Showing posts with label optimization. Show all posts
Showing posts with label optimization. Show all posts

Tuesday, January 09, 2018

The Curious Case of Ecommerce Buttons: A Best Practices Guide

Ideally, all aspects of your ecommerce experience drive shoppers towards a conversion. Depending on your business and the point in the sales funnel your prospect is, your conversion goal could be to get individuals to enter contact information, finalize a sale or share a promotion.
Whatever your goal is, the final hurdle to get a conversion is getting a user to hit a button to actually take some sort of action. And when it comes to helping nudge your customers to finally click that button, I’ve put together a few best practices to follow.

Find the Right Call-To-Action

Your call-to-action needs to clearly state the action that customers are about to take. Use unambiguous, active language on and around your button that reinforces the value to expect. If you leave anything open to interpretation or use words that imply extra work or more commitment on the part of the shopper, they’ll have more hesitation and are less likely to convert.
So, do use words like “see”, “give”, “get” or “reserve” as they demonstrate momentum and will encourage individuals to continue. A study from HubSpot showed that from a list of action words, “Click here” and “Go” actually had the highest conversion rates. Alternatively, words that can have the opposite effect include “download”, “submit” or “register.”
Additionally, shifting from second person to first person can also have a considerable effect. A study by Michael Aagaard, Unbounce’s Senior Conversion Optimizer, demonstrated how changing a call-to-action button from “Get your free template” to “Get my free template” resulted in a 90% increase in conversions.

Colors Matter

With online shopping being so visual, it makes sense that color can have a huge impact on conversions. For starters, certain colors can have drastically different connotations from country to country. For example, while yellow signifies jealously in France, it can mean bravery or wealth in Japan. Purple is considered a color of mourning in Thailand, while the Western cultures tend to view it as a symbol of royalty. So, it’s important to pick colors that carries positive sentiments, keeping in mind that you may have to use different colors for different countries. It’s also important to keep colors consistent in your ecommerce experience and on brand.
Unfortunately, there is no one-size-fits-all when it comes to button color. Every customer segment is different so experiment to see which colors create the highest conversion rates for your business. As UX Dilemma points out, the best way to bypass the different associations that can occur with each color and each culture is to emphasize the button with a color that contrasts the other colors on your page.
color-wheel
Image source: Bright Hub

Pay Attention to Your Fonts and Button Shape

In addition to being a contrasting color to the rest of your page, UserTesting Blog says that buy buttons should appear large enough on your page so that customers can easily pick it out, but not so large that it appears obnoxious on the webpage.
You also need to avoid hard-to-read fonts and all-caps. The lack of letter variation in all-caps actually makes reading it more difficult. Follow these simple guidelines of formatting a call-to-action button by using a rectangle shape, having clear boundaries and borders and using white space around the buy button. Vitally, make sure all of your spelling and grammar is correct! These can cause a great deal of hesitation in shoppers and cause them to not hit that button.

Create Urgency

Creating a sense of urgency can have a huge impact on the effectiveness of your ecommerce buttons. One case studyfound that creating a sense of urgency helped increase sales by 332%.
There are lots of ways to create a sense of urgency including limited-time discounts, communicating that only a limited amount of stock is available or adding countdown clocks to the end of a sale. Use words such as “now” and “today” to reinforce this sense of urgency.

Find What Works for Your Ecommerce Store

There’s obviously a lot more that goes into optimizing your checkout than just the button. But it is the final barrier, so you need to do everything you can to eliminate any risk of hesitation. Be mindful of the particular needs and desires of your target market to help your buttons convert. And be prepared to test different combinations to see what works best for your ecommerce business.

Friday, June 19, 2015

Optimizing Prices with the Price Sensitivity Meter


Whether you’re launching a new product or optimizing the price of an existing one, the Price Sensitivity Meter (PSM) is a great way to get feedback on price ranges. From its relatively low cost to its ease to administer, this particular method of price research has several advantages over alternatives when you’re faced with the challenge of finding the best price.

How It Works5

The Price Sensitivity Meter uses open-ended survey questions to predict the sensitivity of customers to different price points. A description and/or visual of the product is displayed and four questions are posed about what the responder thinks is too expensive; too cheap; a bargain; or a little high but still worth considering. For products where prospective customers may not have any experience, it can sometimes be prudent to include a scale of prices to ensure respondents have a general idea of the price landscape.

