Marketing Experiments: Conversion Heuristic
Marketing Experiments: Conversion Heuristic
Don’t be scared off by the ivy-league word, heuristic; it’s a fancy way of saying “enabling discovery.” Discovery is a perfect word because like discovery, conversion is a process. It’s a methodical process built on experience, execution, data, and roadmaps.
One of the best roadmaps I’ve come across was created by Flint McGlaughlin, a god amongst marketers. He created the Conversion Heuristic at Marketing Experiments.
While it would be nice if I could say, “I increased sales for my business and my client’s business 10x using this formula.” But that wouldn’t be right. It’s just a really really good model to help you find opportunities to optimize conversion.
So that said, I want to explain it to you in a way that is easy to understand so you can use it right away. So let’s go!
What is it?
The conversion heuristic is a model used to increase the likelihood of turning your target audience into buyers. It’s comprised of five weighted factors that influence conversion.
The conversion heuristic goes like this:
C = Conversion
Conversion is our goal. Generally, this is mostly referred to as a sale, but not always. It can be a conversion from one part of your sales funnel to the next. For example, say I’m trying to increase my email signups, you’d then call this the conversion and use this model to analyze the likelihood of getting signup conversions.
Not all conversions are equal, therefore not all factors in this model have to be the same. An email signup my be worth 3x as much as a sale because, if done well, your email marketing can generate multiple purchases from 1 customer.
M = Motivation
Motivation is the biggest factor in the equation. Motivation will determine your sales cycle, your marketing strategy, and pretty much all other marketing activities.
Motivation is influenced or determined by your product, seasonality, or audience.
Product – someone selling light bulbs would have a very quick sales cycle because if a person has a burnt out lightbulb there’s an immediate need to get a new one. Compare that with someone who sells insurance or apparel goods and it’s a slower sales cycle because there is typically no immediate need for such products.
Seasonality – seasonality can have an impact on buyer motivation because important shopping days and seasonal changes will impact when buyers need and want to buy.
Audience – motivation is determined by your audience because each audience segment or member has unique motivations for purchasing. For example, someone who started a business may need an accountant vs. someone who already has an accountant will be motivated differently.
V = Value Proposition
- A compelling value proposition demonstrates:
- Clarity – What is the offer? Can I understand the message?
- Credibility – Can I believe it?
- Exclusivity – Are you the only one who has this?
- Without a proper value proposition you haven’t answered a fundamental question about your business – why should a person buy from you vs. one of your competitors.
In eCommerce, especially the dropshipping model, this is especially challenging because often times sellers are merely competing on price. But this is a problem because it sets up a race to the bottom. And often brands have MAP pricing that you can’t sell below, so it’s important to give buyers a reason to buy from you and not from competitors.
In other crowded markets, this is equally challenging and must be solved for if you are going to survive outside of, as Flint McGlaughlin puts it, “pockets of ignorance.”
I = Incentive
- An incentive is simply a discount, bonus, or special offer that is used to “tip the scales” in favor of the sale in the event that there is some friction in the purchase. This is one way of differentiating yourself in the market. This is also one way to influence motivation.
During holiday sales, for example, eCommerce retailers will often offer additional incentives to buy. If you sell services, you may want to include micro-offers such as free audit or extra work that would tip the scales as a value-add.
F = Friction
Friction is the hoops that a customer must go through in order to receive the value that you are providing – from form fields to the actual cost.
Friction can be the number of pages a customer has to go through to purchase. This is why you often hear marketers say to limit the number of pages to check out.
Friction can be addressed in web copy too. Often times you’ll see long sales pages or funnels that attempt to address buyer hoops and how to overcome them. For example, if you sell an email marketing platform, one way to address friction is saying how easy it is to use the platform and how it readily integrates into their current web platform.
It’s important to note that in the formula, I-F is incentive minus Friction because they’re directly related – you need to offer incentives that outweigh the friction, or difficulty of purchasing.
A = Anxiety
Anxiety is the worry that customer deals with when purchasing. For example, they may be asking:
- What are you going to do with my information?
- What is this checkout secure?
- WIll you call me at extremely inopportune times?
We must come up with a way of dealing with in our copy, design, and conversion process of each of these in order to increase the probability of conversion.
How This Model Works With Marketing
Now that we’ve broken down the model, we need to use it in our business decisions, from product creation & curation to optimizing the sales funnel for purchase.
You can use this model in deciding what keywords to bid on, what audience to build for, what your web copy and design should be, and so many other marketing facets.
So I hope you now can better discover areas to optimize conversions in your business, and how you can use the Marketing Experiments’ conversion formula to understand your buyers’ shopping experience. If you would like to know more so you can help grow your business, give us a call, and ask about our conversion insights report. Let us know how we can help.