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This is the first part of a guest blog by Omar Lovert from Polaris Growth, based on a talk he gave at a Shopify Meetup late 2019. As a conversion optimization specialist, it’s part of Omar’s daily work to optimize online stores and make them grow. His guiding principle: with a few simple tricks, you can double your revenue without even buying more traffic.
Improving conversion rates is the top priority for many online ecommerce business owners. And rightly so. There’s a lot to gain.
You can maintain your marketing budget and see profitability skyrocket, or invest your increased margin to bid and compete more aggressively on high-volume keywords, for example.
” Improving conversion is the top priority for online stores because there is so much gain.”
Either way, your business is stronger, with more options available to drive growth.
But many attempts to improve conversion fail. In this article, I’ll identify the five obstacles that prevent you from doubling your revenue and then share the “2x revenue growth formula”.
Revenue growth is hard work, make no mistake. I’ll give you 12 actionable tips that take about 30 minutes to complete so you can make progress towards your goals immediately!
This post is part one in a series
Ecommerce business owners never have enough time.
They often find themselves saying, “I don’t have time for growth, we’re already super-busy and no one can afford to focus on growth.”
Or “I’m so busy working in my company that I don’t have time to work on (the growth of) my company.”
💡 Tip 1: Find the cause of everyday problems and solve them structurally so that they don’t happen again
If you find yourself facing a problem twice, it’s time to reflect.
Identify the root cause.
If you know what the cause is, ask yourself if it’s likely to happen again.
If a problem threatens to return within 90 days, then try to fix it now. This way, you’re working on structurally improving the processes of your online store (as well as your back-office operations).
If you can keep this up for four weeks, then that’s at least four issues that you’ve resolved for good. This is how you create time in your company to work on long-term growth.
💡 Tip 2: Start small: block out 30 minutes a week
Find one task or activity that you can stop doing, so you can free up even the smallest possible time block to work on improving your conversion rate. Every little bit helps.
You put your heart and soul into growing your online store, but you focus on the wrong customers or do things in the wrong order. You need to put your time into keeping your most valuable customers and encourage them to return.
These mistakes are really the difference between an experienced ecommerce business owner and a first-timer.
💡 Tip 3: Stay hungry, stay foolish
Never stop learning. The better informed you are, the better your questions will become. Your knowledge will help you take your company to a higher level, but you don’t have to learn everything on your own.
Ask for help. Take advantage of other’s expertise, get inspired and find support. Only take advice from people who’ve achieved what you’re hoping to achieve.
💡 Tip 4: Use the feedback from your customers to grow revenue
Use the richest database of knowledge and experience you have (it’s at your disposal every day) – your current customers.
I believe that you actually do have the knowledge and experience “in house”, but that you’re looking in the wrong place. The fact is that your customers give you valuable feedback every day!
What are the five most frequently asked questions sent to your customer service team?
Watch those inboxes keenly, and be sure to ask follow-up questions the next time you have contact. Can you create a clearer picture of the problem? This often highlights simple things that you can solve or change. If you show you’re making changes based on your customers’ feedback they’ll return to you as you’re showing you have their best interests at heart.
If you don’t know, make sure you find out. Choose one question your team can ask during customer interactions over the next two weeks.
What didn’t work well for the customer? What was confusing or could be clearer? Ask follow-up questions so you can fix it.
You can also have too many ideas to grow your business. Without a clear, step-by-step plan everything seems equally important. But, not all ideas are good ideas!
Follow this advice: An idea that comes directly from a customer (or several customers) is worth more than an idea from one of the employees of your company who does not frequently order as a customer.
💡 Tip 5: View the funnel through the eyes of your customer
One of the first things we do with our clients is to make sure that they see their online store through the eyes of their customers. You’re working on your desktop, while your customers are (probably) on their mobile.
As a matter of fact, for 90% of the B2C online stores we work with the majority of traffic comes from mobile. That’s where the traffic is and so that’s where you’ll find the opportunities. Make sure you fix the problems on mobile first!
💡 Tip 6: Find out which device category has the most traffic
Check on Shopify (or Google Analytics, if set up correctly) which type of device has the most traffic and what your conversion rate is for mobile-first shoppers.
Is over 50% of your traffic on mobile? And is the conversion rate lower than on tablet and desktop? Then you should go through your online store using an older iPhone (with a smaller screen) and a newer iPhone model and two Android devices.
If you don’t have access to these devices, tools like this can help: www.browserstack.com.
Shopify is 100% mobile-ready, but your theme might not be. There might be minor styling errors in your website, possibly in your theme or in the custom modifications of your design.
If a button falls outside the screen, your customers won’t be able to order. Make sure you go through every step of the funnel with your whole team on a range of devices.
