This article is written by invited guest author Mike McDowell.
When it comes to innovation, the biggest is not necessarily the best, especially when it comes to ideas. Over the course of my professional life, I’ve spent large chunks of time invested in pursuing both large scale, disruptive innovations along with extremely small scale, sustaining innovations. There are pluses to both, but for the money, you just can’t beat high quality sustainable innovations.
Sustainable innovations are generally thought of as improvements to existing products or processes. If you’re familiar with the Toyota Production System, you would have heard this described using the Japanese term, kaizen, which is translated as “continuous improvement.” It means always keeping your eyes open and looking for small ways to make something better. Sometimes it might take a large scale project but other times it might be as simple as adding or removing a small piece or changing the sequence or timing of steps in a process.
Unfortunately, sometimes we undervalue the benefits of making these small improvements to existing systems. How can making some small, uninteresting change to the purchase process on my website possibly be better than coming up with a shiny new widget to sell?
Here’s the simple answer.
On the one hand, you have your new creation. It’s the special new blinking LED Christmas tie that links up with twitter. The color of the Christmas tree lights reflect the sentiment of the linked twitter hashtag #xmas. (I will not be surprised if I see eventually see this on thinkgeek.com) Now, in order to be successful with this product, it needs to be fully designed, manufactured, stored, advertised, sold online, and shipped to customers. Even to a seasoned product developer, this would be a moderately involved process that involves substantial upfront costs and time.
On the other hand, your website already has customers on it that have some level of interest in your products or services. I mean, something brought them there and the most effective use of your time is converting those shoppers into buyers.
Think about the basic math of it. If the average conversion rate of your site is 3% (http://www.monetate.com/resources/research/), you could increase your revenue by 33% by simply getting one more point of conversion. In other words, figure out how to sell something to 4 out of 100 potential customers instead of 3 out of every 100. You can do this by seeking out and removing pain points in your website which should be easily identifiable in your website analytics data. If you don’t have web analytics running on your website, and I don’t care if the site has an ecommerce component or not, stop reading this and go put Google Analytics on your website right now. It’s free and you are definitely flying almost entirely blind without it (or an equivalent).
Consider the alternative. How many blinking LED Christmas ties would you need to sell to increase your overall revenue by 33%. I would suggest this as a relatively impossible task. It’s entirely based on speculation, even if you have market research and the best sales projections to back up your investment in the new product. Customers are fickle and it never ceases to amaze me how fast a product can go from a smash hit to completely passé. Look at the recent Pokemon Go phenomenon for the 2016 example.
I know. I know. It all sounds great on paper but implementing it is no small task. Wrong. With the right data and even a novice level ability to interpret that data, you will have the insights you need to know where to invest in those sustainable innovations to your website.
Here are 3 examples of obvious indications of customer pain points:
- Exit Page – This is an out of the box metric and it is exactly what it sounds like. It is the last page a customer looks at on your site before leaving. Take a look at the top exit page for any issues that might be obvious now that you know this is where your customers abandon. How surprised would you be to find out that your purchase button was less than obvious?
- Bounce Rate/Single Access Pages – Another out of the box metric that refers to website visits/sessions where the customer literally accesses only 1 page and then leaves. This is typical of websites that employ black or even gray hat search engine optimization tactics. A potential customer sees a search result that seems relevant but after arriving at the destination page, realizes it has nothing to offer and immediately goes back to the search engine. In your case, it could be that there is no obvious next step from these pages. Give the customer a clear value proposition and an obvious way to move on to the next step and you’ll have a much better chance of engagement.
- Website Errors or Missing Pages – If you see that your website returns frequent 404 errors (the server code for page not found) your customers are likely losing faith in your website. Correct the links or add the missing pages.
Does your website ever sell out of products where there is no known delivery date for a resupply? Do you know it when your customers experience this? If you don’t, you’ll need to implement some custom code to both track it and have your website react to it. Something as simple as offering a substitute product could be a huge benefit that gets you the sale.
The point with all of these things is that they don’t take much effort. You could evaluate all of them in an afternoon and determine where you need to deep dive. By tomorrow, you could be writing up a few quick win projects that make a big difference to your bottom line with minimal effort.
It certainly sounds great to go big. Let’s face it, you’re more likely to get a meeting with your CEO if you have a big pitch on autonomous cars or some other next generation tech. However, when major improvements to the bottom line are required quarterly, there’s a lot more money to be made in the short term with small stuff. I’ve personally generated over $100M in the last 3 years with this technique. It absolutely works.
About the Author:
He spent the last 5 years as the Innovation Architect for Hertz Global Holdings and has been developing websites for the likes of IBM, GE, and Hertz since 1994.
Mike has always said his dream job would be generating creative solutions to everyday problems and he is fortunate to be doing just that.