When it comes to marketing and advertising budgets, the vast majority of money is used on lead generation activities, with only a few dollars spent on nurturing and converting those leads into full blown business opportunities. But those companies that focus more of their marketing efforts on lead conversion and understanding the journey a prospect takes from a click to a customer is seeing much more marketing success.
Kevin Lindsay, Director of Product Marketing for Adobe’s Target product, part of the Adobe Marketing Cloud, shares with us his take on why it is critical for marketers to start focusing more on conversion activities in order to get the most out of their marketing efforts.
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Small Business Trends: The whole idea of conversion across different types of devices. How are companies looking at those different conversion types across the different tablets and device types?
Kevin Lindsay: Well, let’s start with the first part of the question, which is really a good one. Because when we talk about conversion, it does mean a variety of different things when you’re looking at different industries. When you take Adobe, just as one example, there are multiple things we want to happen on that site.
One type of conversion is someone actually saying, ‘OK, I found Photoshop, I found the version of Photoshop that I want, I’m going to add it to my cart and I’m going to buy it,’ or a subscription to Creative Cloud or whatever it might be. It’s an eCommerce conversion the way we all classically think about conversion.
Another type of conversion is when we use our digital marketing efforts to ultimately generate a sales accepted lead for our enterprise sales folks. Now along the path to that conversion would be something like downloading a whitepaper. We would call that a micro-conversion. What are the different conversion events that actually need to lead up to that ultimate conversion if you will.
Small Business Trends: The sale?
Kevin Lindsay: Right. In our case, from an enterprise software sales perspective, we’re not even looking at the sale as the conversion. From a digital marketing impact perspective, if we get the lead, then that is the conversion. We’ve done our job on the digital marketing website. We’ve passed it over.
Now obviously a lot of people are tracking the eventual sale, and that is a conversion. From a digital marketing perspective in the way that most of our B2B clients look at it when they are using digital marketing for lead gen, they’re looking at things like whitepaper downloads and videos and product tours and all those kinds of things. What is the value of those kinds of offers? What’s most appropriate at the top of the funnel versus mid-funnel versus at that point where someone is ready to take a meeting? What are the things that are most impactful?
The same kind of reasoning can be applied to the scenario in financial services, where today, particularly in the U.S. banks are feeling a crunch due to legislation around service fees, and the fact that they have to make up that money somewhere. They’re actually engaging in merchandising optimization, cross-selling and that sort of thing.
If you have a mortgage with a bank, they will try to sell you a home equity line of credit. Debit card, maybe on the first purchase you get a $50 whatever toward your purchase, credit. Whatever it might be, as you look across industries, there are different definitions of conversion. Then within that, as you alluded to, there are these gates that you need to get through. Something we’ll call micro-conversions.
From an analytics perspective we were looking very, very closely at the make-up of our customers’ journeys. What’s happening along the path here? Where is fallout occurring, and where can we be making improvements along the way to improve or fatten the funnel up at the top?
Theoretically, you do that, you take more people through and you improve ultimately, your conversion rate. That’s where optimization fits in, and that’s where Adobe Target fits into the picture. How do we take that data, how do we make it actionable, how do we actually turn what we know into insights that improve conversion? Or in the case of media, it might be engagement for example.
Small Business Trends: What are folks focusing most on? Getting the conversion rate up or making it more efficient, or both?
Kevin Lindsay: I’d say it’s both, but let me first say four years ago we put out a stat. We corroborated this with analysts out there in our community as well as looked at our own data.
We reported that for every $92 that companies were spending to acquire new customers, they’re spending $1 to convert those visitors. I don’t think things have changed dramatically in the last four years since we put that stat out. That tells us that there’s still a very, very big focus on acquisition spend, on display advertising, search engine marketing obviously.
Companies are pouring a lot of money at the top of the funnel to fill the funnel, but not a lot to actually take people through and optimize that journey for the conversion.
It’s been kind of slow. Adoption has not been as aggressive as you think. Now, there are truly some best use case examples, where companies are doing it, where there’s a healthy overall, I’d say culture, around optimization. They know that it’s technology but it’s also best practices and it’s people. It’s all of those things. Then they’re seeing better results from those efforts.
Then you’ve brought up the point around devices, and again, when you’re looking at conversion and you have all these different micro-conversions, and then you add to that complexity of all these different touch points. Where does one person start? Where does a person start on one device, maybe, and then pick up with another?
