This article originally appeared on Web Profits blog.
If you run an eCommerce store, you are likely finding it harder and harder to increase sales and make a profit from advertising online. Competition is pushing cost per clicks higher, organic search results are now dominated by big brands (and ads), Amazon is rapidly increasing market share, plus shoppers are becoming more astute and increasingly using comparison websites to get the best deal.
So what can you do? Well, you need to get innovative and find ways to increase your conversion rate significantly. If you do this, you can afford to pay more for traffic than your competitors (and still make a profit) and therefore you’ll be able to bid aggressively on less targeted (and higher volume) traffic and networks. The result? You’ll capture the lion’s share of the sales in your market!
A word of warning…
Don’t just blindly implement everything in this article and expect it to work for your website.
Every website is different and all traffic is different…
Which means you need to test these tactics to make sure they actually increase your sales and not hurt them.
Here’s an example to illustrate the point…
Electronic Arts assumed when they originally designed their SimCity product page that adding a promotion at the top would increase the number of sales they generated from traffic that landed on that page. But what they found (through testing) was that removing the promotion section actually increased conversions by 43.4%.
I could analyse why the promotional banner didn’t work but it doesn’t really matter at this stage. The main point here is that blindly implementing assumptions can impact your conversion rate negatively.
That is why it’s important to make decisions based on data rather than on opinion or what has been read online. Ultimately what works for one eCommerce store doesn’t necessarily work for another.
With that in mind, here are 14 tactics that you can test to improve your eCommerce conversion rate:
- Make Search More Effective
- Utilise Exit Popups
- Install Live Chat
- Increase Your Website Speed
- Offer Free Shipping
- Increase Urgency
- Implement Personalisation
- Improve Your Checkout Process
- Test Payment Solutions
- Recover Abandoned Carts
- Improve Your Product Photos
- Add Product Videos
- Generate Reviews
- Improve Your 404 Pages
Plus I’ve included 3 bonus tips to improve your lifetime value once your conversion rates have improved – another important way to improve your overall results:
- Bonus 1: Upsells & Cross Sells
- Bonus 2: Increase Repeat Purchasers
- Bonus 3: Test A Subscription Model
1. Make Search More Effective
The more products your eCommerce store has, the more challenging it can be for visitors to find the products they’re looking for … which is why search is absolutely critical.
The team at UPS Battery Center faced this challenge head on. Search on the company’s site was an absolute disaster. With tens of thousands of products, finding something specific was nearly impossible.
The company decided to give the search function an overhaul and wound up with the following typeahead search:
Once search was up and running, the results were immediate:
- An increase in order volume by 140%
- Gross revenue increased by 125%
- Overall conversion rate improved by 116%
So how do you get an effective search solution up and running on your site as quickly as possible?
Here are a couple solutions you can use:
- SLI Systems – SLI provides search specifically for eCommerce companies. Companies like Wine Enthusiast and FTD have their search powered by SLI. In contrast to the other search providers, they provide an all around solution that also powers recommendations and site navigation. Pricing is on a case-by-case basis so you’ll need to contact them for details.
- Algolia Search – While it requires a developer to implement, Algolia search is a cheaper option than SLI with a free plan available to get you started. Search results are incredibly quick to appear, which is essential for your visitors.
- Swiftype – Another provider of incredibly fast customised search, Swiftype begins at around $249/month. If you have a Shopify site, you can get up and running instantly and they have a free trial so you can ensure it actually improves your conversion rate before committing.
- YITH WooCommerce Ajax Search – If you use Woocommerce (my favourite eCommerce CMS) then YITH is a freemium plugin to take your search to the next level and is worth testing out.
Its also worthwhile setting up Site Search in Google Analytics which will allow you to accurately drill down on what terms people are using (you’ll likely discover products you don’t currently stock but probably should!) and also to review the performance of each search result:
2. Utilise Exit Popups
Adding a popup on your site that offers a discount to people who aren’t ready to buy straight away can increase sales with minimal effort required to setup (they can also capture emails and grow your email database).
