential that we communicate our confidence to others in order to persuade them.

2. Swearing can help influence an audience

Light swearing, that is. (Go overboard and lose all credibility.)

Researchers divided 88 participants into three groups to watch one of three slightly different speeches. The only difference between the speeches was that one contained a mild curse word at the start:

“…lowering of tuition is not only a great idea, but damn it, also the most reasonable one for all parties involved.”

The second speech contained the ‘damn it’ at the end and the third had neither. When participants’ attitudes were measured, they were most influenced by the speeches with the mild obscenity included, either at the beginning or the end.

The word ‘damn’ increased the audience’s perception of the speaker’s intensity, which increased persuasion. The audience’s perceived credibility of the speaker did not change.

So that’s the secret of Gary Vaynerchuk and Dave McClure. I thought they’re just cool guys, but turns out its the swearing that got me.

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3. Get people to agree with you first

If you want people to buy into your message, start with something they can agree with.

In a research study by Jing Xu and Robert Wyerestablished, there were lingering effects of messages people agree with. In one of the tests, participants listen to a speech by John McCain or one by Barack Obama and then watch a TV ad for Toyota.

Republicans tended to be more swayed by the ad after watching the speech by John McCain, while Democrats showed the opposite effect, finding the ad more persuasive after the Obama speech.

So when you try to sell something, make statements or represent a world view your customers can agree with first – even if they have nothing to do with what you’re selling.

4. Balanced arguments are more persuasive

If what you are doing inspires (or can inspire) criticism, resist the instinct to paper over weaknesses. We fear undermining our point of view by talking about weaknesses, but actually it would help our case.
Psyblog writes:

Over the years psychologists have compared one-sided and two-sided arguments to see which are the most persuasive in different contexts. Daniel O’Keefe at the University of Illinois collected together the results of 107 different studies on sidedness and persuasion conducted over 50 years which, between them, recruited 20,111 participants (O’Keefe, 1999, Communication Yearbook, 22, pp. 209-249).

The results of this meta-analysis provide persuasive reading. What he found across different types of persuasive messages and with varied audiences, was that two-sided arguments are more persuasive than their one-sided equivalents.

People are not idiots and they can think. If you don’t mention the other side of the coin in your arguments, people are less likely to believe you.

Perhaps it might be a good idea to mention the shortcomings of your product or service on your website.

5. People believe you more if they sit in the evidence

A research study by Ye Li, Eric Johnson, and Lisa Zaval looked into the belief into global warming and its relation to the current local weather.

Participants in the US and Australia rated the strength of their belief in global warming. They also rated whether they thought the temperature that day was warmer, colder, or about normal for that time of year. When people felt the day was warmer than usual, they also expressed a higher belief in global warming than when they felt the day was cooler than usual.

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In the related study they asked the same stuff, but also asked for a donation to a non-profit combating climate change. The participants in this study donated over four times as much money when the day was much warmer than usual than when the day was much cooler than usual.

If you want people to buy your message, ask for the sale in the situation that supports your claims. Online, use imagery or other visual material to build the stage for your story.

6. Upsell a product that cost 60% less

Once somebody gets to a point that they’ll buy something from you, they have given you their trust and have convinced themselves it’s okay to give you money. In that moment you are able to sell them more.

When somebody buys a shirt, you upsell should be a tie and not the whole suit.

The time-tested 60×60 rule says that your customers will buy an upsell 60 percent of the time for up to 60% of the original purchase price. Any upsell you offer must be congruent with the original purchase.

If you don’t use up-selling in your business yet, it’s a quick way to boost profits (“would you like fries with that?”).

7. Frame it in the positive

Emphasising the positive can be more persuasive than pointing out the negative.

An analysis added up the results of 29 different studies, which had been carried out on 6,378 people in total. The finding was that there was a slight persuasive advantage for messages that were framed positively.

This study had to do with the way people relate to disease prevention, such as encouraging people to use sunscreen, and promoting healthy eating habits, but it might have a wider appeal. The researchers hypothesized the reason to be that we don’t like to be bullied into changing our behaviour.

Try framing your marketing message in the positive (“Gain additional hour every day” vs “Stop wasting time”) and see if it makes a difference.

8. The paradox of choice

The more choice you offer, the less people will take you up on it – says this study.

Researchers set up a jam-tasting stall in a posh supermarket in California. Sometimes they offered six varieties of jam, at other times 24. Jam tasters were then offered a voucher to buy jam at a discount.

While more choice attracted more customers to look, very few of them actually bought jam. The display that offered less choice made many more sales — in fact, only 3 per cent of jam tasters at the 24-flavour stand used their discount voucher, versus 30 per cent at the six-flavour stand.

If you have a ton of products, invest in building better filters that help people make the choice. Read the excellent book or watch the great TED talk on the topic.

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9. If something happens often enough, you will eventually be persuaded

Repetition of things has a distinct effect on us. Advertisements repeated replay themselves when we see the product. The songs that radios play over and over again eventually grow on us.

Repetition of a word or visual pattern not only causes it to be remembered (which is persuasive in itself), it also leads people to accept what is being repeated as being true.

ChangingMinds writes this about Hugh Rank’s persuasion research (Teaching about public persuasion, 1976):

Our brains are excellent pattern-matchers and reward us for using this very helpful skill. Repetition creates a pattern, which consequently and naturally grabs our attention.

Repetition creates familiarity, but does familiarity breed contempt? Although it can happen, the reality is that familiarity leads to liking in far more case than it does to contempt. When we are in a supermarket, we are far more likely to buy familiar brands, even if we have never tried the product before. 

Think about the last time you bought a pair of shoes. Did you pick them then put them down several times before trying them on. Did you come back to try them again? If so, you are in good company. Many people have to repeat things several times before they get convinced. Three times is a common number.

