Lesson #330: The Importance of Conversion Rate Optimization

Getting new customers to your website is hard enough, having to block and tackle up against all your competitors' advertising on Google, Facebook and elsewhere.  But, that is only half of the challenge.  The other half--the more important half--is getting those site visitors to convert into a lead or a sale.  And, that process of maximizing conversions is known as Conversion Rate Optimization, or CRO for short.  This post will help educate you on what CRO is, how to do it and why this matters to your bottom line . . . big time!!

What is CRO?

At the simplest level, CRO is optimizing the ratio of conversions, however you want to define them (e.g., transactions on your website, email lead form submissions, phone calls) as a percentage of the total visitors going to your website.  So, as an example, an average ecommerce website may have a conversion rate of 3%, when looking at the ratio of online transactions to website visitors.  But, there are wide ranges in conversion rates; a brand new startup with no brand recognition may only convert 1% and a huge trusted ecommerce portal like Amazon may convert 8%.  Said another way, there is an 8x difference in revenues to be had, whether you are at the low end of the range, or the high end of the range.  So, CRO is a critical part of maximizing your revenues, and needs more focus than most startups give it.

How is CRO Optimized?

First, you are optimizing for every variation of your user experience across devices.  There is not a one size fits all solution.  Optimizing for desktops, tablets and mobile devices are completely different.  And, more often than not, in today's world, mobile is the most important experience that needs to be optimized, given it represents the majority of inbound traffic for most companies these days (although many designers are still overly focused on desktop design).

Second, you are optimizing your user experience (UX).  That includes things like your site's usability, navigation, page design, process design, email form design and overall site speed (and speed really matters for Google to get higher up their search results).  This is changing things like page headlines, copy, voice, creatives, offers, calls to action, colors, sizes, messaging, etc., constantly A/B testing different variations of each, to see which one helps drive conversions the most.

As you study users playing with your website, you are going to learn where the drop-off points are in the conversion funnel.  How many site visitors, lead to product searches, lead to shopping cart additions, lead to starting the checkout process, lead to a completed sale.  Every step of that process needs to be optimized, from beginning to end.

Third, another part of CRO is seeing how your marketing efforts impact conversions.  Do any marketing channels work better or worse?  Any variations by customer demographics?  Do variations in landing pages from the ads, have an impact on conversion rates?  Do certain products convert better than others?  So, this is not only about optimizing the UX of your site, it is working in partnership with the marketing department to optimize what they are doing, to help maximize conversions.

How is CRO Measured?

There are many ways to study your UX, to learn how consumers are engaging with your site.  You can survey customers to learn what they like and don't like about your UX.  You can A/B test different variations of your page design, to see which version performed better.  You can study your Google Analytics data, and they have ecommerce funnel optimization tools, to learn where the drop-offs are happening.  There are many technologies that can help you learn here--things like heat mapping where a user's eyes are focused on the page, recording user web sessions, doing scroll bar mapping or using other software that can help you study your customer journey on your website (e.g., Content Square, Crazy Egg, Hello Bar).

Who Can Help Me With CRO?

And, if you don't have an internal UX team or enough time to do this yourself, there are many agencies that can help you audit your CRO and make specific optimization suggestions for as little as $5,000.  There are dozens of agencies that can help you here, but I know agencies like The Good, Mirgo Digital, Underwater Pistol, Thrive Digital, 1 Digital Agency and Boostability have expertise as CRO focused agencies.

Closing Thoughts?

Too often an entrepreneur is focused on getting a minimum viable product into the market as quickly and cheaply as possible, which is the norm for most lean startup launches.  But, your website experience is a key part of maximizing revenues, and it needs professional attention, sooner than later. 

Imagine you were shopping in a retail mall, and you walked by a store where the front door was half closed, the light bulbs were off and you couldn't walk through the aisles of the store without bumping into the racks of merchandise or other shoppers.  You would simply leave and move on to the next store that gave you a better experience.  It is that same logic online, with the hundreds of competitors trying get those same customers to visit their websites. 

So, with a little bit of effort here, you can materially increases your revenues and profits by expanding your conversion rates--the only metric that really matters at the end of the day.


