How to increase sales in the online store and spend less on traffic?
In 2016, the global value of sales on the internet channel exceeded 1.8 trillion dollars. In 2017, this value exceeded $2.3 trillion. In 2018 it has exceeded 2.8 trillion dollars. The e-commerce market is growing by at least 20% annually. So the basic question is: will the growth of your online store at least match the growth of the market? In this industry, if you don’t grow quickly enough, you simply lose. Unsatisfactory results do not mean, however, that everything is lost and it is time to quit the business. How to increase sales by improving your online store – this is what you will learn from this article.
When we ask our potential customers, the owners of online stores, about what they have already done to increase sales, they almost always say that they used SEO, social media, AdWords ads or mailing. They were advised to “optimize keywords”, “upload photos to Instagram”, “make campaigns on Facebook”, “write a blog”. – and so on, and so on. No wonder, that’s what all these Internet marketing agencies do, they can’t offer their customers anything else.
Sales growth in online stores 2014-2021 (source: Statista.com)
Traffic is not enough
Why is it not enough? The problem is that all these actions relate only to one of the key parameters for e-commerce – traffic on the website. Internet marketing agencies advise on how to increase the incoming traffic to the store. They advise everyone in the same way.
But the competition is doing the same, and since the supply of potential customers is limited, all online shop owners have to compete in the costs of acquiring them. As a result, the cost of acquiring traffic to websites is growing year on year. No wonder, therefore, that according to some data, up to 95% of the budgets of online stores are now used to generate traffic.
Maybe at some point, instead of paying more and more for maintaining incoming traffic at its current level, try to take care of the remaining parameters? The traffic is important for the success of online trading, but simply being visited by potential customers is not enough. We will significantly increase sales by focusing on the other three parameters, about which marketing agencies usually remain silent.
Higher conversion rate
Even adding a product to the cart does not guarantee sales, the customer at any time is able to abandon the cart. How many new visitors will be customers of our shop? According to research, even 70 percent of users do not finalize their orders. How to increase sales when so many of these users manage to flee?
Of course, the conversion factor does not only depend on the store itself, but also on the parameters of the ordered traffic – where it comes from and at what time. What happens to people going to the store, whether they reach the checkout and pay for the goods, depends to a large extent on the architecture and functionality of our store. However, even if the cart is abandoned, not everything is lost yet.
Higher average cart value
How much are the goods bought during one session in the online store worth? For smaller online shops, a more useful measure would be the median value of the shopping cart.
We would like this value to be as high as possible, but after all, on the internet, we are competing primarily with the price, we cannot raise the prices of the products too high. What we need is to sell more.
We have to look for ways to persuade the customer to put more of our offer into the shopping cart.
Higher purchasing frequency
The best customer is the one that returns. How often does it happen? Why so rarely? How to increase sales by encouraging them to return more often? Building customer loyalty is one of the most difficult things to do in marketing, especially when we’re not Apple and our offer doesn’t really stand out.
What is worse, more and more often the commonly recommended methods bring the results opposite to the intended ones. The easiness of comparing offers has caused that the customer can be attracted to shopping – but from the competition.
Three methods for three parameters
Instead of spending more and more money on traffic, online shop owners can improve these parameters at a relatively low cost – and thus increase sales.
Recovering abandoned shopping carts
Even 70% of the customers of online shops do not finalize their orders. They add products to the shopping cart, but then they get stuck in one of the next stages. Reasons for being stuck can be different, many of them are due to faults in the design of the store. However, even the best-designed stores suffer from this problem. Maybe something has happened to the user? Maybe he has lost access to the network? How to increase sales when the technology is against us?
Fortunately, not everything is lost. A user who has abandoned a shopping cart can still be effectively encouraged to complete the purchase. This can be achieved by using the module for e-mail campaigns integrated with the shop, which are conducted at the moment of abandoning the shopping cart.
According to the research we have done, it is most efficient to conduct such a campaign using three e-mails:
- The first email, sent 2 hours after leaving the cart, containing information such as: “Our dear customer, it looks like you were shopping in our store, but something went wrong. We’ve saved the whole transaction for you and invite you to complete the purchase”. Such mail has to include a button redirecting to the shopping cart and photos of the products that the customer has left there..