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Use repetition of key benefits or value proposition in your sales copy and ad campaigns many times. Effective advertising and political campaigns do that (“Geico can save you 15% or more …”). Use friendly repetition to create familiarity and hence liking.

Another research reveals even if only one member of a group repeats their opinion, it is more likely to be seen by others as representative of the whole group.

10. Men are more responsive to email than face-to-face talk

Guadagno & Cialdini research (2002) showed that men seem more responsive to email because it bypasses their competitive tendencies. Women, however, may respond better in face-to-face encounters because they are more ‘relationship-minded’

This research is suggesting that email could provide a way of side-stepping men’s competitive tendencies. But, this only applies to distant relationships. The closer the relationship between men, the better face to face works.

When you want to persuade a man you don’t know too well, start with an email.

11. Limiting the quantity you can buy makes you buy more

From Brian Wansink’s excellent book Mindless Eating: Why We Eat More Than We Think:

A while back, I teamed up with two professor friends of mine—Steve Hoch and Bob Kent—to see if anchoring influences how much food we buy in grocery stores. We believed that grocery shoppers who saw numerical signs such as “Limit 12 Per Person” would buy much more than those who saw signs such as “No Limit Per Person.”

To nail down the psychology behind this, we repeated this study in different forms, using different numbers, different promotions (like “2 for $2” versus “1 for $1”), and in different supermarkets and convenience stores. By the time we finished, we knew that almost any sign with a number promotion leads us to buy 30 to 100 percent more than we normally would.

So put numbered limitations or anchors on the quantity your customer can buy from you.

12. Story beats data

A Carnegie Mellon University study in 2007 by Deborah Small, GeorgeLowenstein and Paul Slovic compared the effects of story vs data.

Test subjects where asked to collect donations for a dire situation in Africa. The data pitch contained statistics about food shortages in Malawi, lack of rain in Zambia, and the dislocation of millions in Angola.

The second version talked about a particular girl in Zambia, Rokia, who was starving. People were shown her photo and asked to donate to help her directly.

On average, students who received the fact-based appeal from Save the Children donated $1.14. Students who read the story about Rokia donated an average of $2.38, more than twice as much.

In a third experiment, students were told Rokia’s story but also included statistics about persistent drought, shortfalls in crop production, and millions of Africans who were going hungry. While students who had read Rokia’s story alone donated an average of $2.38, those who read the story plus the data donated an average of $1.43.

The plight of Africa, the fight with poverty is too overwhelming and people feel their contribution is just a drop in a bucket, hence feel less inclined to help.

“If I look at the mass I will never act,” said Mother Teresa. “If I look at the one, I will.”

13. Marketing to men? Use photos of women

A field experiment in the consumer credit market found that pictures of women as as effective as low interest rate.

A South African lender sent letters offering incumbent clients large, short-term loans at randomly chosen interest rates. The letters also contained independently randomized psychological “features”. As expected, the interest rate significantly affected loan take-up. Inconsistent with standard economics, some of the psychological features also significantly affected take-up.

For the male customers, replacing the photo of a male with a photo of female on the offer letter statistically significantly increases takeup; the effect is about as much as dropping the interest rate 4.5 percentage points… For female customers, we find no statistically significant patterns.

Overall, these results suggest a very powerful effect on male customers of seeing a female photo on the offer letter. Standard errors however do not allow us to isolate one specific mechanism for this effect. The effect on male customers may be due to either the positive impact of a female photo or the negative impact of a male photo.

The experiment featured a rather dramatic range in interest rates – 3.25% to 11.75%. The effect of a photo of a woman on a loan offer was equivalent 4.5% difference in the loan interest rate.

Next time add a photo of a woman to your offer and see your conversions go up.

The above study did not feature sexy women. But would a sexy women wearing bikinis help?

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Research shows that arousal makes men stupid, as they become bad at making decisions. It gives them tunnel vision. The effect seems to be a short-term -one that would be most effective at the point of purchase, for impulse purchases.

The ideal selling situation would be to have the bikini-clad babe selling to the men in person. I guess you could do that also online for products meant only for men.

Studies have shown that sexy ads don’t really make men remember the product. We’re so lasered in on the sexy stuff, we don’t care what brand of product it is.

14. Want to convince leaders? Make them feel less powerful

Don’t bother trying to persuade your boss of a new idea while he’s feeling the power of his position, research suggests he’s not listening to you.

“Powerful people have confidence in what they are thinking. Whether their thoughts are positive or negative toward an idea, that position is going to be hard to change,” said Richard Petty, co-author of the study and professor of psychology at Ohio State University.

The best way to get leaders to consider new ideas is to put them in a situation where they don’t feel as powerful, the research suggests.

“Our research shows that power makes people more confident in their beliefs, but power is only one thing that affects confidence,” Petty said. “Try to bring up something that the boss doesn’t know, something that makes him less certain and that tempers his confidence.”

“You want to sow all your arguments when the boss is not thinking of his power, and after you make a good case, then remind your boss of his power. Then he will be more confident in his own evaluation of what you say. As long as you make good arguments, he will be more likely to be persuaded,” Petty said.

So in a nutshell:

• make the leaders feel less powerful and confident by talking about stuff they don’t know and if possible, talk outside of his office (neutral territory),
• after the pitch, remind them who’s the boss, so they could take action on your request.

15. The Sullivan Nod

Invented by restaurant consultant, Jim Sullivan, the Sullivan nod involves reciting a list of options but just inclining your head slightly when you reach the choice you’d like the buyer to make. The nod has to be subtle, but perceptible and works best in lists of no more than five items. According to Jim Sullivan, it’s successful up to 60 percent of the time.

