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/