Sportique, a San Francisco based eCommerce company, uses a popup to get more people on their list and to increase sales. While your results may vary, they were able to boost their conversion rate by a whopping 50%. They didn’t report on their profit increase, but when giving discounts it’s important to ensure you measure profit (based on lifetime customer value) as well as on the overall sales increase. Sportique – as you can see below – made sure to limit the discount to the first order only:
There are a lot of different services you can use for popups but here are some of the best ones:
- Bounce Exchange – While most popup providers now utilise exit popups, this company was one of the first to offer it. The main idea is that when visitors are about to leave your website (and close their browser tab), this service quickly displays a last-second offer to get them to enter their email or make a purchase. The main downside: they are by far the most expensive, coming in at over $3,000 per month.
- Sumo – While targeted at bloggers and other online publishers, Sumo can be installed on any eCommerce website. Best of all, you can get started for free. The paid version allows a lot more customisation, including unique popups per page or URL string so you can offer product specific discounts. You can see Sumo in action on the Web Profits blog currently.
- OptiMonk – Offers a range of easily customisable templates including a countdown timer perfect to offer a coupon and create scarcity. This is a relatively low cost option starting at $29 per month. If you want more functionality than Sumo then this is definitely my recommended option.
- OptinMonster – Another of the leaders in the popup space, OptinMonster has one of the best interfaces for creating beautiful popups, and now features Welcome Gate functionality which is becoming a common way to capture email addresses. Pricing ranges from $49 to $199 per year.
Using popups on your website can be extremely distracting and annoying for visitors, so along with testing to ensure it improves your overall sales (as opposed to just discounting ones you already would have received) it’s important to:
- Limit the pages your popup appears on – If you’re about to get a sale and the user is in the cart pages or checkout process, they should not be distracted with a popup. The services above allow you to limit the popup by page. Starting your popups on non-conversion pages such as blog posts is a great way to begin testing.
- Limit who the popup appears to – If you already have the person on your email database or they have purchased off you before, popups should be disabled. Likewise if they are in a country that you don’t ship to (for whom a pre-launch popup would be more suitable in case you launch in that country) there is no point showing a sales-focused popup.
- Use intent based popups – There is nothing worse than an instant popup that shows on a page as soon as it loads – the visitor hasn’t had a chance to even find out about the brand or product let alone be comfortable with giving away their email address. Luckily, most of the services listed above offer exit-intent based popups that detect when the person is likely to leave your site (i.e. hitting the back button) and only triggers the popup then.
3. Install Live Chat
Retail stores have sales reps to help you find what you’re looking for as quickly as possible … so why shouldn’t you do the same thing online?
While a usability designer may argue the need for chat is indicative of a poorly designed site, consumers tend to have different preferences of communication. Software Advice ran a study on communication preferences for online shopping and found that 18 to 24-year-olds strongly prefer chat over phone calls. Overall close to 50% of people they surveyed preferred to speak via live chat than a phone, meaning that up to half of your website visitors may be unhappy with the customer experience on your site if you don’t offer live chat.
It’s clear that providing potential customers with a chat interface to catch them before they leave is a massive opportunity for increasing your conversion rate. So how well does it work?
Vigin Atlantic implemented live chat to improve their user experience and saw conversion rates as high as 23% with people who started a chat converting 3.5x higher than visitors who did not, and spending on average 15% more per order. Another study found that Total Gym, a company that sells home gyms online, has seen 39% of sales driven through their chat service.
There are a large number of live chat providers, most which offer a free trial; two of our favourite live chat providers are Olark and Live Chat Inc, both of which you can have up and running within minutes. If you don’t have any staff members that can be online on your live chat during the day there are also a number of third party services such as LiveSalesman.com that can run your chat service for you and answer questions with your guidance – and without much input as they learn your brand and products (if you’re a lead generation business I recommend Lead Chat).
