November 25, 2012

Dear Catalog CEOs: Optimizing The Performance Of Your Website

Dear Catalog CEOs:

No, I am not writing about Cyber Monday.  That's a topic that keeps trade journalists and the mainstream media in business, not you.  Why even worry about making changes to discount/promo levels that impacts +/- 20% of 1.2% of annual sales?  Seriously.  Think about it for a moment.  You give away gross margin dollars so that the press has something to talk about, earning them advertising dollars.  Fun!

Here's a true story about retail brand.  This brand decided to completely revamp their website, top to bottom.  A totally different look and feel.  Social plug-ins.  User comments.  A big deal.  Months of in-house labor.

The new site rolls out on a Monday morning.  Sales are a catastrophe (i.e. -20%).  Users are commenting, but they're saying negative things!  "Best customers" are complaining that they can't find anything.

What would a conversion optimization expert / digital marketing expert do?

They'd run an A/B test, wait until statistical significance was achieved, and then they'd inform all of the employees who spent all of this energy that their efforts were fruitless.  They'd recommend going go back to the old design ... "you've got to listen to the customer".  They'd demand that the company adhere to a data driven approach to managing the business.

What did Management do?

Management stayed the course, not making any changes.

At this point, folks would say that Management were big, dumb "HiPPOs" (Highest Paid Person's Opinion).  We'd hear the digital marketing community complain that a "data driven" approach, coupled with facts acquired in actual A/B tests, clearly paint the right path to profitability, but Management "went with gut feel".  Twitter would be filled with both anguish and laughter over this story of feckless Management ineptitude.  Somebody would produce an infographic, outlining the "right" way to manage a business.

How did the story turn out?  Well, within a few weeks, the performance of the new website was equal to the performance of the old website.  And the new website had improved functionality.  Had Management not exhibited patience, the company would never have found out that the new website would perform as well as the old website.

If you combine art, analytics, business experience, customer development, and fantastic merchandise, you've got something!  The secret, of course, is identifying the right combination of art, analytics, business experience, customer development, and fantastic merchandise.  

That's what we're all trying to figure out.

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