Background Two MarketingExperiments formulas, the Optimization Sequence and the Conversion Index, represent critical principles that are essential to the effectiveness of any Landing Page optimization project. The Optimization Sequence Our research has shown it is most important to optimize your product first; then the presentation of your product, your Web site, and all the collateral around it, including e-mails; and then your channels, such as PPC ads and natural search. In the formula above, “OPr” stands for Product factor. Optimization here includes product attributes such as quality and usability as well as the Value Proposition of the product: Why someone should buy this product instead of a competitor’s. “OPrn” stands for the Presentation factor. Optimize every step along the conversion process, from your email copy to the Landing Page to the check-out process. “OCnn” represents optimization of the Channel factor. How can you best match the specific motivations that brought prospects to you via that Channel? The best performing Landing Pages are those that match exactly the Motivation of the customer coming to you from a given channel. The MarketingExperiments Conversion Index (above) addresses the probability that a given visitor will convert (complete the entire process), where: “C” represents the probability of Conversion. “m” represents the level of match between offer and customer Motivation. “v” represents the clarity of expression of Value Proposition. “i” represents the Incentives used to counter Friction in the sales process. “f” represents the level of Friction in the sales process. “a” represents the Anxiety caused by the conversion process. 4, 3, and both 2s are coefficients in the index representing the relative level of return on investment for time and energy spent addressing each factor. Although the coefficients are market-specific, product-specific and company-specific, they represent our experience from thousands of optimization experiments with hundreds of companies across a broad spectrum of industries. After Motivation, the clarity of the product’s Value Proposition is the most important factor in determining whether a customer buys from you or not. Why is this product different? Why is this product better? Why are you the best source, Follow

We received several requests for more information on price testing subscriptions after our last Web Clinic on finding ideal price points. Let me start by reviewing the concept of Price Elasticity of Demand (Ed), a measure of how much demand changes in relation to a change in price if all other factors remain the same. • If demand is price inelastic (Ed < 1), a price increase increases total revenue and a price decrease decreases total revenue. Picture “necessary” goods or services or those without competition. • If demand is price elastic (Ed > 1), an increase in price decreases total revenue and a decrease in price increases total revenue. When there is a readily available equivalent product from a competitor you are likely to see elastic demand. • If demand is price unit-elastic (Ed = 1), price and demand are offset. In order to use your Ed calculation to further your business goals you need to have done some testing of your product or service at several different price points. The example we used in the clinic was a subscription offer at $69.95, which was the Control price, against $50, $59.95, $75, and $79.95. We tested for two weeks and knew how many subscriptions we sold at each price point during the test period. 20% of traffic was directed to each offer page. Our calculations showed that demand was inelastic at all price points compared to the Control: when price went down to $50 for example, total revenue went down; when prices went up to $75 and $79.95, total revenue went up. Demand for the online subscription during those two weeks was price inelastic. But if we isolated the $75 price point and its total revenue and did an Ed calculation comparing it to the $79.95 price point and its total revenue, demand turned elastic: total revenue dropped as if we’d reached a tipping point. More data points from further price testing would be needed to prove we’d reached the point of elasticity, but the test results could be used to set a new price producing more revenue in the meantime. Source: http://www.marketingexperimentsblog.com/internet-marketing-strategy/price-testing-online-subscriptions-04-08.php Follow