02 Jan Uncovering Revenue Opportunities for Ecommerce Retailers: How to quickly assess analytics to identify new strategies and tactics
This post uncovers how I think about any retail business to uncover immediate revenue growth opportunities. I’ve found over the past 13 years that most of our competitors are just not great at the basics, or they are great in one area but not well rounded. It doesn’t make them bad people, but the reality is our industry has roughly 10% of companies that are able to deliver a true ROI consistently and 90% that are learning on their clients dollar. Here are the steps that I follow to assess strategy and ROI.
Step 1: Assess the core metrics that matter
For an ecommerce retailer it will be conversion rate and average order value. the third is traffic or unique visits. If you have a 10% conversion rate but no one is visiting your site you’re not making any money. Metrics vary from industry to industry but we generally use 2% as a conversion rate as our goal. If you’re selling something with an average order value higher that $100 that that may not be realistic. We look at it on a case by case basis. Additionally, make sure you have someone that knows what they are doing setting up Google analytics. It still amazes me that we come across retailers without ecommerce enabled in analytics. That scare me, because a CEO or market that doesn’t know their numbers is not in a good place and they definitely have been taken advantage of by their prior agency. Here is how I look at these metrics generally.
Low Conversion Rate
If I determine you have a low conversion rate I look at a few things.
- Product: Is your product good, does it fit a need, is the photography good, is the product copy good, are there reviews on the page, is their social proof, is it priced appropriately. If you don’t think your customers are shopping price, you are wrong. over 60% of consumers shop price.
- Design: Does the website follow user experience best practices. Do you know who your buyers are, where they are entering from and how you are funneling them into a sales. Do you know why they are buying? How have you tracked this? Does your website display all of the required information for someone to shop confidently.
- Site Speed: Does the speed of the site load in under 3 seconds on desktop computer and mobile. Is the flow from page to page fluid and easy to navigate. Is the site fast on mobile.
- Mobile Design: Is the site mobile friendly. Is the site easy to use on mobile. I recommend a focus group to assess what is easy to use and what is not.
Low Average Order Value
If I determine there is a low order value I look at the following.
- Product Pricing: If the most popular product sold on your website is far less expensive than your average product price you have issues. this is a perfect time to use strong upsells, or kit your cheaper products to get a bundled product price up.
- Incentives: Offering free shipping for higher dollar amount orders will improve your average order value. Finally, if you improve your branding and product photography you can likely raise your pricing. We recently launched a new site that we rebranded and they were able to raise their prices 15%, still saw a .8% increase in conversion rate and a $9.00 increase in average order value.
This is pandora’s box right. Without getting to carried away with EVERY single channel, here are all of the things you should be doing well and consistently.
- Social Media: Facebook, YouTube, Instagram, Blogging: LinkedIN and Twitter or SnapChat can be useful depending on your market, but we’ve found most results with Facebook, YouTube, Instagram and Blogging. Hype and conversion are two different things.
- Blogging; Blogging for SEO is huge. Tons of great content that is 1,500 words in length or higher will help drive leads.
- Paid Ads: run some.. Test test test. most people never test enough to get a profitable campaign and give up too early. You have to be willing to invest into some impressions to get some conversions.
- Influencer Marketing: Find other people that are willing to collaborate on content with you.
- SEO: Invest in a company to make sure you’re getting the visibility you need
There is just so much I could write about the traffic side. I literally could write 100 blog articles on strategies and tactics on the traffic side. Sign up for our blog and keep in touch with us over the next year and you’ll learn more.
If you’d like some help quickly identifying the areas to help you drive more revenue, feel free and contact us. We’re happy to grab a cup of coffee, in person or virtual to uncover some areas of improvement for you at no cost.
Here are a list of specific recommendations that we’ve recommended and have seen work in the past 2 weeks. Note that not all of these will work for you, these recommendations were made in context of a specific business with specific challenges.
- Make sure you track your online reputation. If you have some / any negative reviews or responses, the focus on positive review acquisition, coupled with strong new content is critical to growing your online brand reputation.
- A “brand” doesn’t need to costs $100,000. How agencies operate and function is completely different that how they did 20 years ago. If you want to act like Nike, Under Armour or other awesome big brands, learn to grow where you are at. Great creative is less expensive than you think.
- Look at how virtual reality can apply to your business. Virtual Reality is the future frontier of business applications. Learning how to execute a strategy around VR could gain you great and cheap marketshare as you will be first to market in your industry.
- Look to fund your project through internal cost savings. Many of our ecommerce retailers can fund up to 50% of their first year’s billings with us by switching payment processing. We do offer payment processing as well. We have a PCI level 1 payment gateway and a direct relationship with a processing bank. We also have many engineers on staff well versed in integrations and third party payment platforms.
- You may not need a new website. Many times, fresh eyes with the right team can help you increase sales on your current platform without the need to incur the large expense of a new site.
- The typical agency is off on their timeline expectations for a technology project by at least 20%. We usually are as well, which is why we have learned to buffer our expectations prior to sharing a timeframe with you.
- Instagram Ads are quickly becoming a great tool for lead acquisition, especially capturing email addresses off of content marketing. Video ads with Learn More call to actions are converting for us at or below $1.00 per email address.
- Facebook Ads are still the bomb. Yep, everyone else is releasing social ad products, but Facebook Ads still work.
- Embrace Amazon: They keep getting better at selling. Jump on board and sell there. Sell, sell, sell. They keep capturing more traffic, we recommend you participate in it.
- Jet may be cool! We are just starting to run some tests on jet.com. We expect there may be some solid cost per acquisition opportunities.
- Look to get to the cloud as quickly as possible. You can own your own cloud, cloud doesn’t mean Software As A Service. It just means, scalable architecture and distributed software. Look for cloud point of sale solutions, cloud ERP, cloud ecommerce, cloud accounting tools. Look at the cloud.
- Re-evaluate all of your technology providers annually. The plugins you use to manage social media, reviews, email, etc. all need reviewed. There is new, highly funded technology released every day that is getting better than what you have. Stay in tune with the best tools available. You’ll be glad you did. Our current favorite is Popup Domination. We’ve been using Popup Monster for a few years now, we tested Popup Domination on the same sites with the same configuration as Popup Monster. The acquisition rates are 2-3% higher for every client. We can’t pin a finger on it, but it seems Popup Domination may work better with site caching. Who knows, but the data shows it’s working better.
- Get rid of your cheapest 20% of your product line. Add 20% at the high end. Watch how your sales do not drop, but your average order value increases by 15-20%.
These are just a few musings from our past few weeks. It’s been a fun 2016, we’re excited to be in 2017 and will continue to share our learnings in 2017.
Accelerate Agency is launching Accelerate Commerce in the next 30 days. We are working with some manufacturers directly to create some new brands and build them online ourselves. The purpose is to be in the trenches with our clients and to share our learnings as quickly as possible. There are VERY few digital or ecommerce agencies that have true proof of expertise by having their own skin in the game. We’re ALL IN.
Call us if you’d like to chat.