For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #329: Leverage Market Downturns as Investment Opportunities

Chaos followed for most businesses in the wake of the Coronavirus:  the stock markets crashed, product demand fell and unexpected losses started to build up.  Most businesses did everything they could to batten down the hatches to help them best weather the storm, including stopping all discretionary investments.  But, should they have?  Most great investors, like Warren Buffett, have been quoted as saying their highest return investments were made during the middle of economic downturns.  So, theoretically, your highest return investments could be made right now, during the peak of the negative economic impact coming out of COVID-19.  So, instead of retreating right now, you may be best served long term by accelerating your long term investment efforts, if you have the capital to do so.  Allow me to explain.

Your Vendors Are Typically More Flexible During Downturns

You are not the only one whose business may be suffering from lower demand right now; most businesses are suffering from lower demand during downturns.  Which means they too are struggling to generate revenues.  And, when that happens, that is when they start to discount their prices, to try and drum up more demand and revenues.  So, if you were normally going to spend $1MM on things for your business, you could now be able to buy those exact same items for $800,000, as an example.  That is like adding $200,000 to your bottom line!!

There is Typically an Over-Supply of Good Talent During Downturns

In the last couple months, over 40 million people have lost their jobs in the wake of Coronavirus.  Most of them are really talented people that just happened to be in the wrong place at the wrong time.  Which is great for you!  These people are now looking for new jobs, and there is an undersupply of job openings.  Which means a couple things for you: (i) you should have the “pick of the litter” of resumes to choose from; and (ii) those candidates may be able to work for lower salaries than they would normally have worked, because they need a job.  So, your chance to “land the whale” in terms of great people at a great price will never be better than right now.

There is Typically Less Competition During Downturns

Many undercapitalized companies will not be able to survive an economic downturn.  Which means, instead of competing against 10 major competitors, you may only now be competing against 7 major competitors.  That 30% of revenues is now up for grabs, between you and your other surviving businesses.  If you get an equal share of that, your revenues will rise 30%.  If you aggressively market your business to taken an even bigger share of that, you could position your business to quadruple your revenues, taking the accounts of four companies instead of your one company.

Advertising Costs are Typically More Affordable During Downturns

The combination of companies going out of business and companies cutting their marketing efforts during downturns means, you should be able to see materially better returns on your marketing spend during downturns.  I know that is true for my Restaurant Furniture Plus portfolio company; that business has seen its cost of acquiring a new customer cut in half in the wake of Coronavirus.  Which means on the same marketing spend, I should be able to convert twice as many customers!

M&A Targets Are Typically More Affordable During Downturns

The same “bargains” can be had in the mergers and acquisitions world, so this would be a great time to try and roll-up a bunch of your competitors at lower than normal valuations.  As an example, let’s say a business that used to be generating $2MM of cash flow would have been valued at 6x cash flow for $12,000,000.  But, today, they are only doing $1MM of cash flow, and that business may only be worth 4x cash flow, or $4,000,000.  That is like buying a business at a 67% discount, when you know the demand and profits should return to historical levels as soon as the market conditions recover.  So, now could be the best time to try and find businesses to acquire to scale your business long term, at low valuations today.

Concluding Thoughts

As you can see, there are a lot of potential reasons you should be accelerating your business investment efforts right now, not reducing them.  Hopefully, you have some capital set aside to make these investments a reality.  But, if you don’t, this could be a good time to raise some capital, with a clear pitch to your investors that this is the perfect time to be “buying low” and “selling high” at a later time down the road, after the markets improve.  A smart investor should understand this concept of turning “lemons” handed to you by the market conditions into “lemonade”!!


For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #328: Creating a Symbiotic CEO and CFO Partnership

One of the most important drivers of a successful management team is the relationship between the CEO and the CFO.  The CEO is often times the headstrong, overly optimistic driver of the business; and the CFO is often the more mild-mannered, ultra-conservative controller of the company’s purse strings.  Too much of one, and the business will race off a cliff, and too much of the other, and the business will suffocate.  This post will teach you how to create that perfect harmony in the relationship between your CEO and CFO.

