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Product Pricing: 4 tips for communicating price in your marketing

April 24th, 2013 3 comments

In today’s Web clinic at 4:00 p.m. EDT – “When Should You Reveal Price? The 3 principles of presenting price that helped generate a 97% increase in conversion” – Flint McGlaughlin, Managing Director, MECLABS, will use our research to help you discover how to best communicate price to potential customers, and will answer questions such as:

  • What is the optimal price range for my type of offer?
  • How should I display my price? Round numbers? Fractional?
  • When should I reveal the price? Early in the process, or later?
  • Is it possible to know I have the right price? Can I test it?

But first, we wanted to learn some pricing insights from the MarketingExperiments community. Here are four tips from Joao Alexandre, Digital Strategist, DesignPT …

 

Price is a sensible question and it can fluctuate immensely based on perceived value

A customer may be turned off by a low price by discrediting it automatically, especially if it’s a product or service he or she believes is important or has a perceived value. (Editor’s Note: Excellent point, Joao. As Neil Blumenthal, Co-founder and Co-CEO, Warby Parker, learned, “We also found that customers did not trust prices that were too low.”)

If a customer has no idea on professional custom logo design, and sees two different websites that create logos for $300, then the customer will from then on believe that is a fair price for this kind of professional work, until their belief is otherwise reframed by a different source.

 

Prices ending in “9” may be more appealing than others, which can work better for both low- and high-end ticket items alike

In total, eight studies published from 1987 to 2004 revealed that prices ending in “9” ($39, $2.49, $89, etc.) boosted sales by an average of 24% relative to other prices. In an experiment done by the University of Chicago and MIT, a mail order catalog was printed in three different price points: $39, $34 and $44. The $39 price point won.

 

Marketers can either reveal price in the beginning or near the end – it depends on the industry and the company

By revealing price early on, you can disqualify a lead that would otherwise consume your time only to conclude it does not fit their budget, while your sales team could focus on other pursuits.

By revealing price later on, you have the opportunity to build value and uncover needs that the customer might not say directly and you would only find out by proper questioning.

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Marketing Career: Don’t overlook these 4 marketing fundamentals

April 1st, 2013 No comments

Technology is becoming more and more essential to marketing – from marketing automation platforms to complex databases. In fact, Gartner analyst Laura McLellan has predicted CMOs will spend more on IT than CIOs by 2017.

While this focus on technology can be helpful to marketers, the danger is that it causes marketers to become technologists instead of, well, marketers and overlook the fundamentals of marketing.

To help get back to the building blocks of marketing, I turned to Bob Kemper, Senior Director of Sciences, MECLABS, to help you understand how some of the fundamental teachings you read about on the MarketingExperiments blog were initially developed.

The mechanics behind how MECLABS (the parent company of MarketingExperiments) teaches marketers may have become more structured since its beginnings, but the philosophy is still the same, according to Bob.

In the earliest days, Bob said, “we were kind of feeling around for what it is that marketers needed to know, and didn’t know.”

Research Partnerships are an important element of today’s MECLABS that took time to develop into their current, structured format. In the beginning, it was a much more informal conversation with Flint McGlaughlin, Managing Director, MECLABS.

While the logistics have changed, Bob said the essence of the approach is the same, and “there’s a continuity of approach from the earliest days,” he said, only with a refined set of processes. 

Bob discussed four fundamentals.

 

Fundamental #1: Ideal customer

Working with Research Partners, Bob said the team would look at a page together, and identify “what today we would call an ideal customer.”

It wasn’t as well defined at the beginning, he said, and discussions centered on questions like, “tell me about your best customers, those that you are most able to help – who are they, how do they think. When they arrive at this page, what’s in their minds?”

This process evolved over time toward what’s now referred to in the MECLABS Offer/Response-Optimization meta-theory as “customer thought sequence.”

Theory into practice: You should focus on your ideal customer while crafting your value propositions at four levels, and then use them to keep every member of your company focused on communicating and delivering on those value propositions through not only your marketing, but also your sales, customer service and product development organizations.

 

Fundamental #2: Thought sequences

“It’s principally about the process of decision making — about what to buy, from whom to buy, and how,” Bob said.

Flint has always had an approach that adopts the frame of reference of “a customer arriving at your conversion funnel, in whatever form it might take, and addressing it as a thought sequence,” Bob said.

Theory into practice: By understanding how your customer thinks, you can create more effective landing pages, offers and campaigns.

 

Fundamental #3: Redefining marketing 

“[Flint] would conduct consultation calls with marketers … reviewing their current landing pages and conversion paths together, and make recommendations based not upon the operational ‘here’s what has worked before,’ or ‘I’ve done this,’ but based upon the philosophical principles of human decision making,” Bob said.

