Are UX and CRO the biggest opportunities in Performance Digital Marketing?
By Sergio Borzillo, Solutions Director, Reprise
There is a great deal of debate around how digital marketers can make best use of the tools at their disposal to optimise performance. From a purely statistical perspective, the more traffic we drive to a website, the more chance there is to boost sales. Some will argue that volume is not the only metric of success, and that traffic quality can significantly influence performance. Therefore, an increased budget, invested to attract quality users, can appear to be the key to unlocking those extra sales.
However, in a world where the cost of media is continuously on the rise and consumers grow ever more impatient and less loyal, are increased budget and traffic the only means for advertisers to improve sales? Is there something else they should be looking into?
If we considered Sales Volume the only KPI, the answer would be yes. In fact, statistically, the more you invest, the more traffic and sales you generate. However, no business will set aside profitability as a KPI, so the scenario grows ever more complex. Advertising costs have shrunk profit margins to the point that it takes very little for a campaign to fall into the unprofitability trap.
There is a saturation point in Direct Response campaigns, beyond which conversions become less profitable with the more traffic generated. If only applying channel best practices alongside increasing budgets and traffic, a campaign is inherently limited.
Marketers therefore face two key dilemmas:
- If you increase the budget to generate more traffic, your bottom line numbers will be affected by the activities undertaken to bring in unprofitable sales.
- If you keep the status quo, with the rising cost of media and increasing online competition, this will have a long-term effect on your bottom line, number of sales and market share.
So, what do we do then? How can a brand grow without affecting that bottom line profitability KPI?
Let us change perspective for a moment. If you think of digital campaigns as a system of pipes, and of the volume of customers that reach your site and convert as the water within these pipes, you will probably see that at the end of the pipe you have only collected 1%-2% of that water, wasting the remaining 99%-98%.
These numbers will vary from industry to industry and from brand to brand. However, even with the most sophisticated digital channel mix and the most advanced best practices applied; the percentage of wasted traffic will still offset the percentage of conversions.
This is where – instead of focusing on keeping that CR constant at or around 2% – marketers should pay more attention to the 98%, as therein lies an incredible opportunity. In fact, a marginal improvement in CR can have a significant impact on your bottom line numbers.
So, what happens if we improve the User Experience (UX)? A basic lesson we need to keep in mind is that customers want a solution to their problems. They do not mind where they find it, they just want to find it, and as quickly as possible. Therefore, a smooth user journey – aimed at providing answers fast, whilst taking into account the signals the user gives once landed on your site – will not just help converting more visits into sales, but also increase the AOV of a percentage of those users.
If you are an advertiser selling mobile phones, for instance, a better user experience will lead to more mobile sales. However, if you take this a step further, and make it easier for them to also purchase relevant accessories, you will not just increase the number of mobiles sold, but also generate extra sales that will further increase your revenue.
To put it into simple numbers: the number of clicks being equal, a seemingly marginal increase in CR, and a boost in AOV as a consequence of an optimised user journey, can have a significant impact on the bottom line.
A better User Experience will allow you to unlock more areas of efficiency, and shift the profitability curve forward. By giving brands focused on market share and growth the opportunity to invest more, traffic will increase and conversions will remain within their ROI/COS targets. On the other hand, those who are more concerned with increasing their margins will be given the opportunity to invest these gains in other areas of the business.
In a nutshell, to increase revenue and volumes without impacting ROI, brands must master two key areas:
- Generate Relevant Traffic: bring traffic to the site and apply best practices to ensure relevancy and quality until the optimum profitability point is reached
- Optimise User Experience: make the most of the current traffic volume by offering the best possible user experience. This will in turn increase ROI, and create room for pushing spend and traffic without under-delivering on COS and ROI
Can these be addressed separately? No, marketers can no longer split the two. They must go hand in hand. In fact, if you focus solely on generating traffic, there will be a point beyond which it will become unprofitable. On the other hand, if you were to concentrate only on the UX, without feeding the top of the funnel, your sales volume and market share will suffer in the long term, despite a gain in short term performance.