4. Increase Your Website Speed
With internet connections getting faster, site speed has been recently ignored by some web designers and developers in favour of large, full screen images and complicated functionality. However site speed is still extremely important for the success of your eCommerce store, with every extra millisecond lowering your conversion rate and your SEO rankings.
One of the biggest studies carried out on the effect site speed can have was by Amazon.com, who found that for every 100 milliseconds of latency they had a 1% reduction in sales, which for them is a scary $1.6 billion for every second delay.
Walmart also found that for every 1 second of improvement they experienced up to a 2% increase in conversions:
Other major names in eCommerce noted similar performance improvements:
- Shopzilla sped up average page load time from 6 seconds to 1.2 seconds, and increased revenue by 12% and page views by 25%.
- Yahoo increased traffic by 9% for every 400ms of improvement.
- Mozilla got 60 million more Firefox downloads per year, by making their pages 2.2 seconds faster.
So how do you speed up your site?
Firstly, test how fast your site is by using a free speed test through Pingdom or WebPageTest.org – but it’s safe to say that if the world’s biggest eCommerce sites can be improved, yours can too no matter what result you get.
Next, head over to the Google PageSpeed Insights tool and type in your website. You’ll quickly have a list of things you can implement or fix that will speed up your site on both Desktop and Mobile devices.
After you’ve fixed the issues outlined you can then explore simplifying your website, improving your server or website hosting, and a range of other methods to help speed up your site.
5. Offer Free Shipping
Whilst you’re taking a look at each step of your checkout process in Analytics you’ll likely notice a significant number of prospective customers dropping out of the buying process right when they get to the shipping section. It’s a fact, online shoppers hate to pay too much for shipping and it can be the difference between them buying or never coming back to your site again.
Working out how you can implement free shipping without the costs exceeding your profit, however, is hard – especially with small towns in rural areas costing an arm and a leg, and some products being extremely bulky to send. It is possible however by incorporating average send costs into product prices – even if you are shipping worldwide like the Book Depository:
If you can offer free shipping with no conditions, implement it now and you should see instant results – especially when you add it into your marketing. If you can’t, there are still other options which may make more sense. For example, NuFace worked out that they could only offer the free shipping on orders over $75 and still be profitable. They tested adding this incentive to their site:
What they found was that by adding Free Shipping with the $75 threshold they increased their average order value by 7.32% – what they were surprised at is they also had a 90% increase in overall orders, making it well worth the increased costs.
However you package your free shipping offer, it can have a major effect on your conversion rate and bottom line so should be at the top of your list to test.
6. Increase Urgency
One of the ‘oldest tricks in the book’ to increase sales is to increase urgency, and hence the large number of “24-hour only”-type sales both on and offline. Other than running one-off sales however there are a few ways you can increase urgency on your everyday products and thus improve your conversion rate and results. Out of all the major websites I use, Booking.com use urgency the best and in a number of ways, and no matter where you go – here’s what it looks like on the category page:
And on the product page:
And even the booking process:
There is urgency throughout with “today”, “quick”, “X left”, “someone just booked” all screaming out to you to book now before you miss out on the room/best rate.
So without having Booking.com’s development team and a product which has scarcity (rooms available), what can you do to increase urgency on your eCommerce website? Well, you can start with easy to implement changes that can be done by your developer, such as:
- Prominently showing when an item’s stock is low and, if possible, how many remain
- Adding a shipping countdown calculator (using your regular packaging time)
- Rewarding the first XX buyers of a product with a free gift and ensuring this is prominent.
All of the major eCommerce platforms also have a range of plugins available, such as Time2Buy which uses countdown timers and limited offers to increase urgency, or Product Countdown which allows you to create time limited specials with countdown clocks. There are plenty out there so simply search for the functionality you require and you’ll likely find a plugin.
7. Implement Personalisation
Whilst personalisation is definitely the hardest item in this article to implement, it’s definitely where the eCommerce industry is heading in the future. So if you have a significant portion of repeat purchasers on your site (which you should if you email market to your database regularly), then it’s well worth exploring personalisation. Once it’s set up and working in its initial form, you’ll be able to expand its functionality and both improve the user experience and your sales volumes.
