Interview with Richard Joe: On CRO for Growing Businesses, Understanding the Marketing Funnel, and Testing as a Reliable Data Source
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Interview with Richard Joe: On CRO for Growing Businesses, Understanding the Marketing Funnel, and Testing as a Reliable Data Source

01 July 2024 01 July 2024 ~ 8 min read 2699 views
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Claspo Blog Interview with Richard Joe: On CRO for Growing Businesses, Understanding the Marketing Funnel, and Testing as a Reliable Data Source

Conversion Rate Optimization (CRO) is a crucial yet often overlooked aspect of digital marketing and business strategy. Today, we interviewed Richard Joe, CEO of Kaizen CRO, a seasoned CRO expert, to answer your burning questions about this vital strategy.

In this interview, we will learn more about top strategies for developing highly converting websites, implementing CRO both for big and small businesses, understanding different tactics for different stages of the marketing funnel, and conducting reliable tests to gather good data.

Common Website Development and CRO Strategies

1. How should website development be strategized? What series of actions will ensure everything is done correctly?

Richard: You, first of all, should go back to first principles. Ask yourself, what are the key goals and KPIs to achieve those goals? These should align with the overall business goals. For instance, if it’s an ecommerce site, the key goals could be average order value, average purchase conversion rate, etc. Defining your goals and relevant KPIs is important in gaining clarity for how you structure your site.

Next, you should be able to define your audience using key personas representing your main target customers. You might also want to develop market research to gather more information on your audience's behavior patterns, needs, and pain points.

A good step to do is a competitive analysis of key competitors in your niche. This will help you to gain an understanding of industry standards and open up opportunities for differentiation. It’s helpful to record this information in a spreadsheet for benchmarking purposes. If you want to go deeper, it would be good to also do a SWOT analysis of your competitors and help you develop how you can differentiate yourself.

Wireframing and designing your site before it's built with user centred and conversion centred design is essential before you commit to development. Once developed, it’s ideal to measure and record your KPIs and go into a process of continual development (A/B testing) to improve it.

2. Is it worthwhile for marketers and small website owners with up to 5000 visitors to explore CRO? If so, what approaches should they consider first? 

Richard: Yes, even with low-traffic websites, we can explore CRO. Don’t be confused with equating CRO with just A/B testing. CRO is a process of improving conversions of a website methodically, with 80/20 of the work actually involved in research. A/B testing is the gold standard for testing a hypothesis, however, it does require a lot of traffic in order to achieve statistical significance.

For low-traffic websites, I would therefore prefer to focus on qualitative research such as user testing, which is a great way to gain insights from live customers in how they actually interact with your website. For example, in a moderated user test, you might ask for an ecommerce website, to get the customer to go through the actions of purchasing your product with dummy data. You’ll often be surprised by how users interact with your site and identify common issues and blockers. I would suggest 5 user tests max per desktop and mobile, as you’ll tend to get diminishing returns past that number.

Another useful qualitative form of research is user surveys or polls. Surveys are usually sent to customers post-purchase, and polls are simply pop-ups that appear and get triggered by user behavior. With surveys, you’ll typically get more in-depth responses, whereas, with polls, you’ll tend to get responses in response to a user action; say your user has added a product to the cart on an e-commerce site and then went to the checkout and was about to abandon, a pop-up may appear asking the user why they didn’t decide to make the purchase.

With surveys and pop-ups, it’s important to identify trends in responses and prioritize changes you can make on the site closer to the end of the funnel.

If you’re going to make several changes from qualitative information, it might be helpful to make the changes all at once, as you don’t have the benefit of being able to do an A/B test. This might not be perfect or exactly ‘scientific’ but sometimes it may need to be done if you feel you need to bring your site up to a good baseline. Remember, to monitor the changes over time and see if there was an uplift or not.

3. Name a common case when personalization uplifted conversion. 

Richard: A famous case study within e-commerce stores is Amazon’s use of personalized recommendations. This essentially shows the user potential cross-sell products based on the user's browsing history, past purchases, and items in their cart. They do this via dynamic on-site recommendations such as “Customers who bought this item also bought” and “Inspired by your browsing history” based on user behavior. 

Customized email marketing campaigns are also sent to customers based on shopping history and behavior.

Amazon has achieved much success with their personalization algorithm, with an estimated 35% of their total revenue generated through their system.

Mastering the Marketing Funnels

4. When trying to increase subscriptions, I face a conflict between prioritizing sales and capturing leads for the drip funnel. How can I identify visitors who might not make a purchase and redirect them to the drip funnel?