Marketing began to be viewed as a process for gaining insights about what compels people to make the choices we do, instead of the more established method of constantly pushing onto customers. The focus became placing value at the forefront, not “convincing or cajoling, but rather simply revealing the truth,” Bob said.

This revelation of the truth to consumers centers around whether or not your business has a value proposition, he said, and if “you are truly the best for some significant group of people who are definable, who are discernible.”

That shift in thinking became the basis for how MECLABS approaches marketing as “a revolution of thinking, a complete reversal, a dichotomy from even professional marketers coming out of business school,” he said.

Theory into practice: are you conducting your marketing in a rigorous fashion and using A/B testing to learn how and why your customers make the decisions they do? For example, you can review the MECLABS methodology for discovering what really works in optimization.

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Landing Page Wireframe: Why focusing on ‘one variable at a time’ doesn’t work

May 18th, 2012 4 comments

There’s a myth being propagated across the Internet as we speak …

It’s the myth of “one variable at a time” testing.

And it’s mostly bunk.

Well, at least in the way most marketers think about testing “one variable at a time.” Usually the result of testing one thing at a time is a page that looks like this:

 

This page was submitted by Jerry Everett, a marketer from our Web clinic audience. When our researchers provided live optimization suggestions, Jerry asked us to review his page in depth. We thought it would be the perfect opportunity to illustrate this point.

While Jerry didn’t necessarily test only one thing at a time to get to this page, he did a redesign based on specific variables in the page design. He was focused on the individual headline, the bullet points, the button, etc.

It looks as though it may have been designed by a committee (even if it wasn’t).

The problem with Jerry’s (and most marketers’) approach to landing page treatment design stems from a misunderstanding of the term “variable.”

Usually, marketers think of variables as single elements on a webpage, e.g., a headline, a button, a layout, etc.

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Form Optimization: 3 case studies to help convince your boss (and Sales) to reduce form fields

March 30th, 2012 3 comments

So your boss still thinks that “optimization” means making your site load faster.

We get it.

Marketers are constantly battling the highest paid person’s opinion (HiPPO) in favor of real conversion response optimization tactics based on a sound methodology.

And they usually lose because they don’t have a testing program with real results to show those misguided HiPPOs (and Sales leaders) that they’re wrong.

So to help you win your HiPPO/Sales battles, we’ve created a deck with three case studies highlighting the importance of that most basic of optimization principles:

Reducing the number of form fields.

Please feel free to download the deck from SlideShare and customize it for your own HiPPO pitch. Also, if you’ve found it helpful, we’d love for you to tweet it. The more people we can help with their HiPPO and Sales battles, the better. ;)

View more presentations from MarketingExperiments.

The Caveat

Sometimes, counter intuitively, you want more friction in your process. We’re assuming in this blog post that you have the opposite problem, but please don’t discount the possibility that your forms actually have too few fields…

Lead Generation Optimization: Finding the right amount of friction

 

Related Resources:

Lead Generation: Testing form field length reduces cost-per-lead by $10.66

This Just Tested: An aesthetic design that produced 189% more leads

Hidden Friction: The 6 silent killers of conversion

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Quick Lift Ideas: How switching a headline with a sub-headline could increase conversion (+6 more ideas)

August 22nd, 2011 3 comments

In an ideal world Dr. Flint McGlaughlin’s memorable testing quote would be true 100% of the time: “The goal of a test is not to get a lift, but rather to get a learning.”

But in the real world where marketers are faced with deadlines, tight budgets, and skeptical superiors, sometimes you have to design a test for the purpose of a lift so that you can THEN start testing for learnings.

So how do you get a quick lift on your pages?

Well there’s no catch all answer for every page. If you’ve been hanging around MarketingExperiments long enough, you know that. And when there’s no catch-all answer, the best way to learn is through examples.

With that in mind, here’s an example of an email and landing page combination that Senior Research Manager Jon Powell and Managing Director Flint McGlaughlin gave quick suggestions for in a recent web clinic – Crafting an Engaging Email Message: How a properly focused email message can increase conversion by 85%

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Hidden Friction: The 7 Silent Killers of Conversion

August 15th, 2011 25 comments

Friction is one of the greatest obstacles to your conversion process, and though most marketers currently have some idea of what Friction is, many are only seeing half the picture.

When asking marketers to identify the Friction associated with a conversion process, the response is often very confident. Usually, the number of form fields on a page will be pointed out first, the number of steps in a process next, and occasionally a third comment might focus on the length of the individual pages themselves. The overall consensus from marketers is that if you can eliminate these simple elements, then you can eliminate Friction.

However, our research suggests that most of the Friction in a conversion process goes undetected. Further, this “hidden” Friction often is the most lethal to conversion. So, in this post I wanted to lay out 7 of the most undetected ways that Friction might be threatening your conversion rates. I have dubbed these The 7 Silent Killers of Conversion.

Read more…

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