What do we need to look at in terms of length of something called cart persistence, where somebody actually adds something to the cart? They don’t buy it today, but that doesn’t mean they’re not going to buy it. What is the length of time it takes for someone to convert in financial services, and across how many different touch points?
Our financial services expert, a guy named Jason Ward, says basically people go to financial services sites and they lurk. They hang around and they leave, and they come back and they do more research.
Now they’re going to do it across all these different touch points. They’re going to be on the train, going home, they’ll use their iPhone to understand rates or different products and service fees, whatever it might be. Then they go away, and then maybe later on that evening when they’re sitting at home with their tablet they complete the process.
It’s adding a new level of complexity, and so we need to look at how do we close the loop on this? How do we track from one touch point to the next to the next? How do we optimize that conversion process as you add this new level of complexity as well?
Small Business Trends: What about mobile app versus mobile website conversions? It’s funny, because I’m not a big Dunkin’ Donut kind of guy, but somehow I got their app. They have the locations, nearest locations, deals. Next thing you know I’m using this to do more than I ever did with them.
Kevin Lindsay: Yeah. I love this topic. We’re seeing some very, very interesting things, and we have this discussion a lot. A colleague of mine covers this area very extensively from more of a business and use case perspective around app versus site.
First of all, his advice always is that if you have limited budget and you need to start with one or the other, he tells clients to start with mobile-optimized site. Particularly if SEO is important to you the site is just that much more valuable in terms of acquiring traffic.
We’re seeing huge uptake and great results from apps. The retailers that have invested in apps are seeing very nice conversion rates from apps. The shopping apps are pretty powerful. I don’t know if you have the Target iPad app. It’s beautiful. It’s so useful, and has so much utility built into it, that you really can’t do with a normal site.
Small Business Trends: Do you see moving forward with more conversion types taking place on a social network? Maybe a certain kind of a conversion type, or a purchase directly from a website, fanpage?
Kevin Lindsay: Last year and the year before, there was a lot of talk about social commerce. A lot of our customers were beginning to play around with it. They were using their various offerings that you could use to actually integrate commerce onto your pages. Some of the commerce platforms had plugins and so on.
I talked to a couple customers who said ‘nothing, nada.’ Most of them have abandoned that, but they do recognize the value of social features on their site; also the value of brand engagement and the role that social referrals play.
That brings to mind ‘OK, on a product details page maybe I should be really optimizing that share button because the value of the share is really high.’ I had a customer speak with me at an event last year who said, ‘I do that. I really, really encourage the share, because when this person shares out to a social network, those people with whom he shares that come back to the commerce site, they’re converting at an 11% conversion rate compared to my 3% site average conversion.’
The value of the share is really, really high. In something like apparel retailing, it’s huge. Then you get into some interesting things like within Adobe Social, maybe you have an ensembling app on Facebook and you get people sharing an outfit that they’ve put together.
Small Business Trends: The thing that still gets my attention is this $92 spent on customer acquisition for every $1 spent on conversions.
Kevin Lindsay: Yeah. It may have improved marginally, but it’s not great.
Small Business Trends: Do you see, as companies get more and more involved in these exercises, more time and effort and resources spent on that aspect of it?
Kevin Lindsay: I think clearly acquisition spend is always going to lead the way. It’s definitely going in the right direction, and when you look at the results of this optimization survey and you look at the correlation between companies that are engaging in optimization and testing, targeting, all that kind of stuff – they see higher conversion rates. They answer all the right questions in the affirmative, those folks that are engaging in this kind of stuff. It does pay off.
The woman from Brooks’ Brother who we were on the phone with earlier today, she got up at an event a couple weeks ago and said, ‘This one campaign that we ran, this one experiment essentially, more than paid for the investment in this technology and the people it takes to run the thing for a year.’
These kinds of efforts pay off. Where companies maybe get a little bit disillusioned, but this is typical human behavior. We all start out gung-ho with things. We keep up the momentum and say, ‘What’s next? What is our optimization plan? What’s our testing road map here?’
Small Business Trends: Yeah, have a plan to get the most out of using this.
Kevin Lindsay: Exactly. I think that’s what we, through our technology, we have big products, they’re big solutions. They require an investment of some time to actually say OK, we’re going to take this thing on. It’s going to be a program, it’s not just an individual project or series of tests. I think that’s really important that people get that.
This interview on conversion is part of the One on One interview series with thought-provoking entrepreneurs, authors and experts in business today. This transcript has been edited for publication.
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.