So does personalisation work? Well, like the difference between a good shop assistant and a bad one it depends on how good your system is. In the case of Café Britt, they were able to increase their conversion rate by 18% and their average order value by 15%. They did this by creating a personalisation system that made recommendations based on user behaviour during the current and past sessions for returning visitors, and other metrics such as geolocation and what browser they were on. They then matched this data with other users who were similar, and looked at what these users ordered (in real-time) to make the product recommendations.
Amazon is probably the best (and biggest) case study for personalisation, with their website built from the ground up with advanced algorithms and huge tables of customer histories in formats that can be easily data mined. Every purchase one of their customers makes and every product they view determines what other products Amazon will display in both search results and in buying suggestions. Like the Café Britt example they also make recommendations based on what other similar customers viewed or purchased:
Amazon take their website personalisation to the next level, and also personalise the emails that are sent out and throughout the marketing that they do (for example in their dynamic remarketing) – this leads to not just a big increase in revenue but consumers valuing Amazon as the place to go to and see relevant products they are interested in.
As you’re unlikely to have as many web developers and as much cash in your war chest as Amazon, I’m not recommending you instantly try and set up the most advanced personalisation system on the planet. Start small and build from there, as there is plenty you can do that requires a small amount of development work. For example, implementing popups based on a visitor’s country and informing them how ordering and shipping works in their country, or gathering their email address for future use if you don’t ship to their country:
There are plenty of other ways you can personalise your site so make a list of everything you can think of, rank them in terms of likely impact on results and ease of implementation, and get started.
8. Improve Your Checkout Process
When embarking on conversion rate optimisation of a website, most businesses and even agencies go straight to the homepage and start split testing it – this page has the most volume so should be the logical best place to test, right? Unfortunately this is not so in most cases – the closer the step to the final conversion that you improve, the higher the likely impact, meaning that getting your checkout process working as well as it possibly can be is very important.
Having a small error or confusing element in your checkout process can have a big impact on your sales; Expedia found this out the hard way with one extra field in their registration process costing them $12 million a year in lost sales. After noticing higher than expected declined credit cards they started to look into the issue, and found that a significant number of their customers were getting confused and inputting their Bank Name into the Company Name field of the registration form as it was next to where you added your credit card. Some also went on to put their bank’s address into the billing address field.
Fixing that particular issue resulted in Expedia’s revenue increasing $12 million per year. The error itself is not something you’d expect anyone to make, but it’s important to note that anyone who’s reading an article about online marketing or knows what conversion rate optimisation is tends to be far more tech savvy than most companies’ target markets. Expedia reportedly find 50-60 of these types of issues yearly, so the constant improvements – though gradual and minor – have a big impact on their bottom line.
In another example, The Vancouver Olympic Store switched their checkout from a multi-step process to a single page and saw an immediate improvement of 21.8% – not bad with no additional marketing spend!
The first step in improving your checkout process is to work out all of the issues, both ones you find but also ones that your actual customers find. You can find out these issues using a range of tools – here are my two favourites:
- Hot Jar – This tool allows you to record website visitors as they navigate through your site and move through your checkout process, and playback exactly what they see. Reviewing these recordings is a very useful way to identify issues with your website and checkout process. Hot Jar also allows you to set up Conversion Funnels and Form Analytics which can show exactly what page and what form field people are dropping out of the checkout process from.
- UserTesting.com – If watching someone’s mouse move around your site isn’t enough, you can find out exactly what users are thinking as they browse through your site using UserTesting.com. For just $49 per video you can get people in your target market on whatever device you choose to go through your website, attempt to perform a task, and you can then observe them on video and listen to their feedback and what they are thinking throughout.