The Value of the Price Sensitivity Meter

Unlike other methods, the open-ended questions used by the Price Sensitivity Meter allow for more
variation and detailed answers. The results capture the range of prices your sample considers
acceptable and the data you collect can be graphed for easier visualization.

The optimal price is usually considered the point at which the number of respondents who believe the
product is too cheap is equal to the number that say it’s too expensive. That’s not to say that you must
choose that particular price point. You can still remain competitive by choosing a price point within
the competitive range determined on your graph.

The range of competitive prices is determined at the low end by the intersection of the “too cheap” and “expensive” curves and at the high end by the intersection of the “bargain” and “too expensive” curves. From within that range of prices, you should be able to determine a price point that will be effective with your target market. However, keep in mind that the Price Sensitivity Meter is just a tool and you can only know definitively if your pricing is right by testing with real customers.
graph

Why Knowing Price Sensitivity is Important

People tend to consider three main things when they are shopping: price, quality and value. It’s important to recognize the value-perception of your product because your price needs to mirror it to successfully attract customers. Therefore, when users see a higher price, they will automatically look for more value from your product and brand and visa versa.

However, there are some that say the Price Sensitivity Meter is too simple to effectively help with pricing products. They claim the methodology is questionable and open-ended answers by respondents may produce unreliable results with some potential customers saying a lower price than what they are actually willing to pay.

With that said, the Price Sensitivity Meter can be a useful starting point for further analysis and shouldn’t be done in isolation of other research. The real value this technique provides is providing a range of the perceived value of your product without having to guess or rely simply on competitor pricing. Your product and brand are unique and you need a price that matches your perceived value amongst your users. Failing to do that can result in you losing out on significant revenue.


Tuesday, June 16, 2015

Finding the Right Price Through Price Laddering


With a 1% improvement in price optimization boosting operating profits by an average of 11%, it’s clear that finding the right price for your Software-as-a-Service product is critical for success.

But to avoid under or overpricing your service, you need to know how customers perceive its value. Many firms struggle with how to figure this out and simply mimic the prices of their competitors. But if you simple copy what your competitors are doing, you risk losing out on significant revenue for your unique service.

While the best way to arrive at an optimal price is continual testing with real customers, price laddering offers a way for companies to research what their price point(s) should be in order to maximize revenue.

Price Laddering

Products or services are worth as much as customers value and are willing to pay for them. Accordingly, price laddering involves asking potential customers about their likelihood of buying a product or service at one or more price points.

To start, respondents are given a single product or service and asked to state their likelihood of purchasing it at a specific price on a 10-point scale with 10 being extremely likely. For those who respond with a likelihood that is less than desired (usually 7 or lower), users are asked to reconsider their likelihood of purchasing as a lower price. Typically, no more than three price points are used in a single test. The results can then be used to calculate the ‘take rate’ for each price point tested.

Traditionally when testing different price points, companies needed to coordinate costly focus groups and repeat the price sensitivity experiment for every price point. But by exposing respondents to a single concept at more than one price, businesses can take advantage of the fewer resources price laddering requires and reiterate testing throughout the product’s lifecycle.

Implementing a Price Ladder

When conducting a price laddering test, you need to ensure that a price point is chosen, above and below which respondents will be tested, and that the prices (or rungs of the ladder) are spaced relatively equally.

As an example, a company may want to test $79.95 a month for their subscription service. In this case, they could begin testing at a price of $99.95. Respondents whose intention of purchasing is less than 7 would then be re-tested with a price of $79.95. For those that still answer less than 7, they would be presented with a price of $59.95.

If 20% of all those surveyed indicate they would be likely to subscribe for the plan at $99.95 a month, the remaining 80 recipients would then be retested at the next lowest price. If 10% of that group showed intent to purchase of 7 or over, the take rate for the price point of $79.95 would be the total take rate of both rungs, which in this case would be 28%. This is based on the assumption that, given a customer’s likelihood to buy a product at one price, their intention to purchase will most likely remain the same with lower price points.

Complexity arises when different market segments are attracted to different features, which often results in a tiered pricing structure. However, even with multi-tiered pricing structures, companies can better know their product’s value by using price laddering.

Don’t Use Price Laddering in a Silo

Price laddering is a great tool to ensure your product’s price roughly aligns with its perceived value to prospective customers. However, keep in mind that you can only be sure of what prices work best by actually testing with real customers. Accordingly, price laddering should be used in conjunction with all the data you have available when making decisions about your service’s price, especially your real sales data.


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