Editor’s note: This is a guest post by Shahzad Saeed who is a freelance blogger and content marketer
So you’ve rolled out an online store and you’re striving hard to make it ‘the next big e-commerce thing’ in your niche market. Your brand positioning is going pretty well and you started seeing that the sales are rolling out slowly but steadily.
So far, so good. But then, there come the problems. For example, inventory management, you already bought the product but it may not be selling as you had imagined. Unless you make more sales, the survival can be harder.
Needless to say, you need to make more sales and revenue in order to succeed.
That said, how could you generate more sales and revenue for your e-commerce store? There are three ways:
- By encouraging more users to buy from your store (i.e. increasing conversion rate)
- By enticing your customers to spend more when they do buy (i.e. increasing average order value)
- By enticing them to return more often, so it can help generating more sales (i.e. customer retention)
In order to make more sales, startups often focus heavily on acquiring new customers by generating more traffic to their site. As acquiring customers by driving more traffic is definitely going to cost you, evaluating your store’s sales funnel and thus focusing on your conversion rate as well as your retention strategy is vital to improving your overall return on investment.
As I’ve already published a post explaining how to retain your existing customers, in this post I want to focus on how to improve the conversion rate of your store.
By optimising your website for improved conversion, you’re improving the user experience of your store. That means you’re making it easier for your customers to find the product they love on your store and to purchase it without any hassle. In this article, let us discuss everything about conversion rate optimisation for e-commerce startups.
Focus on the right KPIs
Let’s face it, the primary job of an optimiser is to entice passive customers to take the desired action you want them to do. That means enticing them to signing up to your list, downloading your mobile apps, purchasing from your store – the list goes on. Ultimately, each and every action should gear up to bringing more sales and thus more revenue to your table in the long run.
It’s vital to your business that you understand what is, or isn’t working on your site to attract the potential leads and to meet the sales goals.
KPIs (Key Performance Indicators) will help your business to understand where your successes are coming from and what changes you need to make in order to build your customer base and more revenue.
Some of the common e-commerce KPIs are:
- Conversion rate
- Average order size
- Average order value
- Shopping cart abandonment rate
- New customer orders vs. Returning customers sales
Once you identified what KPIs you should focus on to meet your sales goals, you can take measures to improve the KPIs.
For example, if you found that your shopping cart abandonment rate is too high, you can identify the possible reasons for high abandonment rates and move on to formulate your test hypothesis in order to reduce the rate.
For more details on KPIs, check out: Nine Key E-commerce Metrics To Track
Obtain the skills for conversion rate optimisation
A conversion optimiser is a jack of all trades. He’ll need skills and expertise in functional and technical areas and need to know about consumer psychology as well.
They are required to carry out rigorous research and analysis to find out why customers don’t order more. The answer to ‘why’ results in reasoning. Reasoning doesn’t value opinions and preconceptions but values what the data says. In fact, data can help you identify the exact hurdles that prevent your visitors buying from your store.
That said, in order to test various elements on a page to drive results, an optimiser needs to possess certain qualities. Make sure that your team has the right qualities and focus that can be leveraged to generate more revenue.
Here are a few skill sets your conversion team should be having.
1. Technical knowledge
Though conversion optimiser should not necessarily be a developer, he must possess technical skills to install tools like click maps, heat maps and scroll maps.
With that said, having some coding skills is always a plus. In fact, going a little deeper and learning a few tricks will set you apart from regular conversion marketers. If you’re on WordPress, you can hone your development skills by signing up to any of these online courses.
2. Developing hypothesis
Once your optimiser discovered the loopholes that are resisting people from buying, the next step is to come up with a hypothesis to test against your current website. Hypothesis makes a conversion optimiser keep honest since it is an accurate reflection of his test assumptions.
By creating a hypothesis, we’re aiming to come up with a test that will likely beat the control. You’ll need to perform test after test until you hit on something that works.
3. Statistical analysis
Once the test is launched, the optimisers need to analyse the results statistically. Before ending a test and finding a winner, the optimiser should make sure that change in the conversion is statistically relevant until there is at least 95% chance to beat the control.
If it is a big win, you can implement the changes live on your site right away. On the contrary, if it is a small win or if it goes down, you could still learn some valuable lessons from it.
So the judgment skill of the optimiser is a vital part here. He’ll also need to know how to interpret with test results and how it could benefit you to generate more revenue.
Conversion is a team game
Optimiser needs to be a team player. He needs to collaboratively work with copywriters, designers and developers to get the test live. He also needs to bring the team together to make them understand the heart of the issue and creating a solution that makes the most of the opportunity.
So if you want to benefit from the data obtained by research, the person who is in-charge of the project will need the full support of the team in order to make it a priority.
Prepare for a cultural change
For instance, turning a lazy visitor into an active customer may sound like an easy task like pushing a magic button. However, conversion optimisation is not just a matter of testing a few things and watching the conversion rate growing rapidly. The reality is optimisation is simple once you discovered the things that could work well for your site. Until then, you’ll need to test hundreds of dead ends.
The key team members working on the project and the senior management should adopt the viewpoint of an outsider in order to make dispassionate assessments of the tests. The whole team must be genuinely curious to find out why people don’t buy, and what needs to be done to make it easier for them to purchase.
It indicates that a big cultural change would need to take place if you want to benefit from the data obtained by research.
Conversion rate optimisation is not about implementing the so-called recommended practices to your website but testing a range of activities with hypotheses to drive results.
Your dedicated in-house optimisation team would need to devote their precious time to make conversion of your projects a priority. Alternatively, you can always hire a CRO agency that can make things work out faster because it’s their sole focus.
What are your conversion goals in 2016? Am I missing anything in this post regarding e-commerce conversion that you would like to see? Share your thoughts with us below.
About the author
Shahzad Saeed is specialized in blogging and content marketing for startups and small businesses. He’s focused in writing in the e-commerce, marketing, and CRO niche. To say hi or to read more of his writings, visit his portfolio site.