Here’s how Hot Jar looks when you’re watching a visitor recording:
Once you have a list of the issues (ensure you include checkout process up-sells, which is covered later in this article) then – like with the personalisation – rank them on ease of implementation. For example, issues with payment processing will be a lot harder to fix than simple changes such as removing the navigation or making suburb and state pre-fill from the post code. Then get to work with split testing or implementing each change in priority order, making sure to measure the results of each change and revert and improve changes further if necessary. If you’ve found and fixed all the issues you can then take a look at this awesome list of 40 ways you can improve your checkout process for more ideas. As outlined at the start of this article don’t just blindly implement the whole list, however, or you may end up with a worse conversion rate.
The team at Web Profits have designed and improved some pretty high converting checkout processes, so get in touch if you want us to take a look at yours.
9. Test Payment Solutions
Once dominated by Paypal and traditional merchant accounts at banks, the online payment space is becoming a contested battlefield between companies with each trying to offer features/functionality and fee differences to lock in both eCommerce website owners and consumers themselves. With so many to choose from now, it’s important to test each payment solution to see which can help you improve your conversion rate.
Which payment solutions you select to test depends on what you sell, where you are located, and the features you require (i.e. subscription payments) and thus there is no best practice solution. However I recommend that you start by comparing and then testing Paypal, Stripe and Braintree, paying close attention to their success on mobile devices – the fastest growing device but the hardest to transact on.
Along with testing the payment solution you use, services such as Afterpay (which lets your customers effectively layby their goods and pay them off over time) should be tested. After that there are Chinese payment solutions to look into, and crypto currencies such as Bitcoin – all which may improve your conversion rate – depending on your target market.
10. Recover Abandoned Carts
If you’ve setup the funnel of your checkout process in Google Analytics properly, you’ll see a huge drop off in prospects exiting each step of the process:
For that reason it’s recommended that the very first step of your checkout process captures the buyers email address. Grabbing their contact information early allows you to then push them into an automated email sequence which is focused on getting them to come back to your site to complete their purchase – this is referred to as an Abandoned Cart Recovery Sequence, or recently as Email Remarketing.
Here’s an example abandoned cart recovery email from doggyloot …
So how well does it work? Well, eConsultancy.com found that:
- More than a tenth (11.61%) of cart abandonment emails are clicked.
- The average order value (AOV) of purchases from basket abandonment emails is 14.2% higher than typical purchases.
- Nearly half (44.1%) of all cart abandonment emails are opened.
- Nearly a third (29.9%) of clicks lead to a purchase back on site.
Pretty impressive results at a very low cost per email send! To get the best results your emails should focus on:
- Asking What Happened: The buyer left for a reason, so a personal looking email asking them if there was anything they need help with, any questions they have or what went wrong can do a great job at finding out the issues and overcoming them so they convert. Make sure your emails are sent from an actual email address that can get replies.
- Providing Discounts: Nothing works better than an incentive to come back and purchase, whether it’s a free shipping promotion or a straight discount it can work well – be careful however that your regular customers don’t become accustomed to this discount, and ensure the discount only comes towards the end of the sequence (plus ensure that if they purchase before this email they are removed from the sequence).
Most email providers allow triggered emails and have APIs that will allow your developers to push the right people and right information into one of these sequences (and remove the prospect once they become a customer). If your email provider doesn’t offer this functionality or your developer can’t set up the sequence, then third party providers like Rejoiner.com can simplify things (with their stated claim that their clients are able to convert 8-15% of abandoned carts into successful checkouts).
Check out this article from Shopify for 12 more examples of Abandoned Cart Recovery Emails.
If you’ve already got abandoned cart sequences set up and want to take your automated email marketing to the next level, you can also look into and set up browse abandonment emails where you email a signed-in customer based on items they have browsed but not added to their cart. Amazon currently does this and it’s very effective:
11. Improve Your Product Photos
We’ve all been to an eCommerce website or eBay listing and seen a product where the photo is tiny, bad quality, or was even of the wrong product – and what was the next action? For me it was clicking back and getting away from the site to one where I could actually see the product I was about to spend money on … and for many other prospects this was also the case.
