Category Archives: Strategy

Why are the habits of successful people a myth?

What is a narrative fallacy?

Have you noticed social media’s obsession with the habits of successful people, how politicians suggest simple solutions to complex problems and the appeal of magical ‘silver bullet’ fixes? People like to simplify things as we have a natural desire to understand what causes events and we hate uncertainty. In the book The Black Swan, Nassim Taleb describes how people can’t help but create narratives that do not exist, particularly when those stories confirm our existing beliefs.

Nassim Taleb coined the term narrative fallacy to describe; “our limited ability to look at sequences of facts without weaving an explanation into them, or equivalently, forcing a logical link, an arrow of relationship upon them.” We can see this all the time as people create stories to explain random and unpredictable events as this makes us feel smarter and more in control of our destiny.

“Once your mind is inhabited with a certain view of the world, you will tend to only consider instances proving you to be right. Paradoxically, the more information you have, the more justified you will feel in your views,” – Nassim Taleb, The Black Swan.

Posts describing the habits of highly successful people are a classic example of the narrative fallacy because writers mistake random attributes as causal relationships. There is no one-size fits all answer for how to become successful,  it’s a myth created by bad science.

Image of traits of successful and unsuccessful people
Image Source:

Take this post I saw on LinkedIn which shows the characteristics of successful and unsuccessful people. For each of the attributes shown for successful people I can think of many examples of people at the top of their profession who do not demonstrate these characteristics.

Zappos vs Amazon!

Image of Tony Hsieh and Jeff Bezos

If we look at major e-commerce retailers in the US, Tony Hsieh of Zappos published a best-selling book on the “happy place” culture he created at Zappos. He managed to build a billion dollar company, but so did Jeff Bezos at Amazon and yet he has a completely different approach to corporate culture. Bezos runs a very tight ship in terms of costs and has a “take it or leave it” attitude towards employees. It is not uncommon to hear complaints about the working environment at Amazon from ex-employees.  So, for every Hsieh you are likely to get a Bezos with a successful company doing the very opposite.

Another great example is Donald Trump. He managed to sell a convincing narrative to become the US President, but he doesn’t accept responsibility for his failures. He argues that anything negative is likely to be fake news made up by the media. Further, within the first month after becoming president Trump tried to take credit for immigration and job-creation initiatives that started before he took office. He’s not alone in his approach either as there are lots of successful business people who have succeeded partly because of their arrogant, overconfident attitude as people often mistake confidence with competence.

Trump’s use of fake news is also clearly a strategy to create a narrative fallacy in the minds of his supporters. He wants them to believe that the media are spreading lies about him to convince them that he is the one telling the truth. When it all goes wrong, which I think is inevitable, he will blame everyone but himself for his failure.

Businesses change and so do people!

A further reason why habits of successful people are a narrative fallacy relates to the fact they are usually based upon the characteristics of the individual after they have become successful. For these habits to be indicative of why they became successful they would have had to remained constant throughout their rise from office junior or  start-up founder to being CEO of a billion dollar corporation.

We all know this is complete rubbish as one can’t manage a small start-up in the same way you do a billion dollar business. For a start the complexity of a large corporation requires a very different approach than you would take with a tiny start-up, both in terms of management style and cultural values.

Hard work and luck matter!

Successful people can teach us lessons, but rather than looking at their behaviours, often it is how they approach challenges and define a problem that is more enlightening. Their experience often gives them great insights into how to deal with challenges, but don’t link an ability to be a good business person with how they live their life. What people often forget is that luck and hard work play a significant role in how successful we become in our professional lives.

Implications for Digital Marketing:

Storytelling can be especially dangerous for optimisers as it encourages us to rely on our existing mental models to generate new solutions. This is because we automatically restrict our testing and learning to those ideas consistent with those same mental models and may fail to consider alternatives that don’t fit with our narrative fallacy. As a result you can damage the efficiency of your program by limiting its scope.

