eCommerce Insiders

4 Profit Levers for eCommerce Growth

The new year is approaching — time to plan some resolutions for your online store.  What follows are four substantial profit levers to pull for more profits.

Ad Click-Through-Rate
If a considerable number of new customers are arriving through paid search advertising, click-through-rate (CTR) is your biggest advertising lever.  Write better ads and you’ll get more traffic and cheaper clicks.  So when this increased traffic hits your website you’ll make more sales at a cheaper cost-per-acquisition.

CTR touches on most aspects of paid search competency.  The real gains aren’t simply in writing better ads… you’ve got to be great with keyword research and account structure to make sure the right keywords match up with the most appropriate ads.  Most people don’t write better ads because they CAN’T — lousy account structure means that too many unrelated keywords are all forced to trigger the same generic ad.

Conversion Rate
You must be religiously committed to testing to improve your ecommerce conversion rate.  It takes a lot of work to bring a buyer to your online store.  Don’t flub it up with a clunky website.  Follow-through on your value proposition, with a streamlined checkout process.

Confusion and anxiety are the enemies to avoid.  Make it clear and make it trustworthy.  Trust is imparted through the professionalism of your site along with 3rd party credibility supplied by badges and customer testimonials.

Your biggest conversion optimization gains will likely come on shopping cart / checkout page.  Find your conversion optimization profit levers with testing software and have some fun!

Average Order Value
It’s a simple equation: when your customers spend more, you make more.  There’s a lot of psychology that goes into increasing your average order value.  You can cheat and just raise your prices — but that will probably result in decreased sales.

The smart ways to improve average order value involve creative promotions that kick in at certain cart values, bundling, and intelligent product recommendations.  Use the testing lever described above to discover — and keep — whatever you prove to have the greatest impact on average order value.

Repeat Purchases
Of all the profit levers, this may be the most under-appreciated   Yes, you need to invest all you can in acquiring new customers.  If you’re doing things right, however, the majority of your sales should come from your existing customers.

Employ great customer service, remarketing, and email marketing to drive additional purchases and decrease customer churn.  According to RJ Metrics, after making the initial sale, the average online retailer pulls in 94% more sales from each customer — and it takes 89 days to make the 2nd sale.  So if the initial sale was $100, three months later they may buy another $94 worth of merchandise.

After split testing, customer loyalty is the cheapest way to drive additional revenue to your online store.  Know your numbers, pull the profit levers, and celebrate your improvements.


Chris Crompton

Chris Crompton is the Group Marketing Manager at ROI Revolution, a retail-focused digital marketing agency.

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