16 Inexpensive Ways to Grow eCommerce Revenue
March 12th, 2018 by Stan Duda
Many ecommerce merchants focus on acquiring new visitors to increase revenue. While that strategy can be helpful, it’s often cheaper to focus on growing revenue from existing shoppers, by improving conversion rates and increasing the average order size.
In this article, we offer nine simple ways to improve your ecommerce site’s conversion rate, and seven ways to grow its average order size. None of these ideas are new but they are all proven to grow revenue.
This is a critical key performance indicator that deserves a great deal of attention. Most online retailers have an overall conversion rate of 2 to 3 percent based on:
Number of Orders / Unique Visitors = Conversion Rate.
That means if you have 10,000 unique visitors per month and acquire 200 orders, you have a conversion rate of 2 percent. If your average order size is $50, then your revenue is $10,000.
What if you raise your conversion rate from 2 percent to 3 percent? That’s a bump of 50 percent. You now have revenue of $15,000. How much money would you have needed to invest in pay-per-click advertising to acquire 50 percent more visitors? It depends on your cost per click, but let’s assume it is $.50 per click. That translates to about $2,500.
How do you improve your conversion rates without spending a lot of money? Here are some ideas. None are new, but they are proven.
- Add live chat. Buying decisions are frequently stalled after shoppers add items to the cart. One way to avoid this is to answer any questions a buyer may have, such as shipping, availability, or pricing. Make sure chat is also available in your checkout process.
- Have a shipping estimator in your shopping cart. This reduces purchase anxiety as your shoppers know their total cost prior to checkout. This is a sure way to increase your conversion rates.
- Offer promotions in your shopping cart. Providing an extra incentive sometimes encourages buyers to place an order. Ideally, the promotion would be personalized based on what’s in the cart.
- Offer alternative payments. Many buyers prefer not to pay by credit card. Offer PayPal or another alternative.
- Use guest checkout. Many buyers do not want to create an account. Let them place an order via guest checkout.
- Offer free shipping, with limitations. Choose an order amount just beyond the average. You may stretch a few orders into a bigger dollar value to help offset the cost of shipping. Consumers want free shipping.
- Make your site fast and secure. Site speed is crucial. Consumers have no tolerance for a slow website, especially on smartphones. Invest in SSL certificates, at a minimum, to improve security and trust.
- Have a clear return policy. Many consumers won’t place an order unless they know they can return unwanted items.
- A/B test to optimize your cart and checkout process. Try different button sizes, placements, and colors. Try a mini cart versus a traditional cart. You may see significant improvements from seemingly minor tweaks.
Remember, you benefit from even the smallest improvement in conversion rates.
Increase the Average Order Value
This is a second improvement that could have an immediate impact on your revenue. For many merchants, it’s simply encouraging shoppers to add another item to an order. Perhaps it is an upsell from an entry-level product to a higher value one. Either way, evaluate ways to increase your order size. Here are some proven ideas.
- Populate upsells, cross-sells, and accessories for all products. Many online merchants simply don’t create them to begin with. Others find that the products chosen are discontinued or out of stock. It helps if your cart supports rules or category-based merchandising.
- Offer ratings and reviews. They make a difference. Solicit high reviews and ratings on your upsell items, to encourage shoppers.
- Add live chat to product detail pages. Offering live chat on product detail pages frequently offers an upsell opportunity with your online chat agent.
- Offer incentives for larger orders. Consider free shipping or a discount for above-average order amounts.
- Offer a giveaway. This could be an inexpensive, consumable product that complements a best seller.
- Offer a subscription. This is more than increasing the average order amount; it’s a long-term revenue stream. Subscriptions are becoming popular with online retailers.
- Promote ensembles rather than individual products. Make sure the products are grouped on the product detail pages for easy purchase.
There are many other ways to improve your average order value. Good solid merchandising is always helpful.
Devise a plan to improve your conversion rate and average order value. Don’t aim at first for a 50 percent improvement. Start with 10 percent, then push it another 10 percent.
Dale Traxler is the VP – Commerce Solutions at Rightpoint. Dale has been a strong supporter and partner of Alpine Consulting. Dale has generously shared his knowledge and experience with us which we work to leverage into our client engagements.