Campaigns Are Where Conversion Rates Shine – Moving Beyond Conversion Rates, Part 4

Jared Spool

May 30th, 2012

Moving Beyond Conversion Rates:

Editors note: You can read this in Italian thanks to Marco Dini.

Part 1: Avoid Ratios for Metrics
Part 2: Not All Visitors Make Great Customers
Part 3: Visitors Are Not All The Same
Part 4: Campaigns Are Where Conversion Rates Shine (this)
Part 5: Measuring Money Left On The Table


It was a little magic sticker with an image of a gold treasure chest that changed everything. The brilliant marketers at Publishers Clearing House added the sticker to their newest sweepstakes mailing. All the recipient need do is move it from its backing and stick it on the entry card.

And, millions did just that. Something about taking action and moving that sticker caused more folks to enter the sweepstakes than ever before. The Gold Box campaign was one of the most successful direct mail campaign ever, all because of a little sticker.

Direct mail is where the conversion rate was born. And the Publishers Clearing House Gold Box campaign was the first time that conversion rates really shined. The marketers proved, with clever marketing, you could dramatically increase conversion, which in turn, increased revenues. (Most of their sweepstakes entries also included magazine orders.)

The Gold Box campaign followed a typical direct mail conversion process. Publishers Clearing House sent out a mailer. Any recipient who chose to take part returned the sweepstakes entry and order form. The conversion rate was the number of returned forms divided by the number of mailers sent.

Campaigns Are Where Conversion Rates Shine

Campaigns are the one place where a conversion rate makes sense to measure. Remember, in Part 1 of our series, we talked about how you get into trouble with ratios? Well, with the Gold Box campaign, Publishers Clearing House controlled how many mailers they sent out, so they controlled the denominator. Check.

In Part 2, we talked about how some visitors are not good customers. Yet, when you have a campaign like this one, you can carefully choose who you mail to, so you can make sure everyone is the kind of customer you want. Check.

In Part 3, we talked about how not every visitor is the same. Again, PCH could carefully choose who they sent the mailers to, so they were the same. Check.

Specific campaigns are where we can use conversion rates for what they are good for: giving us a comparison on which variants work. The thing is that direct mail is subtly different from marketing on the web – a distinction a lot of marketers miss.

Let’s take apart the PCH Gold Box campaign:

Start: Send out mailers
Conversion: Recipient sends back entry and order form

It’s that simple.

Now, let’s look at how a similar campaign to give a free trial to a new magazine might look on the web, to a prospective new subscriber.

Start: Place an ad on a web site the prospect might visit.
Conversion #1: Prospect spots and clicks on ad, which brings them to landing page for free trial.
Conversion #2: Prospect fills out form and gets sent the free trial along with an order form.
Conversion #3: Prospect chooses to subscribe.

There are three conversions here, not only one like in the Gold Box campaign. Conversion #3 depends on #2, and #2 depends on #1. You can’t get to the third step without converting through the first 2.

(Some marketers in this situation try to remove the third conversion by making the free trial an “opt out” conversion – the subscriber has to explicitly cancel their subscription before the trial ends instead of having to explicitly choose to subscribe. Of course, this is a dark pattern and shouldn’t be encouraged. However, you can see why it’s so appealing to the marketer, since it eliminates that last conversion.)

This is why campaigns online aren’t as easy to measure as campaigns in direct mail. It’s possible that the a broken #1 produces crappy results all the way through. You have to tweak each step simultaneously, whereas the Publishers Clearing House folks only had one conversion to optimize.

Conversion rates work great for simple campaigns. In the final installment, we’ll talk about alternatives you can use for other situations.


Moving Beyond Conversion Rates:

Part 1: Avoid Ratios for Metrics
Part 2: Not All Visitors Make Great Customers
Part 3: Visitors Are Not All The Same
Part 4: Campaigns Are Where Conversion Rates Shine (this)
Part 5: Measuring Money Left On The Table

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