Where’s the sizzle?
What’s the hook?
I’m
sure that you’ve heard at least one of these
questions. In the vernacular of most web and
advertising designers these questions refer to
how an ad or web site will capture the attention
of the visitor. It is “generally” understood
that the ad (or your web page) must capture the
visitor’s attention within a few seconds or
they are off to something else.
In
the specific realm of web sites this need for
“sizzle” or a “hook” has lead to some
very spectacular sites… with jumping and
flashing copy, animated text and graphics and
sites that require a special “plug in” to
view. It has also lead to pages that contain
hundreds of individual sections and links. All
of this is in an effort to “capture the
attention” of the site user.
However,
there is far more to creating a customer than
flashy graphics. To understand this we need to
look at the “requirements” for any action
(including a purchase) to occur.
A
transaction is an exchange of value (i.e., money
for a product) between two or more entities. A
transaction on your web site also includes
initiating an action on the part of the user.
The site users “time” has value. When a user
“spends” his time to initiate an action on
your site, a transaction has occurred. The user
has exchanged their time (value) for a benefit (the
information they receive).
For
any transaction to occur there must be a
“perceived” value by both parties. As a
business owner you offer to sell a product or
service for a price that you feel reflects
it’s value. As a customer you make a purchase
when the “value” of the product or service
is equal to or greater than the cost. The point
where these two overlap is referred to as the
“transaction threshold”… the point where a
transaction is possible.
This
article will provide you with the basis for
measuring the “transaction threshold” of any
section of your site and of the entire site. This
ability to initiate transactions determines the
effectiveness of your web site.
To
be measurable, we must find a way to translate
this transactional threshold into a mathematical
concept that we can use to measure each of the
transactional ingredients. There is no
methodology to accurately measure a
relationship. Instead we have to look at
relationship simply as an unknown value. Using
this unknown value in a formula where we do have
other, reliable, values will allow a reliable
measurement.
The offer –
Transactional Incentive
On one side of the “transaction threshold”
is the offer. We also refer to this as the Transactional
Incentive. As a business, everything you
do goes into creating the offer. The offer is
defined by your relationship with the customer
and the incentive your service or product
offers... all of the benefits that go along
with the purchase. The incentive generally
includes the product and the physical and
emotional results of having the product.
All
transactions are based on a shared
“relationship” between the entities involved
in the transaction… if there is NO
relationship a transaction is impossible.
Relationships grow from a combination of two
simple concepts.
The
first is trust. There must be a trust (by all
parties) that each will keep their word and
provide a fair representation of their intent
and then act accordingly based on that intent.
Everyone understands this concept. If you have
no trust in the person (or business) you are
doing business with, it’s difficult, if not
impossible, to finalize any transaction.
The
second, emotional context is not as commonly
understood. Without it, however, there is no
relationship. Emotional context is the
interrelated emotions that exist within a set of
experiences. This is the level of emotional
attachment (positive or negative) created by all
interactions with your business. This includes
the visitor's interactions with your web site.
The moment you
walk into a store your “emotional context”
begins to form. The floors are clean, the lights
are bright and products are neatly and
pleasantly displayed. Score a positive emotional
context. Add a little pleasant music, friendly
and courteous sales people and the positive
relative experience increases. There are two
customers yelling at each other in the isle.
Woops, the positive relative experience
declines. Every aspect of your “interaction”
with a business increases or decreases the
emotional context.
The
following formula is used to “predict” the
relationship level between any two entities.
Simply put, the shared level of trust and
emotional context between transactional parties
defines a mathematical representation of the
relationship.
The second aspect
of the offer is incentive. Incentive is all of
the logical and emotional reasons to purchase a
product. It is generally referred to as the
“benefits” of having the product or service.
The following illustration shows how the two
components of an offer create the Transaction
Incentive. The transaction incentive does not
have to be a balance of relationship and
benefits/features. You may have very low trust
with very high benefits. It is the combination
of the relationship and the benefits, in
whatever ratio, that sets the transaction
incentive.
The Transaction
Incentive is represented by the following
formula. Again we are working with a value that
is impossible to accurately assign a numeric
value so we represent the value simply as a
formula.
Customer
Requirements – Transaction Requirements:
On
the other side of the transaction threshold sits
the customer requirements. These
requirements are made up of two primary
components: Need and Relationship.
Relationship
is the shared level of trust and emotional
context between transactional parties. The
relationship and need levels do not have to be
balanced. For instance the illustration below
shows that you can have a strong relationship
and a low need (illustrated by the red dot in
the illustration below) or a weak relationship
and a high need (illustrated by the green dot).
An example of this is any “get rich quick”
scheme. The “perceived need” is extremely
strong in one market segment. Although the very
nature of the offer from an unknown source
creates low trust the perceived need (the
possibility of getting rich quick) is very high.
We can represent
the transaction requirements with the formula
below.
Defining the transaction
threshold:
The figure below
illustrates the transaction threshold. When the
relationship and requirement needs of the
"buyer" are less than the relationship
and incentive provided by the "seller"
the transaction threshold is reached and a
transaction occurs. In the formula we have been
building, the transaction threshold is where a
sale or action takes place. I.E., TT
(transaction threshold) = Sale or Action.
