Those who test more, grow faster

Airbnb, Uber and Netflix have all grown rapidly in recent years and have completely transformed their respective industries. But their success is not based solely on disruptive business models, but also on a culture that allows and encourages targeted testing (conversion optimization). This emerges from the current benchmark of digital growth factors from konversionsKRAFT, which reflects the degree of maturity of online optimization in companies.

For many companies in the DACH region, conversion optimization is little more than a hype. The enthusiasm for the first positive results from ad-hoc testings usually does not last long due to a lack of sustainable structure and strategy. But it is precisely the multiplicity of small, evolutionary changes that can add up to a massive impact on the company’s results. That’s why a minimum of 20 tests per year and the effectiveness of the optimization process are the real growth levers.

So-called high frequency testing enables companies to quickly understand the effects of individual measures. Provided that the validity of the tests does not suffer from insufficient data base (e.g., too little traffic).


Number of tests per year

However, quantity alone is not crucial to success, but depends on the quality of the tests in terms of their business impact. The focus here is on the prioritization of potential measures. It not only increases the likelihood of a high hit rate (> 50 percent successful tests), but also for high uplifts significantly – because companies focus exclusively on the most promising testing ideas. The ratio of estimated effort to expected impact (calculated using proven methods such as WiderFunnel’s PIE framework) provides the foundation for prioritization and provides insight into the overall return on investment of conversion optimization.

Conversion optimization as part of the corporate strategy

Although one in four companies has defined both goals and a business plan for conversion optimization, barely 12 percent control them through the management. However, the involvement of the C-level is helpful in making strategic decisions and driving growth through targeted testing. This is supported by the fact that 70.1 percent of those companies that achieve an average uplift of more than 5 percent are the top priority.

But in every fifth company there is nobody at all who is responsible for the topic. In most cases, they are project or product managers, analysts or e-commerce managers (46.1 percent). Divisional managers or senior managers have a hat in just under 25 percent of all companies.

Responsibility for Conversion Optimization

Responsibility and resources

The study also reveals that more than half of the surveyed companies are testing completely without a dedicated Conversion Optimization team, and if one exists, it usually fits in a small car. A quarter of these “teams” are actually one-man shows.

This number is critical especially with regard to the aforementioned testing frequency. According to the company, at least three full-time employees are needed to exceed the low growth limit of 20 tests per year.

An ideal team, meanwhile, combines diverse knowledge and skills from many different areas: data analysis, consumer psychology, design, copywriting and engineering – just to name a few.

Another limiting factor is the available optimization budget. This is currently in a terrifying ratio of 92: 1 to marketing budgets, which serve as the traffic generation. Although this is understandable if the conversion optimization is not based on a business plan to demonstrate the effect, but also shows at the same time the dilemma in which companies and especially optimizers are: The connection between increasing traffic and higher revenue is often proven, the same Proof of conversion optimization, on the other hand, is rather rare. A business plan that considers the relevant key figures facilitates budget approval.

“The fastest way to success is to double the error rate.”
Thomas Watson, former IBM CEO

According to research, the error culture correlates the most with growth; This realization is not really new. Nevertheless, most German companies do not live an error culture in the sense of a growth mindset. Rather, they do not seem to understand failure as an important part of the innovation process and therefore part of the success, but as the complete opposite.

In contrast, 85 percent of fast-growing companies (conversion rate> 20 percent and uplift> 5 percent), whose success is largely due to this culture. A change in thinking has taken place internationally as well. Companies with a good culture of mistakes aim to learn faster than the competition and to increase their intellectual capital by communicating the learnings, both positive and negative tests.

This is also the basis of the qualitative analysis. 83 percent of fast-growing companies use findings from consumer psychology for optimization. This includes the authors of the study also personas, as we know them especially from the content marketing. Consumption psychology has been shown to guide users on a website by using behavioral patterns, such as scarcity, reciprocity, or social best practices, and to positively (positively) influence their willingness to buy.

Conversion optimization holds great growth potential

In summary, there are the following three factors that significantly influence corporate growth:

  • the number of tests per year,
  • the hit rate, ergo the number of positive tests and
  • the average uplift per test.

Apart from the available financial and human resources is the only one limiting factor the validity of individual test results. The longer a test runs, the fewer tests are possible per year. The test runtime, however, depends on the amount of data required for a significant result. The more traffic a site receives, the faster the sample stabilizes and reflects the actual conversion rate. The risk of rolling out false “test winners” determined by statistical errors may be higher than the cost of longer runtimes.

So it pays to invest time in the conversion optimization and to tackle the topic sustainably. With emphasis on approach.

23561653 1663558243709766 4968025235995076297 N
Robert Weller

About Robert Weller: Who is interested in content marketing, Robert Weller should be known. The content strategist is the founder of the marketing blog and author of Content Design, The today 30-year-old built u.a. The content & influencer marketing of the multi-award-winning sporting goods retailer Keller Sports and conceived at the agency TERRITORY webguerillas social media strategies for companies such as Telekom, Wrigley’s and Volvic.Heute, he is responsible for the education & training program of konversionsKRAFT and committed as keynote speaker and brand ambassador of the Adobe Experience Cloud for sharing ideas around digital growth strategies

Leave a Reply

Your email address will not be published. Required fields are marked *