Valentin Radu - The good, the bad, and the ugly

Where is the pointer? There. Right? The pointer is there. Hello there. It's the first time that I'm speaking in such a large hall. I'm sorry, I was just wondering how would it be to be full? You know, I mean, I. I would be like hiding somewhere in the corner. So. Yeah, that being said, hello everyone. Or Dobr den. It's not Dobrevecher, because he told me that it's not Dobravetture here. Right. Okay. So I'm Valentin Radu and a few things about myself. I'm running conversion rate optimization experiments since 2011. I founded four companies so far. One, two exits, one fail. I mean, you live, you learn, right? And one going strong, which is called OmniConvert. And I'm also the writer of a book called the CLV Revolution, like the Customer Lifetime Value Revolution. So that my intention, so that we're making things clear from the very beginning, my intention here is to give you shortcuts because I've been working with a ton of E commerce companies. I'm a former E commerce entrepreneur myself. And basically my intention is to come from this presentation with insights that you can apply in your real businesses. So basically, in the last years I've dried my mouth talking to the world, let's say, about what does it mean to do customer centricity? What does it mean to focus on your customers instead of focusing on the money? Because I've been a poor kid myself and I know that if you don't provide value to the world, then you can't get the money that you're after. So we have this oblique thing, like when you're playing billiard, you know, with that. So you need to go like this in order to go where you want to go. So that means we are not here to focus on metrics, to focus on something else. We are here to understand how to treat our customers in order to deliver more value to them. So let me tell you my first experience, it was 1997. So I have started to understand conversion rate optimization. So it was in 1997 and I wanted to go to the seaside with my new girlfriend. That's actually. We don't have a beach such as amazing as yours, by the way, even though we are sharing the Black Sea. To be honest, I'm coming to Bulgaria way more pleased than in Romania. But don't tell this to my Romanian friends. Yeah, so I got a temp job back then. So imagine 17 years old, I got a girlfriend and I wanted to persuade her and to have enough money to take her to the seaside to cost Inesht. That was the name. So I got this temporary job selling cookbooks on the street. And this guy, Petri Shorit, used to be a real deal, you know, I mean, he used to be like Jamie Oliver in Romania back then. So the problem that I had is that I couldn't sell these freaking books. So in the first day, I sold zero books. And I talked shy, you know, to a few people, like 23 people, my conversion rate was 0%. After a whole week of being so persuasive, you know, because I got there and imagine, I mean, look at me. I'm not like, I don't know, you carrying those freaking books, which are heavy. When I was, like, basically smaller than I am right now, when I was 17, it wasn't a good task, right. So I talked to 218 people, and I sold only one book, which was for a neighbor which felt sorry for me. So she said, okay, I'll buy it, you know? And so basically back then, my conversion rate was like 0.46%. And I don't know if something happens. Yeah. So after that moment, the struggle convinced me to. This is off, by the way. It's not working. So the struggle convinced me that I have to change things. So that was my aha moment. Because every time in life, we're not changing unless it hurts, unfortunately. Yeah. So I had to change my ways. And the thing that I've changed was the location, first thing. So I've changed it from everywhere to the bus stations because people couldn't run from me. I mean, they were expecting the bus, what they could do. They were sitting there waiting for the bus. Then I've changed the targeting from everyone to old ladies or mothers with their kids because they couldn't run as well. I mean, they were with the kids waiting for the bus. So the next one, we've changed the hook. So. So the hook was before that. Do you know Petri Shortanass, that thing. Do you want a cookbook, too? What if you could be the best grandmother? So basically, I've changed this as well. And basically after that, I freaking sold those books like it was that simple. So that reached to a 1.3% conversion rate, and that taught me that I could go to cost in. It was a breakthrough for me, believe me, because I could make it. And I also understood the principles of the conversion rate. But I can't post the picture here with my girlfriend. We were wearing these Mexican hats, like this. Very happy on the. On. On the beach. So These are the principles of conversion rate optimization. You have to change those kind of things. And we, I'm, I'm here to, to help you learn how to do this in your own e commerce by showing free stories before that. What is the capital seen in E commerce and is focusing on the wrong things. Yeah, because if you don't focus on the customer needs and that means you're not focusing on what matters which are the dominant numbers and that means you're not focusing on what's causing the profit to happen. So if we are hypnotized about ctrs and cpcs and we are not focusing on these things, we are wasting our time. And I want to showcase this by telling you the story. I've heard this and I think it's amazing for us if you want to tame a lion. So back then when people were taming the lions and keeping them in the circus, they had three tools. They had a whip, they had a gun, and they also had this chair, you know, like a four legged chair. And what was the most used instrument? You think? So who's for the gun? Being the most used? Raise your hands. Guys, don't let me talk here. So do you think it was the gun? It was the gun. The most used tool to tame a lion. Who's for the gun? Nobody. Who's for the. You're with the gun? Yeah. Who's for the whip? You know the whip. Okay. And