Thomas Jefferson once said, “Never spend your money before you have it.” Unfortunately, too few of us have followed Jefferson’s advice and have indulged our desires for worldly possessions by using the greatest of all American inventions, the credit card.
Especially during the holidays, it’s easy to throw caution to the wind and use plastic to buy those special gifts for the important people in our lives. Then, before Jack Frost can nip at your nose, a bill the size of a third world country’s GDP arrives and spoils the season’s splendor. It’s then that we relate with poet e e cummings, who has been quoted saying, “I’m living so far beyond my income that we may almost be said to be living apart.”
Nobody knows this tale better than Consolidated Credit Counseling Services, Inc., a non-profit organization founded in 1993 to help families end financial crisis and solve money management problems. Like elves in a workshop, the staff at Consolidated has been working feverishly to prepare for the influx of consumers that will be drawn to their service after the holidays. With all respect to Bernard from “The Santa Clause” (I’ve been watching way too much of the Disney Channel lately), Roger Welch is the Arch Elf at Consolidated, having joined the organization as manager of marketing and Internet systems in June of this year.
Welch’s charge is to focus Consolidated’s online marketing activities and make the Internet an efficient channel for client acquisition. Management at Consolidated hired Welch under the belief that acquiring clients via the Internet would be much cheaper than the traditional marketing vehicles they had been employing: radio, television and magazine direct-response advertisements. Although Consolidated had established a Web presence at www.debtfree.org previously, the site lacked clear direction.
Consolidated launched its first Web site in January of 2000 as an online brochure listing a phone number in order to contact a counselor. In February of 2001, Consolidated’s site added the ability to accept counseling applications. The organization’s online marketing activities, prior to Welch’s arrival, consisted of banner advertisements on MSN, Yahoo and AOL, as well as a few unmanaged key word campaigns with Overture.
The results Welch has achieved in just six months on the job are nothing short of astounding. Before his arrival, Consolidated was generating 80 percent of its clients through offline marketing. The remaining 20 percent of clients were generated through the online marketing activities. Today, Consolidated has doubled the percentage of clients generated through Web marketing initiatives — to 40 percent. Even more impressive, this has been accomplished while increasing the total volume of clients. How did he do it? The answer, as you might have guessed, lies in analyzing customer data.
Welch started by looking at the amount of traffic the Consolidated Web site was garnering. Although he asked me to keep the actual numbers private, it is safe to say that Consolidated was generating tens of thousands of visits to its Web site each week. That was good news, because getting traffic to the site was half the battle. Unfortunately, the rate at which those site visitors converted to applicants was abysmal. Welch knew he had to focus his early efforts on maximizing the value of the existing traffic. He launched a heuristic evaluation of the Web site, beginning with a usability study. The usability study generated three primary recommendations:
- Change the colors and fonts used on the Web site to be friendlier to consumers.
- Shorten the application from 12 screens to eight.
- Rearrange the order in which information is collected from applicants.
These relatively simple changes led to a nearly four-fold increase in the percentage of visitors that converted to applicants. Again, Welch asked me to keep the actual results private, but did authorize me to report that the percentage of visitors that converted to applicants went from mid-single digits to double digits. Now that Welch had optimized the Web site to generate applicants, he was set to increase traffic to the Web site.
Welch analyzed the Web logs to gain an understanding of the ability of the online marketing vehicles being employed to generate visitors that converted to applicants. What he found was that the banner advertisements on MSN, Yahoo and AOL generated traffic that had a low propensity to complete an application. Conversely, visitors that came to the Web site from search engines had a high propensity to complete an application. It was clear to him that consumers finding the Web site through a search engine were proactively pursuing a credit counseling service and were therefore more likely to complete an application. This stood in sharp contrast to a consumer that passively came across a Consolidated banner advertisement, clicked on the banner and then left the Consolidated site without completing an application. Therefore, Welch focused his budget and energy on search engine marketing.
The focus of Welch’s efforts was optimizing keywords and placement. He and his staff came up with a list of 1,000 possible keywords. They then pared this list down to the 200 keywords that they felt most accurately related to their business. Welch then tracked the results of buys on these keywords to determine which keywords generated the highest percentage of visitors that completed an application. Once Welch felt he’d done enough testing to generate valid results, he and his team divided the 200 keywords into three groups — top performers, middle performers and bottom performers — based on the percentage of visitors that completed an application. Welch found that the top performing keywords were up to 20 times more expensive to purchase than the bottom performers. Paradoxically, it was more cost effective, in some instances, to purchase keywords classified as bottom performers than to buy top performers.
The fruits of Welch’s labor are undeniable. In less than six months on the job he has increased the average weekly traffic to the Consolidated Web site by over 50 percent, increased the percentage of visitors that convert to applicants nearly four-fold and lowered Consolidated’s cost per acquisition by 58 percent. He’s been a busy elf. Santa must be proud.
Hopefully this column will be as close as you get to a credit counseling service anytime in the near future. Remember the words of Benjamin Franklin, “Think what you do when you run into debt; you give to another power over your liberty.” Best wishes to you and your family during the holidays.
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