Whenever servers suggest a beverage, have them smile and slowly nod their heads up and own as they make the suggestion. Body language is powerful, and research shows that over 60% of the time, the guest will nod right back and take your suggestion!

I bet you could use that online in sales videos. When talking about plans or packages, do the nod on the one you want them to buy.

16. Clarity trumps persuasion

Dr. Flint McGlaughlin of Marketing Experiments likes to say this: “Clarity trumps persuasion”. Remember this.

Persuasion tricks work when done subtly and skillfully. Overdo it and you lose the sale. When you’re writing sales copy or doing presentations, the best way to persuade people is to use clarity. Give people enough information to make up their mind without being cheesy or using hype.

17. 87% of people believe everything if there’s a percentage in it

That’s what I’ve heard anyway ;)

Why do conversion optimization?  It is the cheapest, quickest way to increase sales online. Think about this: if you’re currently converting at 1% (1% of your visitors buy your stuff), but can increase that to a mere 2%, you’ve doubled your sales.

Conversion optimization is about testing.  Most companies are not happy with their online conversion rate, says Econsultancy. Companies who were happy with their conversion rates did on average 40% more tests than those companies who were dissatisfied.

Why don’t you test?

3 likely reasons:

• You don’t really know what conversion optimization is or how to do it,
• You think it’s too complicated,
• You figure it takes too much time.

It’s not that complicated nor that time-consuming. Your business exists to make money, conversion optimization makes your business more money. If that’s not worth your time, I’m not really sure you got your priorities straight.

How do you know if  your conversion rate is high enough?

It depends. It depends on what action you want people to take, how much your product costs, where the people are coming from and so on.

Send spam to 100,000 people with your offer and you conversion rate will be 0%. Send an email to your in-house email list that has been nurtured for years, and you might sell to more than 10%.

The average conversion rate for purchases is commonly believed to be 2%, but don’t get stuck on that. If you’re doing more than 2%, it doesn’t mean you’ve reached Nirvana and should stop optimizing. A good conversion rate is the one that’s better than your current one!

Note: Bear in mind that overwhelming majority of people will NOT buy anything on their first visit to your site. Hence, don’t try to sell to everybody right away. Instead “sell” them the idea of coming back – ask them to join your email list, subscribe to your rss feed, follow you in Twitter and so on.

A quick refresher on testing methods

Create multiple versions of a web page (such as home page, product page, landing page etc) or even a part of a web page (such as headline wording, call to action button size, email capture box location etc) and see which version converts better – which version gets more people to do what you want them to do.

Customers often behave unexpectedly. This is one reason we need to test. The second reason is that you are not your customer, hence thinking customers use your site like you do will leave you in the dark.

You don’t know what works until you test it.

A/B testing

There are 2 ways to test. A/B testing (or ‘split testing’) is when you create two versions of a page (page A and page B). 50% of the traffic is showed page A, and the other 50% is taken to page B. This division is done automatically by software (see the end of the article).

If a user lands on page A, a cookie is placed on her computer, so that when she comes back later, she will always see version A. This ensures that people won’t really notice that you’re conducting any testing on your website.

Technically you could also do A/B/C/D etc testing, but the more versions you test at the same time, the more time it takes for you to know which one is the best. You need statistical significance. There’s a significance calculator spreadsheet in Excel you can use.

Google recommends at least 100 conversions per page before deciding which version is best. The exact amount actually needed is a matter of debate.  I say sometimes 25 conversions is enough to spot a winner (exact conversion rate requires more time).

If you test more than two pages against each other, it will take you much more time to find the winner. Speed of testing is also important, so I say skip the Cs and Ds.

Multivariate testing

Multivariate testing enables you to test more than 2 combinations at the same time, and the combination of different combinations. Let me explain.

Let’s say you’re testing 2 versions of a headline, 2 versions of a call to action text on a button and 3 different images of the page at the same time (as on the picture above).

So the winning combination could be:

• headline 1, button 2, image 1
• headline 2, button 1, image 3
• headline 1, button 1, image 2

… etc etc. Lots of possibilities, and you’d need a lot of traffic to find the winning combination.

Only do this if you have a ton of traffic. Low modest traffic websites should stick to A/B testing.

Tutorials

I have to say I was surprised to find very few quality tutorials for A/B testing and multivariate testing -mostly outdated videos or cheesy ones. Google’s own videos show the old interface that is no longer there (+ the video quality is horrible). Makes me think I should make some of my own. Here are some resources I think are pretty good:

• A beginners guide to Google Website Optimizer
• Google Website Optimizer 101: 108 tips
• Using Google Website Optimizer to run multivariate tests
• Multivariate testing with Google Website Optimizer (video)

Structured approach

According to the conversion optimization report , companies that have a structured approach to conversion are twice as likely to have seen a large increase in sales. So don’t just throw spaghetti on the wall and see what sticks, but have a “structured approach”.

Let’s go over some frameworks you can use for your conversion optimization.

Structured Approach by RedEye

You can download a white paper on the structured approach advocated by RedEye and Econsultancy (who conducted the conversion study mentioned above).

The approach they recommend is a 4-step loop (Measure-Analyze-Test-Optimize):

Image by RedEye

1. Measure. You can only improve what you can measure, so measure everything. Be clear on your business goals, benchmark your competition for ideas, dig in your web analytics data, conduct customer surveys, analyze search behavior on your site.
2. Analysis. Once you know your goals, it’s time to figure out what’s working well, what’s not and why. Analyze your content for relevancy and clarity, figure out if it matches user needs, do usability testing and analyze user paths/journeys on your site.
3. Test. A/B and multivariate testing are the two most valuable methods for companies to improve conversion. Prioritize tests by potential value and cost.
4. Optimize. After conducting tests, implement successful design and content changes.

