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How we doubled our conversions using the Google Web Optimizer
February 22nd, 2007 by sean
If there's one concept you learn this month that has the single greatest potential to improve the profitability of your site, the power of DIY multivariate analysis using the Web Optimizer is it. Let me explain.
What is Multivariate analysis and why should you care?
Multivariate analysis in the context of web sites is the science of changing elements on a page and studying the effect they have on your visitors' behavior. If you have a web site, presumably you already have a goal and your site facilitates a behavior from visitors that contributes towards achieving that goal. There is likely a desired outcome you're seeking on each visit - an action you want that person on the other side of the wire to take such as filling out a contact form or purchasing a product. This desired outcome is known as a conversion.
Improving your conversion ratio even one percent can lead to massive improvements in sales and profitability. This calculator is a simple way to run some what-if scenarios given your current order size, traffic and sales numbers. The easiest way to understand the benefit of improved conversion is to think about it as "miles per gallon" on a vehicle- think how much gas you would save if you doubled the fuel efficiency of your engine? But it's even better with web traffic. If your current cost per acquisition for a customer is $5 per customer given all your fixed design/development/hosting costs and marginal costs like advertising, converting twice as many visitors with zero additional cost can bring your cpa down to around a dollar. This has a dramatic effect on profitability of your operation - the effect on profitability is non-linear especially if you feed the savings back into targeted promotion.
How GWO works
So now that you understand the value of improving conversion, let's talk about how GWO specifically does it. Google Web Optimizer is javascript-based multivariate analysis tool that gives you the ability to test different versions of key pages on your site to determine the winning formula that produces the highest conversion. You set up experiments and GWO will dynamically serve different flavors of the same page randomly to different visitors and record the number of resulting conversions. The empirical data is then presented in a graph like the one below. Provided you have enough traffic to produce significant results, the tool reveals the winning combination along with the confidence level of the suggestion (ie. the statistical significance).
You can see that Graphic #4 outperformed the others and crushed the original graphic by almost double.
And the winner is…
So this is all nice in theory but let's take a look at a concrete example of how this helped us refine our messaging on the JumpBox site. A week ago I set up GWO on the JumpBox homepage and tested five different versions of the main graphic. Here's the five versions I tested:
Can you guess which one performed the best?
How we doubled our conversions using the Google Web Optimizer
February 22nd, 2007 by sean
If there's one concept you learn this month that has the single greatest potential to improve the profitability of your site, the power of DIY multivariate analysis using the Web Optimizer is it. Let me explain.
What is Multivariate analysis and why should you care?
Multivariate analysis in the context of web sites is the science of changing elements on a page and studying the effect they have on your visitors' behavior. If you have a web site, presumably you already have a goal and your site facilitates a behavior from visitors that contributes towards achieving that goal. There is likely a desired outcome you're seeking on each visit - an action you want that person on the other side of the wire to take such as filling out a contact form or purchasing a product. This desired outcome is known as a conversion.
Improving your conversion ratio even one percent can lead to massive improvements in sales and profitability. This calculator is a simple way to run some what-if scenarios given your current order size, traffic and sales numbers. The easiest way to understand the benefit of improved conversion is to think about it as "miles per gallon" on a vehicle- think how much gas you would save if you doubled the fuel efficiency of your engine? But it's even better with web traffic. If your current cost per acquisition for a customer is $5 per customer given all your fixed design/development/hosting costs and marginal costs like advertising, converting twice as many visitors with zero additional cost can bring your cpa down to around a dollar. This has a dramatic effect on profitability of your operation - the effect on profitability is non-linear especially if you feed the savings back into targeted promotion.
How GWO works
So now that you understand the value of improving conversion, let's talk about how GWO specifically does it. Google Web Optimizer is javascript-based multivariate analysis tool that gives you the ability to test different versions of key pages on your site to determine the winning formula that produces the highest conversion. You set up experiments and GWO will dynamically serve different flavors of the same page randomly to different visitors and record the number of resulting conversions. The empirical data is then presented in a graph like the one below. Provided you have enough traffic to produce significant results, the tool reveals the winning combination along with the confidence level of the suggestion (ie. the statistical significance).
You can see that Graphic #4 outperformed the others and crushed the original graphic by almost double.
And the winner is…
So this is all nice in theory but let's take a look at a concrete example of how this helped us refine our messaging on the JumpBox site. A week ago I set up GWO on the JumpBox homepage and tested five different versions of the main graphic. Here's the five versions I tested:
Can you guess which one performed the best?
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