What Businesses Need

I think most of us would agree, most businesses are looking to grow their revenues at a pace that won’t result in the company running out of cash.  Typically, your CEO is focused on the first half of that mandate (growing revenues), and your CFO is focused on the second half of that mandate (not running out of cash).  If “growth at all costs” CEOs surrounds themselves with people just like they are, there is nobody on the team to “keep them in check”.  And, vice versa, if “cash pinching” CFOs surround themselves with people just like they are, there is nobody to help them “see the forest, through the trees”, propelling the business to new heights through some smart bets.  The right blend of business need, is somewhere right in between.

Your Typical CEO

Having been a CEO of multiple businesses, I can pretty much describe myself.  I am the perpetual optimistic—the glass is always “half full”.  I make most of my strategic business decisions on what will maximize revenues and profits five years from now, not what will maximize profits today.  I prefer to lead, than to be lead, and don’t like it when someone tells me why we can’t do something I want to do.  I have an A-type personally, and like to be around similar extroverts with bubbly personalities. 

Your Typical CFO

Having worked with many CFOs of multiple businesses, they can pretty stereotypically be described as follows.  They are chronic worriers—the glass is always “half empty”.  They make most of their day-to-day decisions based on what will spend the least amount of cash today.  They too like to lead, and have their voices heard, which can often be in diametrically opposite directions to where a CEO may be headed.  And, many have B-type personalities, often as introverted executives that function best from “behind the scenes”.

The Friction Created

Do you see the problem here, as described above?  CEOs and CFOs are often very different types of people, both in their demeanor and in terms of the ways they think and measure success.  The CEO-CFO relationship can often be a tug-of-war, and if not managed well, can lead to lots of internal friction and arguments between the two. 

But, that doesn’t need to be a bad thing.  On the contrary, it could be a very good thing, as both of them are working with the company’s best interests in mind—the CEO for the long term and the CFO for the short term.  The CEO and CFO should just acknowledge their differences upfront, know they are never going to get their way 100% of the time, and create reasonable boundaries for each other to “flex their muscles”, depending on the topic.

How to Create Harmony

To me, the right CEO-CFO relationship begins with recruiting the right people to start.  Speaking as a CEO, just know going in that you need to recruit a CFO that is going to protect the business first, and not “follow you off the cliff” on every one of your growth desires.  It is more important you find someone that has a good balance of short-term and long-term in the way they think, and will support your growth decisions if they are: (1) data-driven and logical; (2) will not create unnecessary strain on the company’s cash flow in the immediate term; and (3) can easily be funded by investors, if any startup investments are required to fund any expected deficits.   And, on the flipside, the CEO should support the CFO’s cost cutting decisions if they are: (1) data-driven and logical (sound familiar); (2) will not materially impede the company’s long term growth goals; and (3) if not following that decision, will potentially put the company out of business.  It is all about getting that right balance between the Yin (CEO) and the Yang (CFO).

Having Mutual Respect

In all cases, the CEO and CFO must respect the roles they each play in the business.  Don’t get upset if your desired actions are getting overturned by the other, but at the same time, don’t expect your desired actions to get overturned every time.  The right CEO-CFO balance is when they are both 50% happy, 100% of the time.  If either one is happy 100% of the time, you either aren’t pushing the business hard enough, or you are about to implode, one way or the other.

Closing Thoughts

So, as you can see, the CEO and CFO both play very critical roles in shaping the future direction of the company, and creating the right balance between the two, is often the right recipe for success.  You may not build as large of a company as you could have, but at the same time, you can rest assured you will never go out of business and will always be able to “live to fight another day”, in both good times and in bad.  Now, if you are a CEO or CFO, get up from your chairs, walk to the desk of your fellow executive, hug and make up, and pat them on the back for a job well done (despite what you may have thought about them before reading this article).


For future posts, please follow me on Twitter at: @georgedeeb.

5 Ways to Leverage Market Downturns as Opportunities to Make More Money

Chaos followed for most businesses in the wake of the coronavirus pandemic: the stock markets crashed, product demand fell and unexpected losses started to build up. Most businesses did everything they could to batten down the hatches to help them best weather the storm, including stopping all discretionary investments. But, should they have?