who's for the chair? Okay, so, and so, so yeah, you know the story, right? So the chair is the problem because imagine the lion, which is such a big animal. So the, the lion tamer was sitting on this small chair and when the lion was like this, he put this chair in front of the lion and the lion started to look at the first leg, the second leg, the third leg, the fourth leg and then he got down. Because there is such amount of focus that you can use, so you can't have enough focus to focus on all of those things. And that's exactly what's happening in E commerce. You're focusing on a lot of metrics and you end up being depleted. So you don't have the energy for the things that matter. And growth, it doesn't mean growth generating factors. And there is this simple formula like revenue minus cost equals profit. Right? So everybody knows that. But if we look below that we will understand that in order to produce this revenue we have the orders and the average order value leading to the revenue behind the order. So one level down is the traffic multiplied by the conversion rate. So basically you have this type of metrics which are leading to the profit. But if we go below one level, then we will freaking understand how an E commerce works. Because there are these things which are below what's happening that matters. So there is this traffic multiplied by the conversion rate leading to customers and then we have the customer retention, we have the purchase frequency, we have the average order value and the gross margin. So most people are not focusing on things that matter. So the average marketers, they focus on traffic, conversion rate, customer acquisition cost and average order value. The good marketers, they also focus on the gross margin. But the great marketers, they focus on purchase frequency and the customer lifetime value. So if you're not focusing on these things, you're not a great marketer. So let me give you an example. How many of you know this brand? Do you remember this brand? It was like seven, eight years back. No, we were younger, we had less gray hair. It was called Koketa. They have like 90 employees. It was a brand starting from here, from Sofia, from Bulgaria. They were present in 11 countries. 90 employees, pretty good company. But back then, before I met them, they were tracking things like the revenue, the profit and the year over year revenue. So that's what's going on. Their priorities were like this as everyone, let's change the E commerce platform because it's not good enough. Let's change it because that's why we are not selling. Yeah, let's fix the roas in Facebook ads and let's find the new warehouse. Those were their thing. Their initial symptoms when I've started to look at them were these ones, they were actually growing double year over year. So their revenue was double. Their customer retention was less than 20% and their year over year customer lifetime value was less than last year by 20%. And last but not the least net promoter score was less than 40. How many of you are tracking these things, by the way? How many of you are tracking nps? How many of you are tracking lifetime value? Just okay, so basically these are important metrics to track. Yeah, the problem with them is that after we've started to work with them, they started to track these kind of things. So their conversion rate was less than 1% net promoter score, they were not tracking it. And customer retention and lifetime value, they were not tracking it. So they were not even aware that they are ill. You know, their top three priorities, after we analyzed their data changed completely. So your priorities are changing when you look at the right figures. Right. Higher customer retention rate was their first thing Higher end PS was the second and improving their merchandising because they had a high return rate because there were a fashion brand was the last one. So the principle here is that for many events 80% of the effects generate 20% are generated by the 20% of the causes. Yeah. This is coming from Vilfredo Pareto. You can see my canvas skills here, right. I put that hat myself on on Canva. So this guy stated something important. Not all the customers are created equal. So any company on this planet, they need to acquire the best customers. There are these ideal customers that we should be after. We should be understanding who are our best customers. Called the icp. Yeah. For instance from our data. From our data, yeah. One ICP can generate margin as much as 376 low value customers. So it's not smart to treat everyone the same. And why this figure is so high is because we pay the customer acquisition cost to all the customers. Then on the first order we are not making too much margin. And then we do have customers that continue to buy over and over again without clicking on those ads. So that eventually leads to a large net margin for the business. So those are the customers that you should be after. So all in all the bad story of this company is that is not here anymore. They've basically finished their activities back in 2019. Another story, this is the good story of Leromela. They are a major player. I don't know if they are in Bulgaria or not. They are like more than 100 years old company. They have more than 500 stores, a lot of employees. So before starting to work with us, that's how their product page was looking for. Right. So if you would be zooming in, that was their website. After working with us we've started to do this type of call to action, started to improve it on the mobile as well, on the desktop as well. So basically once we've started to improve it through a B testing to improve the conversion rate, they've got to 14% uplift on the conversion rate on the desktop and 18% on the mobile. That also led to a 40% uplift in the revenue per user for desktop and 37% revenue per user on the mobile. So basically if you change things, you could have other results. If all you do is changing the I don't know those sliders, you know, those ctr, those CPC on Google