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Advertising has quite a few disadvantages. To tell millions of people about your product through TV spots, print ads or online advertising costs a fortune. Additionally, consumers perceive advertising as annoying, be it as an interruption of their favorite TV show or as a black hole in their mobile data volume.
The aversion advertising target audiences feel might also be the reason that many advertisers are extremely skeptical when it comes to the efficacy of ad media. After all, the goal of any form of tracking is to prove the effectiveness of specific ad placements. But, at the same time, the ever-growing distribution of the different tracking mechanisms is increasing the concern of many users as to what is being done with the data collected. It comes as no surprise then that an ad blocker quickly rose to the top of the charts after being activated in the app store.
Thus, it’s safe to say that advertising as an essential element of the traditional marketing mix isn’t regarded too favorably.
Fortunately, there is a simple solution for this challenge: instead of investing in intrusive banner ads one should invest in the experience a user of a product has – in other words, in user experience (UX).
The quality of the user experience, for instance of an online shop, is leverage that can be used to directly influence the bottom line. It thus represents a significant competitive advantage.
At first, nothing colors our image of an item as much as the experience we have with it. The more positive our interaction with a person, product or brand is, the stronger its presence in our memory – and the more likely it is that we want to repeat the experience.
In this way UX is a central element of branding. The experience with a product is what delivers on the promises of brand communications and thus even makes it possible in the first place.
Furthermore, measures that improve the user experience also have a direct influence on profit.
If an operator of an E-commerce platform wants to motivate users to buy more, he needs to improve the conversion rate – that is to say, the percentage of visitors who make a purchase must be increased.
In this context, let us consider for example the advantages of improving platform performance. Reducing load time significantly impacts how many users complete the purchase – or cancel the process. When Walmart overhauled its E-Commerce platform the US supermarket chain achieved one percent more revenue for every tenth of a second it was able to reduce the load time. With sales of several billion Dollars annually, a considerable jump.
This effect is also one of the reasons why we at AOE have specialized in high-performance E-Commerce solutions. Not only because we are enthusiastic about powerful technology, but also because a high performance level has a direct impact on the conversion rate – and thus represents a considerable competitive advantage.
However, there are also other aspects of the UX that improve the conversion rate. For example, a clean design helps the user to find what he is looking for. An intelligent search solution also has this effect.
The 113 Design Guidelines for Homepage Usability can thus be understood to be a “How-to” guide for improving the net margin and not merely a nice albeit lengthy dalliance.
By the way, all the measures mentioned are also well-suited to optimize the positioning of one’s portal in the Google search results.
Improved load times, lowered bounce rates, higher visitor frequency. All of these are now factors on which Google places greater emphasis in prioritizing search results, than on the traditional, purchased backlinks, which are now rated more negatively and thus lead to being “punished” by the search engine results. Rather, a large number of positive experiences increases the likelihood that high-quality backlinks are created – by people who report being impressed by the product.
The branding effect also has a direct impact on search engine rankings by increasing click rates within search results lists. After all, a user is more likely to click on the search results of a trusted brand.
We’ve saved the best for last: An excellent UX makes the user happy. And happy users will return, even without being persistently pursued by retargeting banners. They will recommend the product even without loyalty points. Their enthusiastic support of the product has more credibility and is thus far more effective than any TV ad.
So, if done right, an excellent user experience not only leads to a more efficient ad budget – in the long run it might actually make the budget obsolete altogether.
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In the hunt for the best option to understand customer needs, Digital Persona Twins (DPT) emerge victorious for most telcos. What are they? Stefan Rotsch has written a summary for inform by TM Forum.
AOE press releases
More than 13,000 customers trust more than 15 million fast, reliable and secure IoT endpoints to 1NCE across 150+ countries. As the company expands into a complete IoT platform, it has chosen AOE, a leading agile software service provider based in Germany, as its strategic implementation partner.