The photos you use on your product page will have a huge impact on your conversion rate as it will be the first thing a prospect looks at on the product page to make a snap decision on whether they are interested in reading the description or specifications, and its one that you’ve simply got to get right. This article by Peep Laja from ConversionXL.com outlines how you need to improve your images – essentially you need to use:
- High quality images – Use professionally taken images with white backgrounds that can be clicked and enlarged without loss of quality.
- Alternate & detailed views – Don’t just offer one image of a product, add several showing alternate views of the product.
- Context – Where possible add an image that shows the product in context, i.e. jewellery actually being worn by someone.
- No stock photos – Theres no excuse for using a stock photo for a product ever.
Without the right photography equipment and experience it can be hard to get the perfect shots you’ll need to maximise your conversion rates; luckily there are now many photo studios around Australia offering product photography where you can send or drop off your products and they’ll do all the hard work. One company that I haven’t used but which looks like a good option (based on their portfolio and due to all of the other services they offer as well) is: https://www.skuvantage.com.au/, but search to find one that will suit your needs.
Along with the photo itself it is also important to look at the layout of your product page and the actual size your images are displayed at, as these can have a big impact – split testing and improving your layout is the best way to ascertain the highest converting option here.
Adding functionality to your photos can also help, and along with the standard “click to enlarge” option you can look at offering Zoom/Magnifying functionality which allows people to zoom into an image on mouseover and view the finer details of a product. It is also relatively easy to setup with most eCommerce systems.
Along with zoom functionality, adding 360° rotating images which automatically rotate images on a product pages can improve your conversion rate. DueMaternity.com found that their conversion rates increased by 27% when implementing 360° photos, and GolfSmith.com found similar results with conversion rates increasing 10-30% on most products. A lot of the photo studios that take product photos can also deliver 360° photos of each product, or see this guide on how you can create them yourself.
Another part of your website where product images are important is in your search bar and search results pages – when reviewing the website ensure your best quality photos are being used in these locations as well to maximise the visits to your product pages (see previous recommendation for site search providers that offer this functionality).
12. Add Product Videos
Improving your product photos should be your first priority but, once you’ve done that across your whole product range, what more can you do? The next tactic you can test is adding product videos, which many of the largest eCommerce retailers in the world use and which they have reported to have significantly improved conversion rates and average order values.
There are a number of reasons why a lot of eCommerce websites are adding product videos, including:
- Increased Conversion Rates – As long as your videos are high quality and contain good content they should increase your conversion rate, as StacksandStacks.com found through testing which showed that visitors who viewed a product video were up to 144% more likely to add that product to their cart than a visitor who had watched no video.
- Higher SEO Rankings – Google loves video, and increasingly the organic search results are showing a higher proportion of video results – adding video to your product pages increases the likelihood of these pages ranking, especially if the video is hosted on Youtube.
- Multi Use – Creating videos for your product page also allows you to use the same video content as part of your overall marketing campaign across channels. For example, video ads on Facebook & Instagram are performing extremely well, especially when creating an audience of people who have watched the video and then later remarketing to them to buy.
So what best practices should you follow? Well generally speaking product videos are:
- Short – No more than 30 seconds unless the product is very expensive or complex.
- High Quality – You should only use product videos if they are shot on a good camera and have been edited properly – there are plenty of studios offering product videos so, if in doubt, use a professional.
- Informative – Showcasing all of a product’s features and answering all questions a prospect may have about a product.
- On Brand – Highlighting the brand’s key USP and selling point, i.e. highlighting the funny/quirky side of the brand or showcasing the luxury/quality side of it.
If you follow those best practices then everything else is up to you to experiment with, trial and error style. The first place to start is identifying what type of videos will suit your product and your brand. Start by looking through your competitors and what they are doing, and by reviewing examples across other industries (such as this list from BigCommerce). Once you’ve identified the video style you prefer, get started on your highest selling product, making sure to split test the video vs just displaying the product image to see the effect on conversion rate before rolling out the same style video on other similar products.