As we said, you’re definitely not the only one, but it’s still frustrating. In my experience, the following actions are the way forward.
You’ve probably heard this word a hundred thousand times already, and here I am saying it again: F O C U S. The key to your success lies in how you use your energy to achieve growth. This applies to many things in life and it applies just as much to the success of your online store. Focus on the most important things first and your loyal customers will return and spend with you more often.
HOW to find the right focus is what I‘ll cover next.
💡 Tip 7: Ensure focus with this step-by-step plan
Determine your goals. If this is an issue, then take a good look at your goals and ask yourself: what do you want to achieve?
More sales, ok! But, how many more? What should your conversion rate be? And your average order value? When are you satisfied? Set numerical goals, for example, a 10% higher conversion rate.
Focus on the lever where you get the most growth. This means you’ll get maximum results with minimal effort. We will share more about the levers later in this article.
Set priorities: focus on the two or three most important steps you have to take right now. If you tackle the biggest obstacles to your growth straight away, you’ll make the biggest impact. If you tackle everything at the same time, your energy will dissipate, and you won’t be able to make substantial progress.
Without accurate data, you can’t make the right decisions. It’s that simple.
Fortunately, transaction data in Shopify is always accurate and so you can rely on it. Google Analytics is a good tool but it needs to be in place and properly configured before you start optimizing.
💡 Tip 8: Make sure your information is correct
I can’t repeat it enough: base your decisions on correct data! The transaction data in Shopify is always accurate, but errors can creep in. Don’t blindly focus on the results of whatever analytics you use. View and compare last month’s numbers in both Shopify and Google Analytics. If the difference is greater than 10%, you cannot truly rely on the Google Analytics data and there’s work to be done.
Tools like “Little Data” can help you reconcile Google Analytics and Shopify data.
💡 Tip 9: Create a new view and filter your own IP address
If you’re not yet filtering your own sessions in Google Analytics, this is a good tip for you. In a new view, exclude the IP addresses of your office, warehouse and home addresses. This prevents sessions from you and your staff from polluting the data.
Again, it’s important to do this in a new view or window. If you make a mistake, you’ll still have all the data in your original view/window. It’s easy to do in 5 minutes. Here’s how to filter your own IP address from your Google Analytics.
There’s fierce competition online. As competitors keep increasing their ad spend (and increasing their bids) your online marketing becomes more expensive. Your competitors are bidding higher because they can afford it. Their average order value is higher, their conversion rate is higher, or their customers buy from them more often. Or maybe they just have a bigger budget.
Due to an increase in this competitive pressure, customer acquisition costs are also increasing, but even with a smaller budget, you can still make more sales or be more profitable than your competitor.
You have four pathways to increase your revenue. They are:
Your revenue is easily determined with this formula: F x AOV x CR x T.
I know it sounds simple, but it really works.
So, when you increase the value of those variables, you automatically increase your revenue. Now, which lever do we prioritize and how do we pull it?
More traffic equals more revenue is an illusion
A common logical error is to think that increasing traffic is the answer.
Quite often you’re hitting your target customers with your existing campaigns. In many cases then, if you invest in more traffic through Facebook or Google ads, this generally just results in more visitors but with much less intent to buy.
This will decrease your conversion rate, increase your acquisition costs and ultimately decrease your ROI. In addition, you have (too) little control over this traffic because you’re dependent on the algorithms and policies of the large social and tech companies that you work with.
Finally, it’s also an uphill battle: once you have a lot of traffic through these channels, you also have to deal with more competition, which also means higher costs. If you then reduce your spending, this immediately results in fewer customers.
This is why I say it’s much smarter to bet on the other three variables: frequency, order value and conversion.
Use email marketing to keep your customers coming back. Automating this is the cheapest way to boost your frequency. A Harvard study shows that with a 5% increase you can generate up to 95% more profit!
You could link your ESP with your loyalty program to send emails to customers showing them they have loyalty points waiting in their account. This way, they’ll come back more often to spend their points on purchases.
💡 Tip 10: Brainstorm on how to find more repeat customers who buy from you more often
Who is buying from you more often than your average customer? Who are the “super buyers”? Brainstorm and view your Shopify backend to identify these buyers.
It’s simple but effective: increase your prices.
Focus your energy on getting more large orders rather than more small ones. You can also do this through bundles, upselling, free shipping, or extra loyalty points for more spending.
Increasing your conversion is the biggest challenge, but it’s also the most sustainable lever for success and more revenue. In a nutshell, it boils down to the following four steps: research, analyze, formulate solutions and implement them. More on that in part two of this blog, with an in-depth explanation!
Hopefully, you now know how to overcome the five obstacles to ecommerce growth.
In the next article, I’ll share with you how to work with the two levers that are often not used to the fullest: increasing the frequency and average order value (AOV).