When A/B testing it’s also easy to fall into the trap of trying to explain the psychological reasons why the challenger variant beat the default. We can never really be certain why users behave differently when faced with one design compared to another as we don’t have access to the non-conscious brain which makes most decisions. Further, confirmation bias means that our minds automatically focus on reasons that fit in with our existing beliefs and so we are prone to jumping to conclusions that align with our belief system.

Similar to this is the Causation Bias which is our tendency to see a cause and effect relationship in a situation where none exists. This is especially the case where we find a correlation and assume a causation even though there is no known reason or there to be causation.

How to counter the narrative fallacy?

Establishing a strong hypothesis for an experiment based upon scientific evidence before you proceed is an important strategy as this helps us avoid hypothesizing after the results are known (HARKing). Further, be disciplined with data collection and the length of your experiment to avoid cherry picking data points. When deciding how long to run your test ensure you factor in the length of the business cycle and avoid stopping the experiment before you have both a  high level of statistical confidence and a low error rate (usually below 5%).

Avoid communicating changes in conversion rates for tests that don’t reach full statistical confidence. This just encourages people to create narratives that are not based upon reliable data. Unfortunately some marketers who do not understand statistics will put optimisers under pressure to this, but it should be refused on the basis that it will result in narrative fallacies.

Finally, focus on what action you are going to take as a result of the experiment, rather than thinking about why the result happened.

Thank you for reading this post. If you found it useful please share using the social media icons below.

You can view my full Digital Marketing and Optimization Toolbox here.

To browse links to all my posts on one page please click here.

  • About the author:  Neal provides digital marketing optimisation consultancy services and has worked for  brands such as Deezer.comFoxybingo.com, Very.co.ukpartypoker.com and Bgo.com. He uses a variety of techniques, including web analytics, personas, customer journey analysis and customer feedback to improve a website’s conversion rate.
  • Neal has had articles published on website optimisation on Usabilla.com  and as an ex-research and insight manager on the GreenBook Blog research website.  If you wish to contact Neal please send an email to neal.cole@conversion-uplift.co.uk. You can follow Neal on Twitter @northresearch, see his LinkedIn profile or connect on Facebook.

The Growth Strategy That’s Being Ignored!

Why is CRO failing to get traction in the boardroom?

Why is it that Amazon Prime converts 74% of the time on Amazon.com and yet the average Ecommerce retailer only converts 3.1% of the time according to research by Millward Brown Digital? Even non-Prime customers convert 13% of the time. Bryan Eisenberg, CRO expert and thought leader suggests that Amazon’s secret is to do with developing a culture of customer centricity and experimentation that is deeply embedded in the culture of the organisation from the C-suite level down.

Given the success of Amazon with applying the principles of CRO to drive business growth, why is it that in many organisations there is little, if any, engagement with CRO at the top level of management?  This is the conundrum that the book ‘The Growth Strategy That’s Being Ignored’ seeks to answer.

Why should you read it?

Although this is a short read, Paul Rouke, from CRO agency PRWD has managed to gather contributions from 17 global CRO thought leaders, including Chris Goward , Roger Dooley, Brian Massey, Peep Laja, Bart Schutz, Oli Gardner, Talia Wolf and Tim Ash. These are people with a huge amount of experience of successfully applying CRO strategies in large ecommerce organisations.

The book focuses on the key reasons for the frequent failure of organisations to fully benefit from CRO and why optimiser often find themselves stuck in the “trough of disillusionment”. I’ve previously written about the Dunning-Kruger effect and how initial success with CRO often creates overconfidence in the optimiser’s skills and abilities to create successful tests. But, what is the cause of the despair that many CRO teams experience?

Image of Dunning-Kruger Effect for conversion rate optimisation
Image source:

A number of reasons are given for the lack of  adoption of a CRO philosophy at the executive level, including the name and a lack of change management skills in the team. But the most frequent cause mentioned is the perception of CRO as a short-term tactic rather than a strategy for long-term growth. As a result CRO thinking is often not embedded into the culture of the organisation from the C-suite downwards. This automatically relegates CRO to a tactical solution to short-term problems that can be handled by a silo in marketing or some other department in the organisation.