One of my favourite types of product videos are from the wallet maker Bellroy.com – they are short, to the point, and show all the features of the wallet that you’d need to know before purchasing – and they would be quite fast to create as they don’t require models/presenters:
13. Generate Reviews
92% of consumers now read online reviews before buying, and 88% trust these reviews as much as personal recommendations – so it’s clear that if you want to succeed online you need reviews. One approach to getting these reviews is to simply enable reviews on your site and wait – however like true organic SEO, this approach is slow and will lead to some of your products not having reviews at all.
To increase the number of reviews you get it’s important to prompt past purchasers to leave their feedback and to automate the process; that way no purchase is missed and your overall reviews will continue to build consistently – this is important due to the 44% of consumers who say a review must be written within one month to be relevant.
There are a number of ways to automate your review process, including simply using automated email sequences or finding a plugin for your specific eCommerce platform that takes care of everything or you. My recommendation is a tool called Yotpo that plugs into your eCommerce platform and sends automated, personalised emails to purchasers to prompt them to leave reviews, and uses data algorithms to optimise when to send review requests for each product.
Once you’ve automated your review process you can then look to improve the results even more using tactics such as incentivising reviews, for example by offering coupons, discounts, or competition entries in return for leaving a review. Tactics such as feedback filtering could also be explored whereby you give unhappy consumers the ability to vent and have their problem solved prior to leaving feedback on a product.
14. Improve Your 404 Pages
What happens when someone ends up on a page on your site that doesn’t exist? For most websites it’s an annoying experience but it doesn’t have to be. While for SEO reasons we’d recommend monitoring and fixing all 404 errors as soon as possible, as a backup plan you can still improve your 404 page so they will convert.
For example, here’s how Modcloth handles their 404 page:
Rather than displaying a boring page, this a great opportunity to help the user find what they’re looking for.
You can also consider including a search box like UnderArmour does:
Crazy Egg has a good article explaining how you can improve your 404 pages here.
Bonus: 3 Ways To Improve Your Lifetime Value
Another way to maximise the results of your eCommerce store is to maximise the lifetime value of each customer – doing so enables you to spend more getting the customer initially, which enables you to bid more on every channel and thus maximises your volume. When an increasing lifetime value is combined with an increasing conversion rate you can dominate your competitors in all marketing channels.
Bonus 1: Up-sells & Cross-Sells
“Would you like fries with that?”
McDonalds’ classic up-sell illustrates one of the most effective ways for eCommerce companies to improve their customer lifetime value by increasing the value of each and every order they place. According to one study, companies that leverage up-sells can expect 4% of gross sales to come from them.
Up-selling is key to maximising the performance of your website, and there are multiple spots on your website where you can do this:
A) Product Page
Up-selling a complementary product or bundle on a product page is a very effective way to increase average order value, and can have very high conversion rates as they actually need and can use the product. A good example of this is seen here:
B) Shopping Cart
Up-selling other popular items, especially if personalised or driven by an algorithm (i.e. people with item A in the cart usually bought item C), can be extremely effective on the shopping cart page. However, ensure you do not take too much focus away from checking out through intuitive design or you may distract the user from completing the sale. Amazon push a lot of up-sells throughout their site, including on their shopping cart page:
C) Checkout Process
If someone has already added an item to their cart and started going through the checkout process, they are a ‘hot prospect’ and chances are they are going to purchase. Like the chocolate bars we’ve all been guilty of grabbing in a supermarket checkout, this is the perfect time to promote an offer thats too good to say no to. The key to this type of up-sell is ensuring (through testing) the offer is worth interrupting the user when checking out or you may lose the sale completely. Airlines such as Jetstar are very effective at this type of up-sell:
D) Success Page
You’ve got the sale now and they’ve bought a few up-sells – its pretty much time to celebrate, right? Not quite … there’s still one place you can try and up-sell the order – the often neglected thanks or success page. Once you’ve gotten all their details, including payment method, with a bit of development work you can up-sell someone just by getting them to click a button to add an extra item, upgrade, or any other offer you have. An example of this is on a checkout process I built for Skin Physics which up-sold their DNA Reset product and pushed an extra offer on the thanks page:
Wherever you add the Up-sells & Cross-Sells be sure to test out the offers and products you feature often, as they can be the difference between it succeeding and increasing order values or failing and annoying prospects and customers for no additional gain.
