Results-Focused Online Marketing Strategies

I have a confession to make: I’m always a little nervous when I book airline tickets online. I’ve done it many, many times, but for some reason I always feel like I’m going to screw up my reservation and get stuck with the wrong tickets.

I’m going to go out on a limb and bet that I’m not the only person who feels this way.

With this in mind, let’s look at a huge conversion mistake I just experienced while buying tickets online from United…

I got through the flight selection process no problem (double checking my flights/times at each step), entered my credit card info, hit “okay” to purchase the tickets when the following (click to see full size version) came up:

So, this screen comes up and the first thing I see is the big, bold 932.51 when I had just clicked “okay” to a $584 total. My first thought was that there’s a mistake - given the prominence and the positioning of this price, it definitely looks like the price I’m about to get charged. Feeling a bit flustered, I started to read through the text and still was not immediately sure what the deal was.

Also, upon reading it and figuring it out, I began to doubt whether I should click on the “Purchase original itinerary” button. Taken literally, I was worried that it might truly be my original itinerary (I changed it a couple times while looking up the flights). Combined with the fact that the text above refers to the “current” itinerary and the text below refers to the “original itinerary” I definitely was not feeling too good about hitting that button.

Next, I found myself wondering whether I needed to “check” the “offer and conditions” checkbox. It kind of looks like you don’t need to, but on any other site I buy from you usually need to check such a box.

Plus, the page refers to you having to “Decline” the offer if you don’t want it. I didn’t see a “Decline” button anywhere, leading to further discomfort.

It also says it will expire in 5 minutes. Does this mean I’ll have to “rebook” if I don’t make the decision right away.

Furthermore, it’s a horrible offer! They want to charge over 50% more to upgrade ONE WAY on my 2 hour flight!

So, basically, United has taken someone intent on finishing a transaction, thrown in an unexpected/overpriced/confusing offer, and tried to add a sense of urgency to the whole thing.

Yikes.

At this point, I slowed down, determined that I was probably being paranoid and… saved a screen shot of this page so I’d have something in my defense if the wrong purchase went through.

What’s the takeaway from this? In the words of a manager I once had, “Once you make the sale, shut up! You only create opportunities for the buyer to change their mind.” This is great advice in this case. I absolutely guarantee that United loses sales with their confusing upsell tactic.

The lost sales may be balanced by the fact that United occasionally upsells the odd passenger to this ugly offer, but there’s another way to approach this. Why not make this offer AFTER they have made the original booking? If they offered this immediately after confirmation of the transaction they would remove all the risk of someone abandoning and there’s no reason why they couldn’t get the same amount of upsells (they could even keep the cheesy “expires in 5 minutes” part if they so desired).

The bottom line is to not try to accomplish an upsell before you’ve made the original sale, unless you can do it without risking the sale. United fails in this regard and damages their brand in the process.

For a while in my career I worked in a company where traffic was considered the main yardstick for success and growth. This became incredibly frustrating at times as, while there was always some more budget to grow traffic, getting budget for marketing optimization and conversion improvement was next to impossible.

While traffic is indeed a critical factor, it’s the wrong one to focus on if you haven’t invested in optimizing conversion on your web site.

Like George Kastanza figuring out a witty retort hours too late to use it, here I am some years later to present some pretty compelling math on why companies should focus first on conversion.

First, a couple assumptions:

• - The company in this example is selling a product (but the same principles work for ad revenues, B2B lead generation, etc.)
• - The company has not undergone extensive marketing optimization on their web site and/or promotions already.
• - There exists an opportunity to raise overall conversion rates by 5% or more (I have yet to work with a company where this is not possible).

In the first example below we have an example of a CPM banner ad where conversion is the only option as the ad is currently running at negative ROI (See previous post on Working the Math on Online Advertising).

As you can see, with the assumptions I put in, the ad campaign initial is returning only $.80 on each dollar spent on it. Despite the thought of “making it up in volume,” spending more on reach on this campaign will only drive it further and further into the red.

On the other hand, if the company takes the time to run some insightful a/b tests on the ad and the landing page, all of a sudden the campaign is making money (ads and landing pages present significant opportunities for conversion improvement). Best of all, the campaign is now scalable. In this case, the logical thing to do is to NOW increase the reach of the campaign until it hits a point of diminishing return.

In the second example, let’s have a look at web site conversion and the case for optimization versus spending on reach.

In this case we compare a 10% traffic improvement against a 5% conversion rate improvement (from 2% conversion to 2.1% conversion). “But Rob,” you might say, “we make more extra revenue by paying for traffic and we get 10% more people exposed to our brand.”

That argument would be true for the first month, but to truly understand the power of optimization, let’s look at the math over a year:

• - Buying 10% additional reach costs $50,000 per month, which equals $600,000 per year, for a 160% overall ROI in the example shown.
• - Paying a consultant or agency $10,000 a month for 4 months is a good guess for what it might take to get 5% better conversion on a site with these kind of revenues (hey, I never said this blog wouldn’t be self-serving sometimes). This assumes the site hasn’t already been optimized.In this case, let’s assume the 5% improvement kicks in 2 months into the process. What this math works out to is that a mere $40,000 spent on conversion will result in $400,000 in new revenues for a 10x or 1000% ROI.

That’s pretty compelling math, isn’t it? Better yet, you don’t have to choose one over the other. By doing the work of improving conversion FIRST, then adding the spend on reach, you now get an example that looks like this:
Wow. Keep in mind that no real life scenario is as simple as the case I’ve described. That said, these are incredibly powerful principles and I hope I’ve helped show you why it makes sense to focus on conversion before opening the wallet for reach.

BTW, despite my tongue in cheek reference to hiring a consultant or agency, conversion and marketing optimization is definitely an area where you should develop in-house skills if at all possible.