Startup entrepreneurs are fueled by ambition. They often want to grow as quickly as possible, and that means relentlessly marketing the business and flexibly adapting to new information. Growth hacking depends on your ability to make changes to your marketing and sales strategies on the fly, gradually inching closer to a “perfect system.” And at the center of that system is a solid conversion optimization strategy.
Simple in theory but complicated in practice, conversion optimization is a cornerstone of modern digital marketing. It’s broadly discussed, widely accepted as important, and constantly researched in new light.
Despite all of this, conversion optimization remains poorly understood and inappropriately executed by startup entrepreneurs everywhere.
So what are people getting so wrong about this otherwise solid strategy?
What Is Conversion Optimization?
There’s nothing inherently wrong with conversion optimization. On the contrary, it’s a practical necessity if you want to generate leads and sales on the web.
Conversion optimization is a collection of different tactics all intended to maximize your conversion rate. Your conversion rate is the number of people who eventually “convert,” or achieve some meaningful goal on your website. For example, this conversion may be purchasing a product, filling out a form, downloading a whitepaper, or even watching a video.
By changing the layout of your landing page, improving your offer, and tweaking visual elements of your work, you can gradually increase your conversion rate. That way, if you maintain a steady stream of traffic, you’ll eventually land more paying customers – and if you increase your traffic stream simultaneously, you’ll achieve tremendous overall growth.
Sounds straightforward, right? So what are startup entrepreneurs getting so wrong about this strategy?
The Missing Link
Spend a few moments searching for information about conversion optimization or listen to an entrepreneur’s webinar about how they were able to double their conversion rate. What types of advice and insights do you see?
Chances are, you’ll see a lot of people claiming that a handful of simple tricks are all it took to boost a conversion rate. For example: “After changing our ‘Submit’ button from green to red, we instantly saw 30 percent more conversions!” or “All we did was change the font size, and our conversion rate tripled.”
These stories get a lot of attention, as well they should. In many cases, these results are impressive, and we have no reason to doubt their validity. But there’s a problem with what they imply and how they’re interpreted.
Essentially, what we have is a persistent echo chamber in the world of conversion optimization. There are dozens of influencers and thousands of individuals claiming that they all have the “one weird trick” responsible for making your conversion rate explode, especially now that artificial intelligence is given more credit than it deserves.
Why is this a problem?
For starters, there’s no surefire way to increase conversions – at least not with some minor aesthetic tweak like changing the font or the color of a button. Changing a button from green to red might double the conversion rate of one business by half it for another business. Or it might not have any measurable effect whatsoever.
Additionally, these articles typically underestimate the role that experimentation plays in conversion rate optimization; it’s not necessarily about brainstorming the perfect setup or following inspiration from someone else’s work. Instead, it’s about constantly AB testing and experimenting with new approaches to see what sticks.
The downstream effects are:
- Entrepreneurs overestimating the ease of conversion optimization. First, all these articles make it seem trivially easy to practice conversion optimization. A marketer writes about how in 20 minutes, they were able to tweak their landing page enough to double their conversion rate – but in practice, things are rarely this smooth or straightforward.
- Fixation on minimally impactful changes. Many of these types of articles focus heavily on very easy, small-scale changes that can presumably boost your conversion rate. And there’s a reason for that – they want things to look easy so they can get a lot of attention. Content doesn’t get popular if all it does is tell you that you need to work hard. But the downstream impact is that entrepreneurs tend to overestimate the significance of minor aesthetic tweaks.
- Prioritization of specific changes, rather than a general approach. It really is true that changing the color of a button or the placement of an image can boost your conversion rate. That’s not a lie. But these changes, individually, don’t make for a good conversion optimization strategy. For that, you need to have a good high-level strategy, focused on ongoing experimentation and improvement.
Reliable Tactics to Increase Conversions
You’ll likely see minor changes to your conversion rate when you do things like tweaking the copy and changing your fonts. But you’ll see much more of an impact on your conversion rate by changing the “big-picture” items related to your landing page.
- The funnel. Where is your traffic coming from, and who are these visitors? If you aren’t attracting the right demographics, any positive influence on your conversion rate will be minimal, and you’ll be missing out on the true potential of your strategy. You need to focus heavily on securing a strong flow of traffic and filtering that traffic so only the most qualified people end up visiting your landing page. With better, more qualified visitors, your conversion rate will be higher – no matter what colors you choose to use.
- The offer. Conversion is typically an exchange. People pay money to receive a product, or they volunteer their personal information to download a whitepaper. An easy way to increase your conversion rate is to make that offer more attractive in some way. Can you offer a free gift to complement the purchase? Can you write a more compelling whitepaper? If you gave away a $1,000 Amazon gift card in exchange for a name and an email address (assuming you could make yourself seem trustworthy), you could achieve a conversion rate nearing 100 percent. Your job is to figure out what the right balance is, and what type of offer will be most appealing, given these demographics and circumstances.
- The conversion flow. How easy is it to convert? An attractive, well-designed landing page is nice, but if it’s a pain to get through the checkout process or fill out your forms, you’re going to lose your audience. Improving the “conversion flow” is critical to your success.
- Follow-ups. Conversion rate isn’t just about who completes this action the first time they visit your page – it should also be about securing more conversions in the future. A good follow-up strategy, like remarketing, can help you capture some of the potential conversions you initially lost.
Subjective Conversion Optimization Strategies
Of course, none of this is to say that minor aesthetic landing page tweaks can’t be helpful. There are many other, smaller variables to consider, including:
- CTA placement.
- Images and videos.
- Reviews, ratings, and testimonials.
- Trust badges.
The point is to spend more time focused on bigger, more impactful changes and experiment, rather than assuming what will work.
What Are the Takeaways?
So what are the key takeaways?
For starters, don’t base your entire conversion optimization approach on the findings of an anecdotal article on the internet. The tips these marketing influencers provide may very well be based in reality, but they may not have the same benefits for your company, and they may not have as much of an impact on your conversion rate as other, higher-level changes.
If you want to achieve more conversions and make your business successful, you need to have the right philosophy related to conversion optimization. You need to be willing to make changes and run experiments regularly to inch toward perfection. And you need to spend much more time on big-picture changes than minor aesthetic tweaks. Do that, and you’ll be in a much better position to get the conversion rate you want.
Fintech Kennek raises $12.5M seed round to digitize lending
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Fortune 500’s race for generative AI breakthroughs
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
UK seizes web3 opportunity simplifying crypto regulations
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!