Most great investors, like Warren Buffett, have been quoted as saying their highest return investments were made in the middle of economic downturns. So, theoretically, your highest return investments could be made right now, during the peak of the negative economic impact coming out of Covid-19. So, instead of retreating right now, you may be best served long term by accelerating your long term investment efforts, if you have the capital to do so. Allow me to explain.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] George Deeb Discusses How COVID-19 Impacted Small Business (on ASBN)

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how COVID-19 is impacting small businesses.  I thought this video turned out great, and I wanted to share it with all of you, to help you see how your business is stacking up in comparison.  I hope you like!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #327: All Search Engine Traffic is Not Created Equal

It is really easy for a newcomer to the world of search engine marketing to assume that the search engines (e.g., Google, Microsoft) are all the same and the clicks therefrom all behave in the same ways.  In the words of Lee Corso, the ESPN analyst on College Game Day . . . “not so fast my friends”!!  In this post, we are going to learn the differences between Google and Microsoft, their search engines and shopping engines, mobile vs. desktop, and much more, to help you better optimize your efforts here.  As you are going to read, there are probably of lot of things you are doing today, that you shouldn’t be.  And, vice versa, a lot of things you are not doing today, that you should be.

Google vs. Microsoft

Well, first of all, the biggest difference between Google and Microsoft is reach:  Google is materially larger than Microsoft (which includes Bing, Yahoo and AOL traffic in their network).  According to Statista, that difference is around 63% market share for Google and 25% market share for Microsoft in the United States, so Google is around 2.5x the size.  You would think that suggests you should focus your efforts on Google first, to get in front of more users, right?  Perhaps, but everyone else is also thinking that.  There actually is less competition on Microsoft, and you may be able to acquire the same amount clicks at a materially lower cost per click and improve your ROI in the process.

And, there is a material difference in demographics between the two networks.  Google tends to attract younger, more college educated, higher income, and a generally more tech savvy audience.  And Microsoft tends to attract an older, less educated, and less income audience, more likely to have kids.  Maybe that doesn’t matter for your business, depending on your product offering (e.g., either audience watches movies).  But, maybe that demographic difference could be a material issue for you (e.g., selling a product targeting older Baby Boomers may perform better on Microsoft).

There is also a material difference if you are trying to attract users from outside of the United States.  Google’s international reach is materially bigger than Microsoft’s, in case you are targeting international customers, as well as U.S. based customers.

Search vs. Shopping

Just so we are clear, search ads are the sponsored listings that appear at the top of search engine results when you enter in a keyword (mostly textual based links).  Shopping ads are the product listings that appear in the “shopping” sections of those same search engines (e.g,. mostly visual product images), typically loaded to the search engines with a direct feed of your products from your website with feed management tools like Feedonomics or DataFeedWatch.  If you are in ecommerce business selling products, the natural instinct is to be advertising in both sections:  get your link to “chairs” in the search results and get your image of specific chair SKUs you sell into the shopping results.  

That may work fine for you, or it may not, as we learned with our Restaurant Furniture Plus business.  What we learned is the shopping section was mostly attracting consumers, not commercial buyers.  So, we found there was a material difference in our average order size between the two sections, let’s say $500 from shopping and $5,000 from search.  And, based on the differences in cost of customer acquisition, let’s say $100 from shopping and $200 from search, it was materially easier for us to maximize our revenues, profitability and return on ad spend by focusing on search, and not struggle to simply break even on our shopping spend.  The right answer here for any one business, will be different depending on your focus.  Figure out what is best for your business.  