“The majority of marketers run meaningless tests without any strategy or hypothesis and the results are hard to analyse and scale.” – Talia Wolf, Founder & CEO of Conversioner

What you won’t get from this book is any insight into the detailed process of CRO or tips for experiments to increase your conversion rate. This book is solely about why CRO has failed to be successfully embedded into the culture and processes of many digital organisations.

“The ego of the optimisers makes 90% of tests results a lie.” – Andre Morys, Co-founder & CEO at Web Arts

I have to agree that this is a problem. Being an optimiser in an organisation where there isn’t a culture of experimentation and senior management support is limited can be soul destroying. It feels like there is a constant battle to get resources and co-operation from product, MarComs and marketing. As a number of contributors mentioned you need to employ change management skills and engage internal stakeholders first before trying to communicate your strategy.

Who should read this book?

The problem outlined in the book is clearly with communicating the benefits and implementation of CRO to executive level management. As such this is an ideal read for C-suite management and CRO managers seeking to establish a culture of CRO within their organisation.

What next?

The book should be a wake-up call for many CRO specialists and executives who are allowing their sites to fall further behind the leaders in customer centricity and experimentation. According to RedEye companies spend on average $92 on driving traffic to their website and only $1 to convert those visitors. This is not a sustainable approach because sites will increasingly be squeezed out of the market by the likes of Amazon, AO.com and other companies that recognise the benefits of a strategic approach to CRO.

I firmly believe that with the development of artificial intelligence based optimisation tools, such as Sentient Ascend, this time is rapidly approaching. Such technology is speeding up the optimisation process by allowing massively complex multivariate testing. Companies that embed CRO into their culture as a strategy for growth will exploit these tools much more effectively than organisations using CRO as a tactical tool. So maybe the book should be re-named “The Growth Strategy That You Can’t Afford To Ignore”?

Value for money:

As I have already mentioned the book is on the short side and with such a star-studied list of contributors you might have expected more detail on how to implement a strategic approach to CRO. However, the contributors do make some very valid points and there are plenty of other books to read if you want advice on the optimisation process. Given the potential audience of CEOs and CMOs brevity is also a bonus. They won’t want to read anything too detailed or long about  what they perceive to be a specialist subject.  So my advice is buy the kindle version for your smartphone or e-book reader as it’s only £2.99.

Thank you for reading my post and if you found it useful please share using the social media icons below.

The Growth Strategy That’s Being Ignored

For more details you can go to a dedicated landing page about the book.

 

Related posts:

CRO Strategy – 9 mistakes companies make with website optimisation

CRO Implementation – How smart is your approach to conversion rate optimisation

You can view my full Digital Marketing and Optimization Toolbox here.

To browse links to all my posts on one page please click here.

  • About the author:  Neal provides digital marketing optimisation consultancy services and has worked for  brands such as Deezer.comFoxybingo.com, Very.co.ukpartypoker.com and Bgo.com. He uses a variety of techniques, including web analytics, personas, customer journey analysis and customer feedback to improve a website’s conversion rate.
  • Neal has had articles published on website optimisation on Usabilla.com  and as an ex-research and insight manager on the GreenBook Blog research website.  If you wish to contact Neal please send an email to neal.cole@conversion-uplift.co.uk. You can follow Neal on Twitter @northresearch, see his LinkedIn profile or connect on Facebook.

10 Strategies for successful conversion rate optimization

Secrets of successful conversion rate optimization:

 

Conversion rate optimization (CRO) has the potential to significantly improve revenues from your digital marketing and increase business growth. Companies such as Spotify, Netflix, Google, and Booking.com have mastered this process. They conduct literally thousands of experiments a year to improve the performance of their digital experience. Yet many other companies struggle to grow their business using CRO  and fail to achieve significant uplifts in A/B and multivariate tests.

