Product Optimization: Conversion, Engagement, and Happiness
Casey WintersOnline & Interactive Marketing Director, GrubHub
@onecaseman
Product Optimization in Three Phases
• Design/User Experience• Analytics• Psychology
That’s One Long Ass Funnel
Ads or Friend Talking About It
Ad Clicks
App Store
App Download
App Open
Search Results
Restaurant Page
Sign-up
PaymentOrder
Order Again
Create Habit
Tell a friend
The Web Version
Ads or Friend Talking About It
Ad Click
Landing Page
Search Results
Restaurant Page
Sign-up
Payment
Order
Order Again
Create Habit
Tell a friend
Conversion Rate Optimization
Ads or Friend Talking About It
Ad Click
Landing Page
Search Results
Restaurant Page
Sign-up
Payment
Order
What is Conversion Rate Optimization?
• Conversion Rate Optimization is the process of making continual changes to a website/mobile app/landing page with the goal of increasing the amount of visitors who turn into conversions
• Every page on a website is an ad for the next page.• If your page did not generate a click to the next page, it
failed.• Find the pages that generate the least clicks to the next
page and fix them. These can be called bottlenecks.
Back to the funnel…
Landing Page Optimization
• If your funnel is healthy, you probably should spend most of your time on landing page optimization
• A/B testing• Bounce rates• Find the pages that generate the least clicks to
the next page and fix them. These can be called bottlenecks.
Back to the funnel again…
You found yourself a bottleneck
• Exit rate• Too many steps?• Bounce rates• Tools
The Local Maxima Problem
Data Analysis Psychology
This is where Behavioral Economics comes in.
• People are bad at math• People use irrelevant information as a guide to
making decisions• People are overconfident• People hate losing something more than they
like gaining something
Prospect Theory1: People do not think about
absolute wealth, but of local gains and losses
2: Whether something is considered a gain or a loss is based on a reference point or anchor
3: People are risk averse with gains and risk seeking with losses
2+3: Risk preference depends on reference point
4: People are more sensitive to losses than gains of the same magnitude, called Loss Aversion
What does this mean?
• It means how you frame a decision affects what decision a person makes
• This power can be used for good or for evil
• Choice architecture is the technical term for framing problems in a way that makes people more likely to behave in the way you wish them to
Designing Happiness
• Contrast: Anchoring• Adaptation: Local gains and losses
• Variable rewards
Cohort Analysis
Hook Model
Stuff You Should Read
• The Goal by Eliyahu Goldratt• Thinking, Fast and Slow by Daniel Kahneman• Nudge by Richard Thaler and Cass Sunstein• Predictably Irrational by Dan Ariely• http://www.slideshare.net/nireyal/hooked-mo
del• http://lsvp.com/2010/07/19/how-to-estimate-
lifetime-value/