Richard: Finding a balance between focusing on direct sales and capturing leads for a drip funnel can be a fine balance to take.

A good thing to do is behavioral analysis. Identify customers who visit informational pages (e.g., FAQ, blogs, about us, etc.). Using targeted lead magnets on these pages can be useful in capturing leads who aren’t ready to purchase your product and require more information about your company and product before making the decision to make a purchase.

Dynamic pop-ups can be a useful thing to do based on user behavior. For example, if a visitor has spent a lot of time on the site but hasn’t added anything to their cart, a popup offering a free resource or newsletter subscription can be triggered.

5. Consider using multi-step funnels for better results in customer lifetime value (LTV). These funnels build trust gradually and help reduce defense mechanisms. Tactics such as trip-wire offers, lead magnets, and webinars can be effective, but testing them can be challenging and costly. What advice do you have for businesses on selecting strategic marketing funnels?

Richard: It’s imperative that you go back to first principles and define your website goals and KPIs to achieve them. 

Next, you should make an effort to understand your target audience. Develop detailed marketing personas based on demographic and user behavior.  Build out a customer journey map to identify touchpoints and where blockers occur.

Then you need to select the right funnel type for what your goal is. For top-of-funnel leads, it can be good for example to develop a lead magnet offer such as a free ebook which helps to position you as an authority in your space and capture potential leads in exchange for contact information.

You ultimately want to develop multistep funnels according to the different stages your leads will be in, all the way from awareness, consideration to conversion and retention stage.

6. Using multiple steps in a sales funnel can lead to better long-term customer value. Trust is built gradually, making it easier to overcome objections. This can be achieved through tactics like offering a free resource (lead magnet), hosting webinars, and other stages of the sales process. However, testing these approaches can be challenging and expensive. What advice would you give to businesses trying to select effective strategic marketing funnels? 

Richard: Define what your Customer Lifetime Value (LTV) is and the key metrics to achieve them.

Understand your audience at a deep level. Perform audience research and journey mapping.

Also, segment your audience according to behaviors and needs-based segmentations.

Then, choose the right funnel types and tactics. For example, lead magnets are good for high-value offers and webinars are good for educating your prospects for a product or service that is complex.

Practical Implementation of CRO

7. How do you build marketing offers so as not to cannibalize profitability?

Richard: Understand cost structure, from fixed and variable costs. Then do a breakeven analysis.

As mentioned before, know your audience and do segmentation to help direct marketing efforts

Create strategic offers such as product bundling which helps to increase AOV and cross selling which is suggesting complimentary products to your main one.

Utilise limited-time offers to stress the urgency of purchase.

Next, you want to measure your customer purchase history in order to tailor offers that resonate with their buying patterns.

8. How do you define the biggest leverage of improvement? What are the typical places to look for?

Richard: I’ve already mentioned clarifying what your objectives and key KPIs are, so won’t go further.

But I will say that it’s imperative to conduct high-quality quantitative data from Google Analytics and qualitative data from heatmaps, polls, etc. Don’t rush this part and jump to testing as newbies do. Spend most of your time on this. The better the research, the better the tests.

In general, you want to prioritize tests according to Impact vs. Effort:

  • High Impact, Low Effort: Identify improvements that can deliver significant results with minimal resources or changes.
  • Low Impact, High Effort: Evaluate whether certain improvements require extensive resources for potentially minimal gains.

9. Do companies need a CRO specialist dedicated to conducting regular A/B tests? How can they determine when it's time to implement a systematic approach to A/B testing?

Richard: This depends on several factors including the marketing maturity of the company as well as pragmatically if they have a high enough level of traffic.

In regard to marketing maturity, factors to include will be: are they pumping a lot of paid ads to the website and landing pages but want to improve website metrics to extract conversions? Are there enough financial resources to pay for an internal CRO? Do they have a developer who can also help implement winning tests, or can they hire a contractor? If they’re new to CRO, will they start with an in-house team or start with an internal CRO who will work with a CRO agency to do most of the leg work in development? All these questions need to be considered when hiring an internal CRO. 

However, it’s important to be realistic about what a CRO can do. As CRO is a team sport, it’s ideal that you work in a squad with a developer, designer, and analytics specialist. But when starting out, you will usually work with an agency to start off with due to resource constraints. It’s good long-term, though, to work towards developing an internal team as your experimentation maturity grows.

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