Ads. If what you are changing is not on the website, which is the most important channel for an E commerce, then you are not doing the right thing. Another example Here, that's how their, let's say ads to basket works. Yeah, that was before improving it and that was after. Right, Like a thing. Like we've added this. That's how much you're gonna pay for it. That's the quantity. Go and finish the shopping. So basically that led also to an uplift of 16% on the conversion rate and 24% revenue per user. What it's also important is that the chance to win it was 99.7%. So the chances that this was a relevant statistically significant experiment was 99 were 99.7%. Another example, that's how we. There, you see this long page here? You do have that as well, right? You have to scroll down like this. By the way, my kid told me that there is a statistic that the kids nowadays, they do eight miles per day, per week. Sorry, eight miles per week with this finger. So, yeah, that's how the website looked as well. So basically what we did, we've started to do surveys to understand who are the best customers, then what are the best customers looking for on their website. And then we prioritize the things that matter. So instead of leaving those below, we've added it on the top of the page and that led to 10% uplift in the conversion rate with a 95.5% chance to win. So why does it happen like this? Because we are irrational. Right? So according to this guy, Amos Versky and Daniel Kahneman, which unfortunately passed away two weeks ago, he stated that we are irrational and that's a good thing. And they've made this experiment on some people. They've positioned the treatment like this. They've made this experiment. 600 people got infected with the deadly disease. Treatment a, we've had 400 deaths. Treatment B, 200 deaths. And each treatment was presented in a positive or negative frame. For example, with the positive frame, save 200 lives. With the negative frame, 400 people will die. So that led to a 72% conversion rate when it was framed positively versus 22% conversion rate when it was framed negatively. So that means the framing. So how we say the things, how we present the facts is crucially important. So we have to stop chasing for discounts and vouchers and whatever. And we need to change our words and the way we present our offer. And this is called the framing effect. This is a cognitive bias that states that we people withdraw different conclusions from the same information depending on how that information has been presented to us. So that's the cognitive bias. So this process. For instance, we are doing it like this. We do the research and then we do the hypothesis because we've noticed X, then we will do Y with the hope to Z. And then in the step three, we do the strategy and the prioritization. Then we do the ongoing experimentation. For instance, we have this alliance with Stanik which is here in Bulgaria. They do the implementation of the experiments and we do the thinking and we provide the technology to do this type of A B testing. And at step five, we learn from the losing experiments and of course we implement the winning experiments. Yeah, that's how it works. So let me tell you the. If you want this success story, by the way, you can get it from here. You have like a QR code and you can see again my canvas skills over here. Yeah, you can notice them. So you can download this to see more insights from that success story. And the last story that I have to share with you, this is the bad story of Rockstar or original. We used to work with them and it was very hard because all they were doing was discounting. Yeah, 50%, 40%, 20%, 80%. And that was their website one week ago. Yeah. And that, by the way, that is their traffic in the last two years. So that's what we are doing. If you keep on discounting like crazy. Yeah, that's very bad. So you don't want to ruin your margin in order to have some, some sales on the short term. So a few things about ourselves. I'm Valentin. This is my company called OmniConvert. We are doing a lot of things. We are empowering e commerce and retailers to make more money. In a nutshell. So we do have an experimentation suite which is allowing you to do website experimentation. We have a customer experience suite which is allowing you to track the customer experience throughout the customer journey, to monitor even the employee performance. Based on the nps. We allow to do customer engagement. So you build audiences based on your best customers to lower your customer acquisition cost. And then we allow you to measure what matters. So it's like having the entire data at your fingertips without asking for it from, from everywhere. We are working with a lot of amazing companies. I'm not going to brag about it. I'm also building. We've built the CVO Academy which stands for Customer Value Optimization Academy. We teamed up with A level instructors and experts like Bob Mastab, like Carl Gillis, like Dennis Yu. We have a free course. So if you go on that link, you can get two hours of free content just for yourself to learn these kind of things because if you don't learn, you will have the same destiny. Right? So that being said, we have like a guy which states that this is better than the CXL training. And I also wrote a book, it's called the CLV Revolution. You can find it over here. Amazing. People like Neil Hoin, which is the chief measurement at Google, stated that it's a great book. Daniel McCarthy as well. So basically my whole knowledge that I've accumulated in E commerce in the last 17 years, I've put it in this book. It was a hard thing to do. It took me like one and a half years to do it. So you can find it there or you can find it at our booth over there on that line. My colleagues, which are dressed like they look like doctors because that's another framing bias. You can find them. And that was it. Thanks a lot. And yeah, if you want to connect, you can find me on LinkedIn. I have four more seconds. Goodbye. Thank you. Thanks. Thank you.