To
this point we have used theoretical measures
that cannot be applied to any real numbers.
There is no way to accurately measure either the
level of Purchase Incentives or Purchase
Requirements in any concrete terms. We can,
however, predict that if the purchase
requirements of any buyer are less than the
purchase incentives of any seller (i.e., the
value of the product and relationship is greater
than the cost), a purchase will occur.
Theoretically this
may be interesting by what good does it do us?
In the next section we will look at how to use
these concepts to create a simple measure
of the effectiveness for any
transactional-based section of your web site.
Measuring the
Effectiveness of a Web Site:
We
may not be able to directly measure the
relationship, benefits or needs of either our
business or our customers. However, this
information gives us a way to accurately
determine the “relative effectiveness” of
our business (or our business web site or any
transactional based section of the web site).
First,
we KNOW that every “visitor” or “potential
customer” has a Transaction Requirement.
So, we can assign every visitor a mathematical
value. Since we don’t have a measurable value
for any individual visitor we will assume that
each visitor has a default value of one. We can
now assign TR (transaction requirement) the
value of one times the total number of visitors.
TR
(Transaction Requirement) = the Total Number of
Visitors
We can also assign a value
to the Transaction Threshold by assuming that
every completed transaction reached the
Transaction Threshold. If it didn’t a
transaction would not have occurred.
TT
(Transaction threshold) = Total number of
completed transactions
We can now use these values
to create a ratio of TT to TR to indicate the
relative effectiveness of our site.
TT
divided by TR = TI
(Transaction
Threshold) divided by (Transaction Requirement)
= (Transaction Incentive)
We can use this formula to
tell us the relative effectiveness of our
business, site, advertising or any action based
transaction. For instance:
100
sales (TT)
divided by
1000 visitors (TR)
equals
.10 TI (or effectiveness of our TI to create a
purchase)
If the purpose of your site
section is to get visitors to sign up for your
free email newsletter the results may look
something like this.
50
- newsletter registrations (TT)
divided by
2000 - visitors (TR)
equals
.025 - TI (or effectiveness of our TI to create
an action)
For a web site this means
that you no longer have to guess which elements
of your web site help it’s effectiveness and
which elements don’t. For instance, if you
make a change to your web site and your TI
rating increases, you have made a positive
change. If not, change back and try again.
Just
as importantly, however, this measure can be
used to determine which parts of the site are
contributing to your total TI. For example, you
can track the number of visitors who make a
purchase after looking at your online brochure
compared to those who do not look at the online
brochure. If the TI is higher after looking you
may want to emphasize the links to that part of
your site and create direct links from there to
the section where a purchase can be made.
If
you are operating a catalog, you can determine
which product descriptions need to be improved
by tracking TI for that particular product.
Number of visitors viewing that product detail
compared to the number of people purchasing that
product. This will help define which products
are poor sellers because the market for the
product is smaller and which are poor sellers
because our TI is less than effective.
The
purpose of just about everything you do in your
business should be designed to encourage a
potential customer to cross a transaction
threshold. From the hours you keep to the décor
of your store and how you merchandise your
products… everything about your business
should be designed to increase the trust and/or
emotional context… to give potential customers
sufficient reason to cross the transaction
threshold. Remember, there can be no transaction
if the customer does nothing.
The
same goes for your web site. An effective web
site should be designed to help guide a site
visitor over the transactional thresholds to
become a customer. To do this, we employ five
basic requirements in our web site designs.
• Alignment – the web site design must be aligned with
your business goals. The most basic of these
goals is to make a profit. Each section of the
site must be focused on helping you reach at
least one of your primary business goals.
• Purpose – each section of the web site (each page,
in fact) must have a primary purpose… What do
you want the page to accomplish? This purpose
should be viewed in the light of alignment
(being aligned with your business goals) and
moving the customer toward the purchasing
threshold.
• Create Action – Each section of the web site must
clearly indicate the action you want the
customer to take… What you want them to do?
Remember, you cannot increase the effectiveness
of your web site if the visitor does nothing.
• Relationship focused content – The content of each
page must be targeted to increasing trust and
creating a positive emotional context. You must
always think of your content in terms of how
well it increases trust or builds on a positive
emotional context.
• Measurement – Each section of the web site must be
measurable. Without measurement you cannot know
whether any change to your site improved or hurt
the effectiveness of your site. How do you
know you’re getting better if you don’t keep
score? Effective measurement tells you if
your web site is helping you meet your business
goals.
These
five requirements of an effective web site form
the basis of every web site we design. Each
provides a unique piece of the puzzle that, as a
whole, almost forces a web site to be more
effective. Combined with an understanding of the
transactional threshold these five requirements
give you a sound foundation on which to base an
effective web design.
Transactional
Threshold tracking is not rocket science. In
fact, it gives you a very easy method of
measuring the success of your site. All you need
to know is what actions you want your site
visitors to take. The Transactional Threshold
formula tells you immediately how well the site
is performing.
© 2003 – Web
Transitions, Inc.
|