- If this does not help, a second email is sent 48 hours after the cart has been abandoned. We repeat the message from the first email, completing it with contact details of a shop assistant who could help with the purchase. We also introduce time pressure: “This shopping cart has been waiting for you for 48 hours and will expire soon”.
- The third e-mail is sent after 72 hours (three days). The content of the second e-mail is enhanced with stronger time pressure: “Your shopping cart has been waiting for you for 72 hours. Your shopping cart will expire”. It is also worth to include additional incentives for new customers, such as a discount to the content of the cart, a discount to the next purchase or free shipping.
The use of such email campaign allows you to reduce the number of abandoned shopping carts by an average of 25 percent, significantly increasing conversion in the store!
Increasing the value of the shopping cart
We would like the customer to buy more than just a single product. Here, the cross-selling module will be invaluable in the shop, used to recommend products that somehow connect with the one that has already been placed in the shopping cart. The recommendation should refer to the opinions of customers: “customers who bought these products usually also bought …”, “other customers also recommend …”.
Typical cross-selling: cake for the coffee
Effective cross-selling requires adherence to three principles:
- Clever selecting of suggested products. Machine learning turns out to be invaluable here. The use of artificial intelligence, which learns on the basis of customers’ reactions to hints presented to them, allows increasing the average value of the shopping cart in larger stores by up to 20 percent!
- Taking into account the paradox of choice. More is less in this case: the customer should not be presented with more than 2-3 products.
- Avoiding price shocks. If a customer has already put a product in the basket for 100 dollars, there is no point in suggesting him to buy a product for 500 dollars – he rather did not come to make such purchases. However, suggesting a product for 25 dollars may result in adding it to the basket. The use of discounts in the style of “If you buy these two products in a bundle, you will save …” also helps here.
However, during our work on the optimization of online stores, we discovered that this is not everything. Two other techniques are very helpful:
- The list of the most frequently purchased products in the shop should be analyzed on an ongoing basis. The best selling products should not have a fixed price. It is worth testing whether increasing their price by 10-20 percent will not contribute to increasing the value of sales. The automation of this process allows for a noticeable increase in sales value.
- It also helps to offer freebies after exceeding the price thresholds: the shopping cart should keep the customer informed that e.g. X dollars are missing to the free shipment or to receive a coupon. Such an interactive shopping cart increases the value of sales by 10-15 percent on average.
One of the most valuable assets of an online store is its database of customers and potential customers. Therefore, we should never give up the active acquisition of e-mail addresses and ongoing processing of all their data.
- The most effective method here is the so-called exit pop-up, a dialog window, displayed when the customer tries to leave the store. It should briefly show the benefit of subscribing to the newsletter: e.g. “DISCOUNT 10 percent, our prices are sensationally low, but this is not the end of good news. Now you can get a 10% discount on your first purchase – subscribe to the newsletter” and expose a button that does not refer to subscribing to the newsletter, but to benefits: e.g. “I want this discount!”.
- Email addresses that have been obtained should be analyzed in terms of their use in purchases. Whether it’s access from a newsletter with a discount code or logging in with a registered address to the user’s account – each such event should be tracked by the system.
- Users who have already been regular customers and for whom some time has passed since their last visit should be treated in the same way as those who left the shopping cart. After detecting a departure from the established habit, it is worth sending them a sequence of three e-mails, each of which will exert increasing time pressure and at the same time promise more and more benefits to them. In this way, it is possible to bring to the store up to 30% of users who once bought regularly and now forgot about it.
Yes, I want this for my online store
As we mentioned, even 95 percent of the expenses of online stores go on broadly understood activities related to the increase in traffic. What if, instead of spending all this money on traffic on a regular basis, you spend it once, on a software improvement of your online store?
Matsuu developers can prepare modules for automatic mailing, smart shopping carts and customer recovery systems, regardless of the platform on which your store operates.
Contact our business analyst for more information. You will receive a 10 percent discount on the password “NOT ONLY TRAFFIC”.