I suggest you download the white paper and read the whole thing.

Invesp Conversion Framework

Invesp has 8 principles in their conversion framework.

1. Build buyer personas and focus on a few select personas when designing your layout, writing copy and so on.
2. Build user confidence, make them trust you by using all kinds of trust elements.
3. Engagement. Entice visitors to spend a longer time, come back to visit, bookmark it, and/or refer others to it.
4. Understand the impact of buying stages. Not everybody will buy something on their first visit, so build appropriate sales funnels and capture leads instead, and sell them later.
5. Deal with fears, uncertainties and doubts (FUDs). Address users concerns, hesitations, doubts.
6. Calm their concerns. Incentives are a great way to counter FUDs and relieve friction.
7. Test, Test, Test.
8. Implement in an iterative manner. Build smaller blocks, make smaller changes, and test them and improve their performance.

C = 4m + 3v + 2(i-f) – 2a

This is not a lesson in physics, but a conversion formula developed by Marketing Experiments.

Luckily you don’t need to solve the formula above, it’s actually a helpful tool to keep at arms length (like print it out and stick on your cubicle office wall). This is what the characters mean:

C = Probability of conversion
m = Motivation of user (when)
v = Clarity of the value proposition (why)
i = Incentive to take action
f = Friction elements of process
a = Anxiety about entering information

Translation: The probability of conversion depends on the match between the offer and visitor motivation + the clarity of the value proposition + (incentives to take action now – friction) – anxiety. The numbers next to characters signify the importance of it.

Friction is defined as a psychological resistance to a given element in the sales or sign-up process. Anxiety is a psychological concern stimulated by a given element in the sales or sign-up process. Reduce these as much as possible and do what you can to increase the users’ motivation and incentive and clarify the value position.

LIFT

An interesting framework for analyzing landing pages is LIFT, developed by WiderFunnel:

This framework has value proposition as vehicle that provides the potential for the conversion rate. It’s the basis of it all. Relevance and clarity boost conversions, while anxiety and distraction kill it. Urgency is what propels people to take action right away.

Ingredients of a successful test

Not all tests are equal. Here’s what you need for successful conversion testing:

• A hypothesis: testing is not there to prove an idea works, but to assess whether it works.
• Don’t test your site by showing a different version at different time periods (e.g. one week one design, second week another design), the results will NOT be accurate.
• Don’t be afraid to fail: In testing & optimization, failure is success. Too many times, I have seen the uglier, poorer cousins convert better
• If you don’t have huge amounts of traffic, don’t test too many variations at once. Also, if you do A/B testing, it’s worth testing one change at a time – otherwise you won’t know which thing made the difference.
• Don’t end the test too soon, make sure results are statistically significant.
• Avoid  “meek tweaking”—in other words, making changes that are never likely to have a significant effect.(See below)
• Testing should never end. Decide what to test, test it, make a change and test again.

What are the most important things to test?

We could test everything, but let’s test the 20% that makes 80% of the difference.

Now let’s look at each area separately. I’ll showcase some cool recent experiments you can learn from.

Value Proposition

Value proposition is the main reason a prospect should buy from you.

(If you’re struggling with yours, here’s a worksheet (pdf) to guide you through the process of effectively communicating your value proposition.)

Can you find a value proposition here?

Didn’t think so. Stating your company name as the first thing and throwing around superlatives like “finest quality” don’t convince much.

What about here?

This makeover version brought 145% increase in conversions.

Marketing Experiments recommends you test your value proposition via PPC ads first, and only then test the winning versions on your landing page:

Images from Marketing Experiments

Headline

“On the average, five times as many people read the headline as read the body copy. It follows that unless your headline sells your product, you have wasted 90 percent of your money. The headlines which work best are those which promise the reader a benefit.”

- David Ogilvy, ad guru

A good headline can make the difference. It’s kind of nice when just changing the wording of your headline increases your results by 127%.

A headline is the first thing a visitors sees and reads on your website or landing page. It’s the very first thing you say about you. If you start out with “Welcome!”, you’ve already lost.

If the visitor came through a paid ad, the landing page headline should reinforce the message from the ad; utilize persuasive momentum.

If you’re split testing article headlines or email subject lines, remember the 65 character rule. Google only displays 65 characters in its search results, email clients such as Gmail will truncate long subject lines and Twitter doesn’t allow too much for tweeting your headline.

CityCliq: 88.9% improvement

The winning headline is the one on the right.

Offer

A confused mind always says ‘no’, goes the old direct marketing adage.

The offer is the deal you’re presenting to your visitor. Make it clear and concise, nobody will try hard to understand what is it that you’re offering.

NB! Offer is not a “call to action,” that comes later.

Call to Action buttons

The most important part about CTA buttons is that they’re clearly visible, above the fold and there’s ideally just one per page. The more choice you give, the harder it is to decide.

People’s attention span is limited. They don’t want to figure out what buttons that say “submit” actually do. Buttons without the word ‘submit’ convert better, tests show. Steve Krug was right: “don’t make me think.”

The word ‘free’ on the other hand seems to be quite magical. For instance Firefox improved their conversions by 3.6% (over 500 more downloads per test) when they changed their button text from “Try Firefox 3″ to “Download Now – Free.”

What about the color of the button? Big orange buttons are all the rage these days (think Amazon), but there are still some other colors in the world. In this test red kicked greens butt and converted 21% better (orange was not tested):

Image: Hubspot

Larger sized buttons usually do better. Hubspot found that a good button size is around 225px wide and 45px high.

Oh yeah, never ever have a “reset fields” button. Nobody fills a form to clear the field in the end. If they do, they won’t bother to start over.

