I help companies with conversion rate optimization.  One of my clients recently wanted to make most of their home page into a video that users had to watch prior to continuing.  As a result, I did a lot of user testing to determine what makes a good home page video.

• The purpose of the video is to sell, not educate. When people look at the home page video, they’re looking for you to “sell” them, so a video which simply explains how the product works is not effective. Product walkthrough videos should be part of your product training.
• The video has to be more like a commercial than a movie.  The video should be between 30 and 90 seconds (max) and has to open very quickly.  People will decide in the first few seconds whether it’s worth watching the rest of the video.
• Make sure you explain what job or problem your solution is solving.  People are generally looking for answers to their problems, so it’s important that your video clearly explain what the problem is and what the solution is.  Don’t use jargon-y terms like “cloud”.  People generally know that Cloud means Internet, so that word adds little value.
• The video should supplement the copy on your site, not reiterate it.  People browse the web quickly, looking for signal over noise in their search.  They came to your site looking for something, so the copy needs to support that.  If they watch the video, that’s a bonus.
• Realize that not everyone will watch the video.  It varies, but assume only 10-20% of your site visitors will ever watch the video.  Those that do are likely to be much more “sold” on your solution if you do a good job.  Don’t try to force users to watch your video as some people just don’t want to watch a video, ever.
• Make it clear that it’s a video.  Most video sharing sites do this automatically by including what is obviously a play button.  However, if you’re going to open the video in a lightwindow, you’ll need to make your own preview image.  A circle with a right-facing triangle in it is a sure sign that it’s a video you can click on to have it start playing.
• Include the words “Watch to learn more” on the video preview image.  This simple bit of explanatory text makes a huge difference in getting people to watch your video since you’re now giving them a value proposition.  Lots of companies embed a 9 minute training video, or an otherwise irrelevant video, on their home page.  By including this text, you’re telling them the video is designed to tell them more about your solution and you’re not going to be wasting their time.
• Use a premium video sharing service.  I’ve seen commercials play before YouTube videos embedded on a company home page.  This will make your company look unprofessional and desperate to save money at best, or incompetent at worst.  Vimeo allows good control over the preview thumbnail, what controls are shown, sharing controls, what happens at the end of the video, etc.
• Make sure the video is easy to watch.  If you want people to watch the video right in the page, then make sure it’s in a large enough area.  Another good solution which almost all consumers will accept is watching the video within a larger lightwindow which pops up when the video preview frame is clicked.

There are lots of ways to make an ineffective home page video, unfortunately, I’ve seen many of them.  Poorly made home page videos result in confused users and reduced conversion rates.  Conversely, a valuable and well implemented home page video can excite users and increase conversion rates dramatically.

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Let’s take the case of two hypothetical SaaS companies who both sell the same product, we’ll call them company A and company B, to demonstrate why CRO is critical to successful online marketing.  Company A engages in a systematic campaign to increase conversion rates throughout their marketing funnel.  Company B does not.  Over the course of a year, Company A improves their conversion rate for paid channels by a factor of three (I’ve achieved this in under six months, so it’s realistic).

Here’s a quick analysis of the effect, not taking into account changing anything else:

Imagine you’re the marketer at company B.

Marketer B struggles to come up with effective marketing channels, trying tactics that are more difficult to track ROIs, like social media campaigns to gain Facebook likes and Twitter followers in order to buy time while figuring out how to make direct paid campaigns work.  Frustrated by company A’s success, marketer B assumes that company A has “deep pockets” and “lots of VC funding”  because how else can they possibly afford to be losing money  (assuming their business economics are the same)?  As you can imagine, it’s very simple to make the assumption that the business economics are the same since if you look at company B’s site, it might be a little slicker looking (or not, think Craig’s List or Amazon), but nothing jumps out as a massive competitive advantage.

Now imagine you’re the marketer at company A.

Your investments are paying off in dividends and all marketer A has to do is decide how quickly to grow and where/how else to allocate the marketing dollars.  The growth gives the CEO great confidence in marketer B’s ability to acquire new customers while decreasing spend, thereby prompting the board to commit to additional funding: “if we get this money, we’ll be able to scale to 5X the size we are today!”  Marketer A gets the mandate from the Board & CEO is to hit the gas on growth, upping the spend to $3/click since you’re willing to lose some money to acquire customers in the near term.  At 3X the spend, marketer B can generally buy much more than 3X as many clicks, it might be 10X or more.  And if marketer A continues their conversion efforts and drives down costs further, the economics only get better.  CRO is a win-win.