There are certainly common mistakes companies make with conversion marketing, but what are the secrets of success that the likes of Amazon and other organisations embed into their optimization programs? Below I have summarised some of the key strategies that these companies employ.

1. Start by listening to your customers:

Process for developing user personas

Before even considering A/B testing it is important to understand your customers. What are their characteristics, needs, wants, desires, motivations and concerns? What is it that attracts customers to your proposition and why do prospects buy from your competitors? In CRO being customer centric is not an option, it is an essential ingredient for success.

Once you begin to get a better understanding of your customers you can develop buyer personas of important customer groups to help you visualise your visitors and develop hypothesis for why prospects don’t buy from your company. For more information on using personas to improve conversion see my post on the buyer legends process.

If you don’t have much demographic data on your website visitors use your web analytics as a starting point. But also try online survey tools such as Surveymonkey and Typeform to obtain feedback from visitors whilst they are on your website. You should also conduct usability testing to observe visitors attempting to complete important tasks on your website. This can be invaluable for identifying major usability issues or just generating ideas about how you can reduce friction on your site.

All high performing companies start with their customers as they are the people who ultimately determine the success or failure of your brand.

 

2. Get an emotional response:

Image of faces showing the 7 emotions
Source: http://www.affectiva.com/

Now you are ready to examine and refine your value proposition. People buy benefits, not features and yet many companies still focus on product/service updates and treat people like they are purely rational beings.

Humans are emotional and social creatures, we may buy a product for conscious reasons, but we choose a brand for the psychological goals that generate an emotional response. From listening to your customers you should get insights into the kind of psychological goals that drive customer behaviour.

Use the 6 psychological goals below to consider how best to position your proposition to trigger these implicit motivations. Marketing consultant Phil Barden identified these core psychological goals from the latest neuroscience and psychological research.

6 main implicit psychologial goals
Source: Decode Marketing

 

3. Get senior stakeholder support:

Business meeting
Source: Freeimages.com

It is important that senior management understand and sponsor your conversion rate optimization program. HIPPO’s (Highest Paid Person’s Opinion) get a hard time at many conversion conferences, but an informed and engaged HIPPO can be an asset to your program, helping to develop a culture of evidence based optimization.

CRO removes the need for subjective opinions to decide which design of a web page is most effective at achieving conversion goals, but this does require a change in established decision making processes. You will need senior stakeholders to agree to such changes as otherwise you may find internal politics become a barrier to successful optimization.

4. Follow a structured process:

8 step website optimization process
Steps in website optimization process

To avoid random and undirected optimization it is necessary to use a tried and tested process for website optimization. This helps to provide rigour to your program, but importantly it can assist in building credibility within your organisation as it allows you to communicate how you identify, evaluate and prioritise changes and tests. Having a transparent prioritisation process, such as P.I.E (Potential, Importance, and Ease) is critical because it sets expectations and removes subjectivity from the testing process.

5. Resource analytics:

Image of Google Analytics Solutions Hompeage

The old saying, if you don’t measure it, you can’t improve, certainly holds true here. Some start-ups might think they can’t afford such tools, but Google Analytics has a free version, and Hotjar Insights provides visual analytics and online customer feedback for less than €1,000 a year.

What advanced CRO companies understand though is that analytics requires dedicated resource as someone won’t become an expert at web analytics if they only have time for an hour or two a day. They also appreciate that averages lie and that segmentation is essential for giving meaning to such data. Opportunities for personalisation are often driven by analytics because once you begin to analyse the behaviour of individual sub-groups you will see how different they are and appreciate they have different needs.

Similar issues arise with visual analytics, but there are also opportunities to integrate such tools with customer facing software to help with customer services, complaint handling and fraud.  Again segmentation is key to getting value from such tools and also integrating form analytics to allow you to tracking individual input field completion and drop-off rates.

