Newsletter Articles

Sales vs. Profit Mentality

You wouldn’t ask a neurologist to perform open heart surgery or an electrical engineer to design a bridge. But many expect just that from advertising and website design experts. In reality the two focus on different factors that yield different results. Consider the chart below outlining the inherent differences between advertising and design:

What undermines more advertisingemail, or promotional campaigns isn’t the budget or message, it’s the underperforming site design. Despite conventional thinking, success is not measured in hits, but in sales conversions, increased productivity, or other measurable metrics.

“A black cat crossing your path signifies that the animal is going somewhere.”
Groucho Marx

Too often, people read into things, make illogical predictions, assume outcomes, bet on unfounded hunches when there’s evidence to guide decisions. Consider a recent retail client’s path to increase their site’s income from one of their products. Average monthly figures: 1,200 hits and $300 net income from a conversion rate of 6.8%.

They first engaged an ad agency to implement an advertising-centric strategy to increase hits. The ad campaign (and very minor page copy changes) successfully
increased hits by 32%; at the same time the conversion rate dipped to 4.7% resulting in a net loss. The clients considered doubling their ad budget. Fortunately they didn’t and turned to us for help instead.

We’ve recognized these patterns when working with clients:
1. Objectives are based on assumptions (e.g. hits = sales)
2. There’s a default to budget for advertising (vs. fixing the user experience on the site)
3. Decisions are guided by incomplete data (e.g. measuring the wrong things)
4. Most sites underperform (e.g. inefficiencies are being ignored)

To break their “spend and hope” cycle, we helped them look at their site metrics differently. It started with how objectives were set and pursued. The result after revisiting their stats and conducting A/B design tests (and no advertising): 1,300 unique visitors and $1,200 in profits. Conversion rates jumped to 10.4%.

In a nutshell this client had originally fallen into the pitfall of measuring the wrong things and tracking superficial metrics like hits. Such metrics make people feel good because they are easily accomplished, but they don’t achieve the ultimate goal. This incomplete site strategy suffers from what Norm Brodsky may call the sales mentality: pursuing sales without minding more important factors, namely profits.We instead focused on actionable metrics, such as conversion rates, to employ a profit mentality.

Not only was there financial gain from our work, it’s a cheaper endeavor vs. advertising. Building a better page design with SEO-friendly code is a one-time expense. Performance is not dependent on ongoing media budgets or retainers.

There’s no denying that people enjoy voicing opinions, but that can be costly when making design decisions. Each doctor and engineer has deep expertise in a narrow discipline, but just an opinion outside their field of study. Our deep expertise, guided by Design Analytics, helps you make better design decisions about improving your site’s performance. It saves you from misguided objectives and incomplete information that can undermine your pursuits.

No comments yet.

Leave a Comment

Remember to play nicely folks, nobody likes a troll.