If there is something every business owner should do and could dramatically profit from it, then it would be A/B Testing or Multi-Variate Testing the required step for Conversion Optimization.
Conversion Optimization was pioneered by Amazon and also applied by Dan Siroker in the famous 2008 Obama presidential fundraising campaign. And ever since the books of marketing changed for good.
You decide to design your website and need to put a call to action button. What color should you use Red or Yellow button? How about Green or Purple?
No one knows, not even the artist or the designer.
Conversation Rate optimization works as follows: Say on a given Week you have 1000 visitors to your website. You split the traffic 50/50 Group A 500 visitors and Group B 500 visitors. You do not change anything in the web page content other than button colors.
You show Group A the Red button and count how many out of the 500 visitors clicked on the Red button
You show Group B the Yellow button and count how many out of the 500 visitors clicked on the Yellow button.
Say that from Group A, 83 visitors out of 500 clicked the Red button, and from Group B, 119 visitors out of 500 clicked on the Yellow button.
The conversion rate for the Red Button is calculated from Group A is 83/500 = 17%.
The conversion rate for the Yellow Button is calculated from Group B is 119/500 = 14%.
remaining 500 the yellow button
How did Obama raise so much money and win the 2008 election?
The event was one most spectacular use of statistics for marketing - it changed the fundamentals of business optimization.
The 2008 Obama Presidential Campaign has become a famous example of how conversion rate optimization can help businesses, organizations, and even political candidates accomplish their goals.
From a product mix point of view, the campaign had
During the campaign, Dan Siroker, the founder and CEO of Optimizely, was serving as the Director of Analytics for the Obama Campaign. He proposed that different headline and image/video combinations should be tested to see which one was the most effective at getting people to sign up for the President’s e-mail newsletter.
The campaign team knew that a large percentage of people who sign up would end up supporting the President financially, but the trick was getting the most people possible to sign up for the campaign newsletter.
Dan’s team ended up putting together 24 different variations with four button options, three images, and three videos. Interestingly, most people on the team assumed the videos would be the most effective at getting people to sign up.
Image of President Obama's campaign slogan from 2008, "change we can believe in".
This is a screenshot of the winning variation from Barack Obama’s 2008 successful presidential campaign.
So what was the result? After testing with 310,382 visitors with each variation seen by around 13,000 people, the version with a picture of Barack Obama’s family and a “Learn More” call-to-action button led to a conversion rate of 11.6% for the winning variation, a 40.6% increase over the original conversion rate which as 8.26%.
Even more impressive than the increase in conversions from the winning variation is the fact that the new version let to approximately 2,880,000 additional sign ups, 288,000 more volunteers, and an additional $60 million in donations over the course of the campaign.