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Product Optimization: Conversion, Engagement, and Happiness
Casey WintersOnline & Interactive Marketing Director, GrubHub
@onecaseman
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Product Optimization in Three Phases
• Design/User Experience• Analytics• Psychology
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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
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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
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Conversion Rate Optimization
Ads or Friend Talking About It
Ad Click
Landing Page
Search Results
Restaurant Page
Sign-up
Payment
Order
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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.
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Back to the funnel…
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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.
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Back to the funnel again…
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You found yourself a bottleneck
• Exit rate• Too many steps?• Bounce rates• Tools
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The Local Maxima Problem
Data Analysis Psychology
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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
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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
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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
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Designing Happiness
• Contrast: Anchoring• Adaptation: Local gains and losses
• Variable rewards
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Cohort Analysis
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Hook Model
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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/