B2C vs. B2B

Related to this search vs. shopping topic, are the implications for B2C vs. B2B facing businesses.  Continuing with our Restaurant Furniture Plus example, let’s say we were advertising for “chairs”.  Yes, chairs are needed for restaurants.  But, they are also needed by consumers in their homes.  When we were simply advertising “chairs”, we were up against a lot of big consumer brands selling chairs (e.g., Pier 1, Pottery Barn, Wayfair) trying to tap into those same “chairs” keywords.  And, those big brands have a lot more marketing muscle and repeat buying potential, as those consumers will most likely buy other products for their homes over time.  Which means the big brands were willing to pay a lot more for those leads, than we were.  It wasn’t until we shut off our shopping feed, and changed all our generic “chairs” keywords to more specific “restaurant chairs”, “commercial chairs”, “foodservice chairs”, that we started to truly optimize for our B2B needs.  Somebody really needs to build the “B2B Only Search Engine”, as you typically can’t get that level of keyword targeting out of the current search engine tools.

Desktop vs. Mobile

When I first started digital marketing back in 2000, there was no such thing as a smart phone.  So, all the traffic was coming from desktop PCs.  But, over the last 20 years, and thanks to the innovations of Apple, Android, Samsung and others, for many companies, searches from mobile phones has actually surpassed searches from desktop PCs.  The problem with that: most businesses have optimized their user experience for desktop, not mobile.  And, the search engine algorithms actually produce search results differently, depending on the perceived user experience and site speed of those different desktop vs. mobile channels.

For example, check out this Google tool that lets you check your site speed on desktop vs. mobile.  If Google thinks your mobile site (compared to your desktop site) is too slow and you are giving a poor mobile user experience, it will not publish your mobile advertising in the same frequency it is pushing your desktop advertising, or the same frequency of your competitors’ advertising or search engine optimization rankings who are better optimized for mobile.  You really need to be living in a “mobile first” way of thinking today, to get the lion’s share of the searches coming your way.

Text (Prospecting) vs. Display (Retargeting)

In addition to the text ads you buy in the search engines, they also let you buy display ads, which publish to those same retargeted users that are visiting other websites that are within those same advertising networks.  There are several differences here:  what you can say and show in a few lines of text, is very different from what you can say and show in a beautiful image.  Not to mention, that image is now being displayed to a user that has already seen your brand once, so they will be much more likely to engage with that second impression image ad, than they were to engage with that first impression text ad.  So, if you are going to run a search campaign, you are leaving a lot of potential success off the table if you are not concurrently running the display retargeting ads.

With Reviews vs. Without

Over the years, Google has added a lot of emphasis on social media data, in dictating how it publishes ads and how it ranks sites for organic traffic.  One of the biggest drivers of that is customer reviews data.  But, the reviews have to come from their list of trusted reviews vendors to give the review credibility, and ensure that you simply didn’t make it up.

The benefit of working with one of these trusted third party reviews vendors is, if you have over 100 reviews, Google will add those reviews (e.g., your summary five star score), next to each of your paid search ads and your organic search result links.  Which does two things: (i) it gives you higher credibility vs. other links on the page, increasing the odds the customer clicks on your links; and (ii) more importantly, it can decrease your cost of customer acquisition by as much as 15%, on average, with a higher likelihood of converting into sales.  So, make sure you have a good customer reviews strategy that will make the search engines more likely to promote you to truly optimize your ROI.

General vs. Custom Audiences

To date, you mostly had to rely on the search engines to identify the audience targeted, and hope they got it right.  In the newest iterations of search marketing, the searches engines are giving you more input on who is being targeted.  For example, if you are a “whitelisted” email marketer, you can give them your list of email targets, they will match it to their users, and target advertising only to those users.  This is great if you are targeting old customer email accounts, or a list of prospects’ emails you have created.  Or, as another example, you can give them a list of competitor or industry websites where your likely customers are looking, and they will target advertising to any users that visit those sites.  That is pretty awesome!!  This is the first thing I have seen, other than customizing keywords from “chairs” to “restaurant chairs”, that will help B2B marketers go after really targeted traffic for their business.  So, be sure to set up your custom audiences in your campaigns.

Closing Thoughts

So, as you can see, a lot has changed in the world of search marketing since I first wrote about it in 2011.  And, I am guessing there will continue to be many more changes to come in the years ahead.   So, please don’t set up your campaigns once and forget about them.  You constantly need to be relearning the new best practices and resetting your campaigns to truly have a maximum return on your search engine marketing investment.

For future posts, please follow me on Twitter: @georgedeeb.