Every e-commerce business faces two key challenges:
-
getting traffic to your store
-
turning that traffic into revenue.
Today, I'm going to take the position that a bird in hand is worth two in the bush and focus on problem 2. After all, we don't all have buckets of money to spend on ads for new traffic.
Instead we are going to look at the four key areas you can do to increase revenues from your existing traffic. We will discuss tactics, metrics and ways to find opportunities to do so!
The four key areas are:
Let's dive into each in more detail:
Pillar 1 : Conversion
Improving the conversion rate means turning more store visitors into purchasers. It is the foundational pillar of all the other pillars, as all other pillars depend on it.
Finding opportunities to improve conversions include listening closely to your customers. The key here is to identify the reason why people don't buy (and there will be plenty), and making changes according to the feedback.
Finding Conversion Rate Improvement Opportunities
- Implementing on-site polls
- Run website usability audits.
Example Tactics for Conversion Rates:
- Welcome Offers
- Streamlined Checkout Process
- Implement Social Proof on Product Pages
Metrics for Conversion Rates
- Purchases
- Checkouts Started
- Add to Carts
Pillar 2 : Spend
Improving spend largely means getting more revenue from your existing customer base.
Here we may immediately think about pushy upselling pop-ups , that ending up annoying customers and harming your store. But it doesn’t have to be this way. The key here is to offer meaningful, real value to your customers.
For example, if you are a music store, think bundling the sale of an electric guitar with an amp and strings, that suits the demands of your particular target audience.
Finding Spend Improvement Opportunities
- Heatmap Analysis
- On site surveys
- Customer Service Interviews
Example Tactics for Increasing Spend
- Offering warranties/protection on top of expensive purchases
- Bundling
- Progressive Discount Incentives
Pillar 3 : Frequency
This pillar focuses on customer loyalty, making sure each existing customer purchases repeatedly. In order to do so, it is important that the first purchase experience of the customer is excellent.
Here, a good post-purchase experience, email and SMS marketing are useful ways you can trigger positive experiences in your past purchasers, and remind them to purchase again.
Subscriptions and loyalty programmes are also effective ways of increasing purchase frequency.
Finding Frequency Improvement Opportunities
- Cohort Analysis
- Customer Surveys
- Email Marketing Analytics
Example Tactics for Increasing Frequency
- Pushing for Subscriptions
- Exclusive Offers/Products
- Smooth Re-ordering Experiences
Pillar 4: Merchandising
Merchandising is nudging customers towards the products that are more profitable than others. Here increasing the visibility of the products you want to move, and vice versa for the products you don't want to move
will help improve the success rate. In order to do so, it is important to identify which products ultimately do and do not contribute to your bottom line.
Finding Merchandising Opportunities
- Product Performance Analysis
- Customer Interviews
- Preference Testing
Example Tactics for Improving Merchandising
- Improve Discoverability
- Product Recommendations
- Key Variants
- Smart Search
Key Takeaways
Not all the pillars may be applicable to you, it depends on the nature of your product/ service, but these are the key levers that you can pull that will immediately improve the performance of your store.
The key here is to be able to trust in the reliability of your data, as it will be the basis in which to decide what to do, how to do it and whether or not the changes worked.
When you in turn invest in traffic acquisition, you would be in a better position to reap the rewards!