Conclusion: CRO should be in every marketer’s toolkit.

Marketers these days have a lot of tools at their disposal, and field experts willing to “help” them with each one: SEO, SEM, various social media & viral strategies, as well as all the traditional channels such as offline advertising, PR, etc.  Conversion Rate Optimization is one of the newest ones, and it’s often misunderstood (CRO is not done at random… this topic merits another blog) and ignored.  Strategic conversion rate optimization is an essential marketing tool, since the effects have an amplifying effect on all other marketing activities.  If you don’t employ CRO, your site suffers from a massive competitive disadvantage, a disadvantage you might not even realize you have.

Gathering results
Since the purpose of the Must Have Score is to divine the important use cases and double down on success, it’s important to gather data from customers who are successful with your product.  Here’s my recommendation for the survey distribution, based on business model:

• Freemium  Dedicated email just to paid customers. It’s these 1-5% of your customers who you want more of, so you want to find out what features they care about and get more customers like them.  It might also be helpful to get results from some free customers who you think should be paying but aren’t, as their results will help you understand why they aren’t paying.
• SaaS with a free trial.  Include the questionnaire on the dashboard when free trial users first login. A quick way to do this is to use KISSinsights – you can create a one “question” survey which appears and asks the user “Could you take one minute to help us better understand your needs?” with the only answer being yes, and they are automatically directed to the survey when they click yes.

Interpreting results
The must have score process helps you understand your customers’ must have use cases.  However, a use case is not a benefit. Therefore, you have to translate the must have use case into a benefit that you can promote in your marketing activities.  As an example, I run a side project called Ultimate Blog Security which helps people make their WordPress blogs secure.  When I ran the Must Have Score survey, I got the following result: As you can see, there is a small group of people for whom one use case is the “must have”.  The Must Have use case is “Reminder of Security Issues”.  As you can imagine, we can’t exactly create a headline on our home page which says “The Best Reminder of Security Issues for WordPress”.  Instead, we have to interpret the results. What it turns out is valuable is a small feature that’s included in our free plugin for WordPress.  It exists in the admin toolbar when you’re composing a new blog post and looks like this: It turns out that being constantly reminded that a blog is not as secure as it could be, and therefore the blog owner’s hard work could be lost, is super valuable.  While I always thought that was a neat feature and knew our customers liked it, I didn’t realize how important it is relative to other features.  As a result, we’ll be orienting our marketing and product development around that feature since we know it’s important and it will help us grow. While I can’t publicize the specific work I do for clients because it could compromise the competitive advantage I’m building for them, I can tell you that I have seen dramatic increases in conversion rate from adjusting marketing messaging based on the MustHaveScore results, but only once I interpreted the results in such a way that I understood what the customers were trying to tell me.

Objections
I did run into one friend who thought the content of the survey was “objectionable” because he didn’t like the question “How would you feel if Ultimate Blog Security was no longer available?  Don’t worry, we’re not going anywhere”.  In survey.io, this question is asked without the “Don’t worry, we’re not going anywhere” part, and I’ve had people call me up asking if we’re about to go out of business, etc.  To me, this was a great sign that they really depended on the company and wanted to see it succeed.  If you’re worried about your customers leaving you because you asked them this question, then they’re likely going to leave you anyway, and it’s that much more important that you make them want to stay.

Conclusion
The Must Have Score is one of the most powerful marketing tools that is available right now, and when it’s used correctly, it will help you understand your customers much better and help you dramatically increase your sales.

I think this is the future for the following reasons:

1. More profits. With little or no sales staff, it’s more profitable to deliver software this way.
2. Less risk. Without having to hire a sales staff, there is less risk of the market changing and you being stuck with an expensive, hard to manage sales force.
3. Shorter sales cycle.  Just about anyone can type in their information and sign up for your product if you’re charging under $100/mo for the basic service.  Anything that involves a salesperson is going to end up costing a company at least $1000/mo, and that means a whole long drawn out multi-month sales process.
4. Reduced competitive threat.  If you’re a company delivering a $1000/mo solution to an enterprise, and a competitor introduces a substitute product at $100/mo, if the switching costs aren’t too high, you could lose them. Basically, expensive enterprise SaaS products are subject to “innovator’s dilemma” type attacks, particularly if switching costs are low.
5. More learning.  As a self-service SaaS, you’re likely to have more customers, which allows you to learn more from them and allows you to grow you business more quickly and profitably.
6. Easier to implement.  The commodity LAMP stack in software engineering is migrating up-market and the tools necessary  to implement and run a SaaS model have become much cheaper than they used to be.  A great example is payments processing – just a few years ago, there were no recurring payments processing/management companies, and it was a nightmare to manage recurring credit card payments.  That has all changed with companies like Recurly entering the space.