Friction

Whenever there’s somebody asking for a sale, there’s friction! Reducing friction produces a disproportionately high return on invested effort.

Friction consists of two components:

Length: fatigue, irritation, or aggravation caused by forms or processes that ask for more time or information than feels reasonable)

and

Difficulty: poor usability, asking questions people don’t know the answers to, insufficient product information etc).

Absence of trust is also friction – a visitor will not convert if he doesn’t have confidence or trust in you.

MarketingExperiments brings this case study. The original page with 3 calls to action:

This was the treatment:

The optimized form requires only one choice, and the call-to-action is simply a “Confirmation,” thereby minimizing difficulty-oriented friction.

By including the offer price on the landing page (which also removed one page in the order process) and minimizing friction by reducing the level of decision making difficulty on the order form, free-trial-signup conversion rose by 65%.

Another one:

Simply reducing the number of fields and dramatically reducing the perceived page length through layout increased overall conversion by 77%.

Here are some things that reduce friction:

• Testimonials and/or customer reviews,
• Case studies of previous customers,
• Third-party references such as media mentions or reviews,
• Easy to find company contact info, employee photos and bios,
• Trust marks that communicate your site is secure and confidential data is handled with care,
• Short forms (whenever you add an input field to your form, ask yourself, “Is this additional information worth losing sales?”),
• Clarity: focus on what the user gets and needs to do to get it,
• Distraction removal:  the offer page doesn’t contain anything  not related to converting the user,
• Use language that is familiar to your target audience – avoid jargon and corporate speak,
• Guarantee: offer a guarantee on their purchase such as a 90-day risk-free trial; 100% money-back guarantee; or a 100% satisfaction guarantee,
• Beautiful design: websites that are more attractive  create a greater feeling of trustworthiness and professionalism in consumers.

Stanford Persuasive Technology Lab’s web credibility guidelines is a must-read for all.

Price

The right pricing can really help you boost your conversions.

Read our article on pricing experiments.

Radical change

This is when you go beyond testing one element to create an all together new and different version.

Great examples (click on the links of each case study to read the specifics):

SEOMoz: 52% improvement in sales and $1 million dollars increase in revenue

Image: Conversion Rate Experts

How they did it:

• created a web page long enough to tell the story
• infused the headline with curiosity rather than overt “buy me” language
• explained precisely what customers would get at each level (plan)
• showcased things customers cared about but SEOmoz had taken for granted
• augmented the message with video
• lowered the risk by offering free subscribers a 30-day full-featured membership for just $1

Highrise: 2 radical changes, 37.5% and 102.5% improvement in conversions

Image: 37Signals

What they learned:

• You really need to test: A long form page had a 37.5% increase in net signups compared to the original. A person design converted better than the original. Then they added more info under the person design page, and it converted worse.
• Big photos of smiling customers work (but specific person didn’t quite matter)

Performance Based Design book: 131.2% improvement on landing page

What they learned:

• Engaging visitors through appropriate copy improved sign ups by 100%+
• Sometimes you can overthink. The winning design was thrown together very, very quickly, yet outperformed the more formally ‘designed’ landing page with more than double the conversions.

Conversion optimization tools

There are quite a lot of tools available, WhichTestWon.com lists 39. I’m going to skip expensive entreprise tools and list some of my favorites that are easy to use and easy on the wallet.

• Google Website Optimizer – The best part of GWO is that it’s free. Most people can do most testing with it, but it requires you to be somewhat tech savvy. Google does provide handy video tutorials that help, but they’re somewhat outdated and the sound quality on some is plain horrible.
• Visual Website Optimizer and Optimizely. Great services for entrepreneurs – both easy to use. VWO’s cheapest plan ($49) comes out to $0.0049 per visitor. Optimizely’s cheapest plan ($19) comes out to $0.0095 per visitor. Here’s how they compare to each other.
• ConversionDoubler seems to be in the same ballpark, but I haven’t used it myself.
• Zentester has a forever free plan, but the catch is that your test results are public.
• MaxA/B is an easy to use WordPress plugin for A/B testing. I’ve had some issues with it in the past, but for the most part seems to do the job.

Just because something worked on somebody’s site, doesn’t mean it will work on yours. For instance take this case where reducing the size of call to action and removing urgency elements actually increased the conversion rate.
No website is the same and no users are the same. The trick is to understand your users and target them in the most appropriate manner. Customers are influenced by a range of activities before they convert; website content, website usability, on and offline advertising all play a role in whether or not the consumer will make a purchase. You have to test.

Excellent libaries of case studies

There are several good conversion optimization case study resources.

• WhichTestWon claims to have the world’s biggest library of A/B & multivariate testing case studies (164 at the moment of this writing). Offers paid membership for in-depth information on them.
• MarketingExperiments blog has a ton of case studies. Not all of the posts in the link are case studies, but a lot of them are.
• Visual Website Optimizer has a user-friendly database of case studies. Free.
• ABtests.com. All kinds of tests. Upload your own test results.
• WiderFunnel case studies. 30 or so.

Do you have an experience with Conversion testing to share?

Thanks for reading.

Image credit for the top image.

Don’t ask, can’t tell

Asking people what they’d pay for and how much rarely works. For one thing people will tell you what they WANT to pay—which is obviously much less than what your product or service is actually WORTH. Second, what people say and what people do are very different things.

When it comes to money, people are unable to predict accurately whether they’d pay or not. It’s much easier to spend hypothetical dollars than real ones.

Also it’s worth remembering that people really don’t know how much things are worth, what’s a fair price (which is the reason TV-shows like “The Price is Right” can actually exist).