 6. Scale matters:

Failure rate of online experiments

Predicting human behaviour is very difficult, especially with a complex ecosystem such as a large e-commerce website. For this reason the likes of Netflix, Google and AppSumo find that around 80% of their A/B and multivariate tests fail to deliver significant uplifts in success metrics. Our intuition is generally not be relied on with such matters as even experts are poor at forecasting the future.

This is why after dealing with the low-hanging fruit it is necessary to increase your testing and run multiple tests at the same time. There is limited evidence of interaction between tests and provided you are not testing on the same area of the page nor have the same objective running tests in parallel should not be a major problem.

7. Collaboration spreads the load:

Linked hands symbolises collaboration
Source: Freeimages.com

Conversion rate optimization cannot be done by one person – it needs to be something everyone in an organisation thinks about. Whether it is how to improve page load speed, improving the findability of stuff, cutting down on information we request from users or providing a more personalised user experience. Companies that understand CRO ensure they nurture a culture of experimentation and collaboration across the organisation to generate and share ideas, tests and outcomes.

8. Use the 80:20 rule for your test designs:

Image of 80/20 Pareto principle

 

When creating test designs don’t seek perfection or be overly restrictive with which visitors are included in an A/B test. Yes, little things can matter, but at the same time bear in mind the Pareto Principle. This states that  80% of the output will be generated by just 20% of the effort and conversely 80% of the problems can be traced to 20% of the causes.

This suggests that once you have fixed the important elements of a design the rest of the experience will probably have little impact on the outcome.  If you also always ask for two designs for each hypothesis you will also have the opportunity to learn about how implementation of an idea influences the outcome.

9. Take risks:

6 types of tests to optimise a website page

One of the main benefits of online experiments is that you don’t have to test a new design on all your traffic and you can turn the design off in a matter of seconds. This allows you to effectively manage downside risk and should be the green light for developing radical new, innovative designs to test. It is also sometimes necessary to try something totally different to achieve the big uplift in conversion that CRO promises. And yet many managers see CRO as a risky exercise and frequently try to limit testing activity due to misinformed concerns.

10. Challenge everything:

Image of call to action buttons and hyperlink

I once worked for an organisation where I was told that I couldn’t test different CTAs, such as the colour or place additional text on the CTA because brand guidelines determined the design of the CTAs. Companies that understand CRO don’t allow such untested and subjective policies to restrict their CRO program. They take great delight in saying they can even test the colour of their CTAs, not because it’s allowed by their brand guidelines, but because they test anything if they think they can learn from it.

For CRO  to reach its full potential it is important that even the smallest detail can be scrutinized and challenged through A/B and multivariate testing. It is sometimes the things that have never been challenged that can result in the step-change to higher conversion rates.

Finally:

 

Conversion rate optimization is not a quick fix strategy for websites to raise their performance. It requires a structured and rigorous approach that needs resource and support at the highest level of an organisation. The customer needs to be at the heart of your CRO program and a better understanding of customer needs and motivations is likely to lead to stronger hypothesis and more winning tests.

CRO should remove the need for subjective opinions and for that reason everything should be challenged. Management should not be allowed to hide behind untested policies if they want  CRO to reach its full potential. CRO is a strategy, not a tactic to solve short-term problems.

Thank you for reading my post and if you found it useful please share using the social media icons on the page.

You can view my full Digital Marketing and Optimization Toolbox here.

To browse links to all my posts on one page please click here.

  • About the author:  Neal provides digital optimisation consultancy services and has worked for  brands such as Deezer.comFoxybingo.com, Very.co.uk and partypoker.com.  He identifies areas for improvement using a combination of approaches including web analytics, heuristic analysis, customer journey mapping, usability testing, and Voice of Customer feedback.
  • Neal has had articles published on website optimisation on Usabilla.com  and as an ex-research and insight manager on the GreenBook Blog research website.  If you wish to contact Neal please send an email to neal.cole@outlook.com. You can follow Neal on Twitter @northresearch and view his LinkedIn profile.