Inevitably some of these questions are not answered, and they realize that they in fact do not need a CTO, but instead need to flesh out their idea more.  During the course of them explaining their idea, I note a few things that I perceive to be big assumptions, and when it’s my turn to talk, I point out those assumptions, and start asking them if they have data to conclusively know if they are true or false.  Then, I send them off to test their assumptions.  This saves an incredible amount of time and cost, and not just dollar cost, but opportunity cost as well – instead of the idea you have in your head, you might be off starting another idea.  This has actually happened – my friend Mark Manning was working on an online backup idea, and when a few of his assumptions turned out to be wrong, he changed gears and started DodoCase, which is the iPad Case that President Obama uses!

David Cancel put together a great presentation that I think captures this well.  Check it out here.

To illustrate, here’s an example of something that is full price:

Now, here’s something that is on sale:

The only difference in presentation is the crossed out price.  For users who expect everything on the site to be a good deal, if they’re not aware of this, they are being “tricked” into buying stuff for full price.  Probably they are celebrating their success over at Gilt right now since this stuff surely comes with high margins.  However, now their users have to think when they look at the site, and perhaps comparison shop to find out of they’re getting a good deal or not.  This dramatically erodes their competitive advantage and probably even has negative effects on employee morale.

It sounds like such a simple task, but it’s much harder than it sounds.  An engineer has to create the infrastructure to send the email, something has to trigger it to go out, there are some queries which have to run, the query results have to be formatted properly, etc.

So, my suggestion is to start small.  Start with a blank email if you have to.  Even a blank email coming to your inbox every day will remind you that you have no idea what is going on in your business.

I suggest using an email because it shows up in your inbox every day at the same time and you don’t have to do anything.  You want to know what’s going on in your business every day anyway, and you are probably logging in to various things such as google analytics trying to figure out what is going on and feeling confused.  Better to have it just arrive in your inbox with the key numbers you need.

I’ll cover what should be in the email in a separate post.

Having been the guy who had idea X and spent two years of my life building idea X only to find out no one wanted it, it’s my personal crusade to never let my friends build idea X before they find out if someone wants it first.

The whole Lean Startup movement talks a lot about minimum viable product, but you still have to decide what the minimum viable product is for idea X.

My consistent advice for the first step is to write a list of assumptions.  An assumption is anything you don’t have direct data for.  It’s remarkably hard to do, because you have already convinced yourself that most of your biggest assumptions are true, so you have to force yourself to write them down.  I open up a word doc and actually write them down in a list.

I was working on a concept of “TurboTax for personal bankruptcy” for a while, and my assumptions included:

• People going bankrupt have an internet connection where they could fill out the forms online
• They haven’t filed for bankruptcy yet because they can’t afford a lawyer and the forms are too complicated/intimidating to do it themselves

It was a much longer list, but you get the idea.

Once you have the list of assumptions, the next step is to order the assumptions from most risky to least.  In the example above, if they didn’t have an internet connection, filling out our forms would be really hard.

Next, do whatever you can to prove/disprove those assumptions.  Usually this involves interviewing a few prospective customers.  In the bankruptcy case, I put an ad on craigslist in the gigs area saying I was looking for people considering filing for personal bankruptcy and I’ve give them a $20 amazon gift certificate in exchange for up to 30 minutes of their time.  This worked, and I was easily able to interview a few people.  It turns out that if you’re really strapped for cash, the internet is the absolute last thing you give up because it’s your lifeline to the outside world.

One of the assumptions in my list turned out to be a deal breaker so I ultimately didn’t move forward with the business, but I saved myself a massive amount of time and money building the product that would have ultimate failed.

I don’t have hard evidence on this, but my theory is that it’s spring break, and small business owners/managers go on vacation along with their kids.  The magnitude of the slowdown seems to be roughly the same as you’d see in the week leading up to Thanksgiving.