Bonus 2: Increase Repeat Purchasers
After you’ve done all of the hard work finding your target market, marketing to them and implementing the 14 methods above to get them to convert and become a customer, you shouldn’t stop there. Whether you sell consumables that need to be restocked after a set amount of time or sell one-time products, past customers have a far higher chance of purchasing again. This audience of customers know your brand and the service you provide and, importantly, you have their contact details already so can market to them using methods such as email marketing vs paying high cost per clicks on Google or Facebook.
There are a few ways you can use to increase your repeat purchases:
a) Email Marketing
Because you already have their details the cheapest way to contact your customers again is via email marketing. There are a number of different campaigns you can run to encourage people to become a repeat purchaser:
- Sales & Promotions – One-off sales and promotional campaigns, i.e. 20% off Mother’s Day sale
- Re-order Emails – Emails at set days since purchase pushing people to replenish consumable products they have purchased, i.e. buy more disposable shavers
- Upsell & Cross-sells – Complementary products to items they have purchased, i.e. buy a laptop case to go with your new laptop
- Evergreen Sales Sequences – An automated sequence of emails which look like one-off sales but are actually evergreen – i.e. our natural supplements range will keep you healthy
- Re-activation Campaigns – Triggered to people who have not purchased in some time with an incentive to come back and repurchase, i.e. we haven’t heard from you in a while, here’s 10% off to come back
It’s important you only send high quality emails with good offers, automate as much as you can, and that you and test improve the emails over time to maximise the results you are getting.
b) Loyalty & Reward Programs
Like a coffee shop loyalty card, running a loyalty or rewards program for your online store can be an effective way to increase repeat purchases. A good example of an online loyalty program is offered by Expedia which incentivises their customers to keep booking through them to earn benefits that save money, benefits that reward them, and also service benefits to improve their Expedia experience. They also incentivise with points that can be spent on future travel options, and tiered membership levels offering different incentives.
Loyalty program are most commonly triggered after a set number of purchases or a set $$ value of purchases, and the rewards that work best are:
- Money Off Next Order
- Percentage Discount Off Next Order
- Free Product/Gift With Next Order
- Access To VIP Style Club with Benefits (i.e. Free Shipping)
To setup a loyalty or reward program I would first recommend looking at third party platforms such as Smile.io, or plugins that will work with your eCommerce system, as building your own can be a significant investment. For example, for Woocommerce shops the Points & Rewards plugin can work well.
Bonus 3: Test A Subscription Model
After the success of Dollar Shave Club there are now hundreds of subscription-based websites out there. The reason it’s such a popular sale method? While it’s hard to get people to subscribe to your product, if you succeed then the lifetime values of all your customers will be significant. This means you can spend more money on advertising and grow your business more rapidly than competitors, plus over time grow your recurring revenue without additional marketing spend.
While it’s not a good idea to instantly update your successful eCommerce business to be subscription only, it is well worth testing out whether you can get customers to subscribe (with a good enough offer) and then optimise and improve from there – who knows, it may be so successful you do convert to a subscription-based business in time.
The fastest way to get a subscription model setup is through a plugin for your eCommerce system. Woocommerce has a great once called WC Autoship which is reasonably easy to setup and integrates with all the major payment providers including Paypal & Stripe, and takes care of automatically billing your customers at the right time. You can see this in action on a website I created for Skin Physics:
While it takes time to implement and test new tools and tactics, the list above should provide you with a solid jumpstart to increasing both your conversion rate and the lifetime value of your customers.
Keep in mind you can easily increase your conversion rate by halving the cost of your products, but this may not necessarily mean you’ll be making more money, so the number one metric to measure with every change you make is profit – all other metrics can give you false readings of success.
Start with one idea from above and go from there. Also, make sure to let us know your results so that I can share them in future articles!