The trick therefore lies in addressing both simultaneously, and relying on effective data analysis and audience segmentation to enhance the 1-to-1 relationship with your customers.
What is preventing brands from prioritising UX & CRO?
UX has definitely gained momentum over the past 3-4 years, and is now important enough that it pulls other priorities around it.
However, brands are still finding it challenging to naturally blend this element into their day-to-day operational and strategic agenda, due in part to certain challenges faced especially by larger and more traditional brands. These include:
The recipe of a successful UX includes:
- Strategy – An optimal UX requires an integrated plan, with a long-term view set out from its conception, and operational support carried through for the future of your customer.
- Tech – Marketers must have the tools to make the best use of the data they have access to. This means using data to create personalised, compelling and real-time experiences that are customer-specific.
- Teamwork – Close collaborative work across a business benefits everyone’s work. There need to be tools in place that allow for streamlined workflow between creative and content marketers / web teams, so that the company works cohesively at its full potential.
- Design – Design is a fundamental aspect of UX, and goes far beyond simple site aesthetics. User journeys must be well designed in order to communicate in the most efficient way with your customers and facilitate them with their purchase. If there is an interruption in this journey, users will drop off, affecting growth and profits.
- Culture– Company culture is central to user experience. Businesses should take a cross-team approach, ensuring the best talents in the business work together to improve UX, whilst keeping the customer at the core of all activities.
- Data– To create a successful UX a brand needs to know its customers. This means having the possibility to access customer data and the ability to properly segment it, so that the experience can be tailored to the audience.
- Skills– The best UX requires that digital marketing skills be applied in combination with optimised analytics and technology, to maximise the effectiveness of both areas.
- Action Plan – Planning is of vital importance, but is rendered useless without an effective structure in place to see it through. Companies must have the right processes, tools and talents to ensure strategy is implemented correctly, from the outset and throughout.
However, this is not a one-off process. Datasets need to be collected, manipulated and filtered on an ongoing basis to be able to fuel key strategic insights to the business. Marketers need to prioritise data-driven marketing because of the user experience and not as an alternative to it.
How can brands benefit from developing the right UX & CRO Strategy?
When talking about UX, we have to go beyond the boundaries of our ‘Owned Media’ and instead be aware that the experience of our users’ needs to be enhanced from the moment the user recognises a need (offsite) to the moment they reach your site (onsite).
The successful blend of Offsite and Onsite UX will lead to:
- Positive feelings towards the brand, which will enhance consumer confidence
- Stronger brand recall when the need arises again, placing your brand at the forefront of consumers’ minds
- Boost in Customer Loyalty, increasing the likelihood that your brand will be the preferred option for consumers
- Higher CTR and CR, meaning more traffic is driven to your site, leading to increased Sales and greater ROI
What are your top priorities to successfully address UX?
- More agile approach to integrating and testing new technologies, to position your brand at the forefront of the industry
- Less rigid organisational structures company-wide, to in turn streamline the customer experience. Collaboration across teams should be encouraged, with the ultimate aim of optimising the customer journey across multiple touchpoints
- People are mobile, and brands should be too. It is important to meet the customer where they are
- Creating compelling content for digital experiences, as even the best-planned strategy will fail without the creative to back it up
- Data-driven marketing that focuses on the individual: UX should be made as personalised and relevant to the individual customer as possible
Digital marketers have to work increasingly hard to distinguish themselves in a cluttered and constantly changing environment. It is more important than ever to convert customers to your particular business model, but to do so is challenging, when every company judges its success based on the same merits. UX and CRO are two of the most overlooked activities in this journey, but they are also the most fundamental. Focus your efforts on improving user experience from all angles, whilst maintaining a commitment to existing KPIs, and your company and your customers will feel the benefit.