William Poundstone, the author Priceless: The Myth of Fair Value says this:

“People tend to be clueless about prices. Contrary to economic theory, we don’t really decide between A and B by consulting our invisible price tags and purchasing the one that yields the higher utility, he says. We make do with guesstimates and a vague recollection of what things are “supposed to cost.””

People are weird and irrational, and there’s much we don’t understand. Like why do shoppers moving in a counterclockwise direction spend on average $2.00 more at the supermarket?

Why does removing dollar signs from prices (24 instead of $24) increase sales?

What will work for you depends on your industry, product and customer. When you try to replicate what Valve did to increase their revenue 40x, it might not work for you, but then again, why not give it a try?

Here’s a list of pricing experiments and studies you can get ideas from and test on your own business.

The Economist and decoy pricing

Dan Ariely describes this famous example in his amazing book Predictably Irrational. He came across the following subscription offer from The Economist, the magazine (he’s also explaining this in his TED talk here):

Both, the print subscription and Print & web subscription cost the same, $125 dollars. Ariely conducted a study with his 100 bright MIT students. 16 chose option A and 84 option C. Nobody chose the middle option.

So if nobody chose the middle option, why have it? He removed it, and gave the subscription offer to another 100 MIT students. This is what they chose now:

Most people now chose the first option! So the middle option wasn’t useless, but rather helped people make a choice. People have trouble comparing different options, but if 2 of the options given are similar (e.g. same price), it becomes much easier.

The same principle was used with travel packages.

When people were offered to choose a trip to Paris (option A) vs a trip to Rome (option B), they had a hard time choosing. Both places were great, it was hard to compare them.

Now they were offered 3 choices instead of 2: trip to Paris with free breakfast (option A), trip to Paris without breakfast (option A-), trip to Rome with free breakfast (option B). Now overwhelming majority chose option A, trip to Paris with free breakfast. The rationale is that it is easier to compare the two options for Paris than it is to compare Paris and Rome.

A graph to describe this:

So if you add a slightly worse option that is similar to A (call it A-), then it’s easy to see that A is better than A-, hence many people choose that.

How you can use it:  Add a decoy package or plan to your offer page, next to the offer you really want them to take.

The magic of number 9

Go to Wal-Mart and you see prices ending with 9 everywhere. Does it really work? Surely all intelligent people understand that $39 and $40 are basically the same.

Well, in eight studies published from 1987 to 2004 charm prices ($49, $79, $1.49 and so on) were reported to boost sales by an average of 24 percent relative to nearby prices (as per Priceless).

In one of the experiments done by University of Chicago and MIT, a mail order catalog was printed in 3 different versions. One women’s clothing items tested was sold for $39. In experimental versions of the catalog, the company offered the same item for $34 and $44. Each catalog was sent to an identically sized sample.

There were more sales at the charm price of $39 than at either of the other prices, including the cheaper $34. $39 had both greater sales volume and greater profit per sale.

People used to download music for free, then Steve Jobs convinced them to pay. How? By charging 99 cents.

The explanation of why numbers ending with 9 work better has been much debated over the years. Mental rounding alone can’t explain it. Seems that 9 truly is a magic number.

Is there anything that can outsell 9? 

Researches found that sale price markers (with the old price mentioned) were more powerful than mere prices ending with the number nine. In the following split test, the left one won:

9 not so magical after all? Not so fast!

Then they they split tested the winner above with a similar tag, but which had $39 instead of $40:

This had the strongest effect of all.

I’m wondering whether the effect of this price tag could be increased by reducing the font size of $39. Say what?

Marketing professors at Clark University and The University of Connecticut found that consumers perceive sale prices to be a better value when the price is written in a small font rather than a large, bold typeface. In our minds, physical magnitude is related to numerical magnitude.

Oh yeah, when you go to Nordstrom, you don’t see any prices ending with a 9. The subliminal message here is “expect to pay”.

Anchoring and the contrast principle

Do this test at home. Pour water in 3 bowls. Fill one bowl with cold water, the second with hot water and third one with lukewarm water. Now stick one hand in the cold water and the other one in the (not too) hot water. Keep them there for 30 seconds or so. Now put both of your hands into the lukewarm bowl. One hand will feel the water is warm, the other one that it’s cold.

It’s about the contrast. The same principle applies to price. Nothing is cheap or expensive by itself, but compared to something.

Once you’ve seen a $150 burger on the menu, $50 sounds reasonable for a steak. At Ralph Lauren, that $16,995 bag makes a $98 T-shirt look cheap.

What’s the best way to sell a $2000 wristwatch? Right next to a $12 000 watch.

This mental process has a name. It’s called anchoring and adjustment.

Anchoring

In the 1970s by two psychologists by the names of Tversky and Kahneman theorized that suggesting an initial figure to a test subject caused that subject to use that number as a starting point for estimating unknown quantities.

In their study test subjects were told the number 65 and then asked to estimate what percentage of African nations were members of the UN. The average response was 45%. They then tested a second group but salted them with the number 10 and their average response was 25%. Amazingly the group that was primed with the number 65 estimated nearly twice the true answer (23%) while the group primed with the lower number estimated a lower percentage (much more accurately).

Anchoring influences prices

Poundstone describes an experiment done with real estate prices. The researchers invited real estate experts and undergrad students to appraise a home for sale. All the test subjects were given the information a buyers would normally have, including a list of houses that recently sold, nearby houses currently for sale and so on + what the seller had listed the house for.

The subjects were divided into 4 groups, each given a different listing price, and were then asked to estimate what the home was worth.

These were the results:

Anchoring worked even on real estate pros that had been selling properties in the area for 10+ years. Next time somebody asks you for a rough estimate or a ballpark figure, make sure it’s high!

How you can use it: Start throwing out high numbers. Add some very expensive products to the selection (that you don’t even intend to sell). If the final price of your service / product is a result of negotiations, start high. If you’re competing on price, state how much others are charging before revealing your price.

Straightforward pricing

Ash Maurya, a startup entrepreneur, published an article on VentureHacks describing his pricing experiments with a photo sharing service.

He tested a single, straightforward $49/yr offer vs 2 plans ($49/yr and $24/yr) vs 3 plans (added a freemium plan).

The result? Surprisingly the single price offer won. Why? His own guess:

“It does pay to align pricing with your overall positioning. Our unique value proposition is built around being “hassle-free and simple” and people seemed to expect that in the pricing model as well.”

It might also be that in these complex and fast times we live in, people yearn for simplicity.

Note: His freemium plan actually converted 12% more, but had the lowest retention. Be careful when offering free plans. You might just end up with a ton of free users to support and pay for. 

How you can use it:  Consider your positioning and see if you can align your pricing to it. If you’re offering different plans right now, experiment with a single plan.

Pay what you wish

Pay what you want is a pricing system where buyers pay any desired amount for a given product, or nothing at all. In some cases, a minimum is set, and/or a suggested price may be indicated as guidance for the buyer. The buyer can also select an amount higher than the standard price.

Suggested price

Suggested price can be a good idea – remember anchoring? Setting a fair suggested price gives the customer a true sense of value. It won’t prevent low offers, but it will keep more buyers in your ballpark.

What about counter-offering lowballs? The danger here would be to appear that you’re just toying with them and it’s not really “pay what you wish”. GetElastic brings this example:

“Coming back with counter-offers is merely e-bargaining. It reveals you have a reserve price, and instead of offering a sale, customers must “guess” how low you’ll go. At worst, customers may feel they are being gamed into pay more than a sale price.

Ashampoo Software (that’s not a typo) gets downright insulting when you sink too low below “regular price.” The snarky dialog box reads a condescending “This offer is much too low. Please enter a reasonable price.” Users don’t have time to play guessing games about what is a reasonable offer only to be ridiculed by a script.”

Gap tried a variation of this too. They offered customers a one-day opportunity to name their price for certain styles of khaki pants on the www.gapmyprice.com microsite. Lowball offers were returned with slightly higher prices by the Gap, which the customer had one chance to accept or decline.

Since they’re not doing anymore, it probably did not go too well.

Well-known PWYW examples

In October 2007, the British band Radiohead launched their latest album – In Rainbows – on the Internet. The band allowed fans to download the album freely and offer, in retribution, any amount of money they would like. Later they disclosed that the download of their new album generated more profit than the accumulated downloads from all previous albums.

Panera Bread Co. used this same idea when it opened its first pay-what-you-want restaurant in Clayton, Mo. The company ended up making over $100,000 in revenue in the first month alone. It opened it’s 4th restaurant of this kind in Portland, and said at the time that about 20 percent of the visitors to the cafes leave more than the suggested amount, 20 percent leave less and 60 percent pay what is suggested.

But 9 months later it’s not doing so well. The Portland café is only making about 60 percent of the revenue of a regular, full-paying location, compared to an 80 percent take in the politer climes of St. Louis and Detroit. Also, the homeless tend to camp out there and stay all day if they aren’t shooed away, so Panera had to hire a bouncer.

It’s important to have fair minded customers for this model to work (homeless and hungry people probably care more about being fed, than being fair).

Combine “pay what you wish” with charity

There’s some research that pay what you wish pricing works best when combined with charity.  Ayelet Gneezy, a marketing professor at the University of California-San Diego, conducted a field experiment at a theme park (sample size: over 113,000).

Customers were presented four different pricing schemes for souvenir photos: a flat fee of $12.95; a flat fee of $12.95 with half going to charity; pay-what-you-wish; and pay-what-you-wish with half going to charity.

At a flat fee of $12.95 per picture, only 0.5% of people purchased a photograph; when customers were told that half the $12.95 purchase price would go to charity, a meager 0.59% purchased a photo. Under the simple pay-what-you-wish variation, 8.39% of people purchased a photo (almost 17 times more than before), but customers paid only $.92 on average.

The final option — pay what you wish, with half the purchase price going to charity — generated big results: purchase rates of 4.49% and an average purchase price of $5.33, resulting in significant profits for the theme park. This is a substantial result, especially since it came from a real setting.

Of course, the anonymity of the Internet removes the social pressure one feels after being served personally by a human being. It’s one thing to have the amount you choose observed and another thing to download stuff without being seen.

The book Smart Pricing suggested that successful pay what you want programs are characterized by:

• A product with low marginal cost
• A fair-minded customer
• A product that can be sold credibly at a wide range of prices
• A strong relationship between buyer and seller
• A very competitive marketplace.

Offering 3 options

The old truth about offering 3 pricing options holds water. Here’s a pricing experiment in selling beer – again from W. Poundstone’s amazing book Priceless.

Image credit

People were offered 2 kinds of beer: premium beer for $2.50 and bargain beer for $1.80. Around 80% chose the more expensive beer.

Now a third beer was introduced, a super bargain beer for $1.60 in addition to the previous two. Now 80% bought the $1.80 beer and the rest $2.50 beer. Nobody bought the cheapest option.

Third time around, they removed the $1.60 beer and replaced with a super premium $3.40 beer. Most people chose the $2.50 beer, a small number $1.80 beer and arounf 10% opted for the most expensive $3.40 beer. Some people will always buy the most expensive option, no matter the price.

You can influence people’s choice by offering different options. Old school sales people also say that offering different price point options will make people choose between your plans, instead of choosing whether to buy your product or not.

How to test it: Try offering 3 packages, and if there is something you really want to sell, make it the middle option.

Price perceptions

I’m sure you know the classic “pennies-a-day” effect: “it costs less than $1 a day!”. NPR stations ask people to donate by joining their dollar-a-day club. Framed in that manner, the donation seems quite reasonable—about the cost of a cup of coffee. Contrast that with what would happen if they asked people to join their “$365 a year” club.

Neil Davidson writes this about price perceptions (in his book on software pricing called Don’t Just Roll the Dice):

“People base their perceived values on reference points. If you’re selling a to-do list application, then people will look around and find another to-do list application. If they search the internet and discover that your competitors sell to-do list applications at $100 then this will set their perception of the right price for all to-do list applications.”

If your product is more expensive than the common reference points, you need to change the perception of the category you’re in.

How did Starbucks get away with starting to charge $3 and more for coffee, when most other cafes were charging $1 or so? They changed the experience of buying coffee, so the perception of what people were getting, changed. It was like a different category product.

They also changed the name. Not just coffee, but Pike’s Place brew or Caramel Macchiato.

If you’re creating a new category, there’s no price reference and people are much more likely to accept any price you name.

How you can use it: If you want to charge more than the market average, look at the competition: how they package their offering; what’s the user experience like, and change that. If you look like a new category, people are more likely to pay up.

On the other hand, if you can profitably sell something much cheaper than the other guys, great. Use their pricing as the reference point and you’ll win.

Context sets perception

You are stranded on a beach on a sweltering day. Your friend offers to go for your favorite brand of beer, but asks what’s the most you’re ready to pay for the beer?

This was the scenario for a pricing experiment conducted by Richard Thaler.

Image credit

They tested two scenarios. In the first one the friend was going to get beer from the only place nearby, a local run-down grocery store. In the second version, he was going to get beer from the bar of a fancy resort hotel. The ambiance of the hotel was irrelevant, as the beer was to be consumed on the beach.

Invariably, Thaler found, subjects agreed to pay more if they are told that the beer is being purchased from an exclusive hotel rather than from a rundown grocery.

It strikes them as unfair to pay the same. This violates the bedrock principle that one Budweiser is worth the same as another, and it suggests that people care as much about being treated fairly as they do about the actual value of what they’re paying for.

Thaler considered what his imaginary grocer could do to boost beer sales. He advised “investing in seemingly superflous luxury or installing a bar”. This would raise expectations about what the proper price of beer would be, resulting in more purchases.

We  happily pay $80 for 6 things in Whole Foods, but would consider that way too much in a regular supermarket.

How you can use it: Invest in seemingly superflous luxury. Use web design or packaging that says “expensive”. 

Can I split test the price?

Technically you can, but A/B testing your price is a dangerous territory. A number of companies (Dell, Amazon and others) in the past have been caught and got in trouble for doing just that, showing different price for the same product to different visitors.

A better and safer approach is to test the price across objects. Don’t test the same product for $19 vs $39. Rather you should test two different products that essentially do the same thing, but just have a different price tag.

Before deciding on your pricing strategy, it’s worthwhile to read Cindy Alvarez’s article where she makes the point that price is not the only cost to consider. When customers consider “what something costs”, they’re actually measuring three main drivers: money (cost), time  (how long will it take to learn?)  and mental energy(how much do I have to think about this?). Take into account the profile of your buyer.

Combine research from this article

It seems to me that you could combine a lot of the research covered here into a single pricing experiment. How about this:

1. You create 3 different plans/packages, and intend to sell mainly the middle one. If your product is expensive, make your website look expensive.
2. The first plan is a decoy. It’s similar to the middle plan, but offers visibly less value while costing almost as much. Think of it as A- (as per The Economist example).
3. Second plan, the one you want to sell, offers good value for money. The price ends with 9. Maybe it even shows that it has been reduced from a previously higher price or it’s a sale (either way, it has to be true / ethical).
4. Third plan is to serve as a contrast to the middle one, it’s role is to anchor in a high figure. Make it much, much more expensive than the middle plan. You don’t actually intend to sell it, but there always the type that wants the most expensive plan – so make sure you can actually deliver on it.

If you decide to give this a try, let me know the results :)

What’s hype anyway? Lets define it first. Hype is technically the act of using hyperbole, which means to exaggerate an example for the purpose of making a point more clear.

If you use it wisely, it can work superbly. Unfortunately it requires a lot of skill to do it well, and the vast majority of marketers fail at it. All of us have seen this kind of claims:

Make $434 343 on autopilot in just 2 weeks!

Our investment portfolio guarantees 20:1 returns!

Top secret strategies that the Fortune 500 companies don’t want you to find out!

If one comes across such claims, it automatically makes everybody turn on their bullshit detectors and be skeptical about all of your copy. It makes people doubt even your non-hype parts of the sales copy.

Anotger common way to use hype is to say the buyer will get a bunch of free bonuses with the purchase – and the value of these bonuses is like $12,000 (way more than the cost of the product). Don’t do that.

If the claims you’re making sound too good to be true, that’s what people will think.

Instead of hype, use practical and conversational style. Facts with proof, reasonable promises. Point out the things the product will NOT do to add a touch of reality. A friend of mine runs a financial newsletter company. Recently he told me that their hype-free sales copy always outperformed the salesy version in A/B tests, so they’ve stopped using hype and exaggerated claims.

Your brand is your most valuable asset, don’t ruin it with hype. Remember the words of Warren Buffet:

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.

Use this test to weed out hype from your sales copy: if the copy contains sentences you wouldn’t use when talking to your friend or your spouse, re-word it.

Check it out here:

http://www.problogger.net/archives/2011/09/30/principles-of-effective-blog-design/