When it comes to generating more revenue, some eCommerce startups focus heavily on acquiring new customers by increasing the traffic. Maybe that’s the right choice for them especially if they’ve just rolled out their store or if they haven’t gained much traction in their niche circle.
However, if you’ve been in the industry for a while, aside from customer acquisition, you’ll need to look at other measures as well to generate more revenue. In fact, according to
#1. Focus on KPIs
When a prospect visits your website, there are many things you wanted them to do and it isn’t just limited to selling your products. Aside from selling, you also want them to download your mobile apps, sign up to your email list, and so on.
With that said, whenever you persuade your visitors to take an action, make sure it is in line with your business goal and ultimately helps you generate more revenue in the long run.
How would you figure out whether your marketing tactics are in line with your business goals? It is by laser focusing on KPIs (Key Performance Indicators).
The KPIs of your business will help you understand what works right for your business and what changes are needed to be done in order to make more sales and more revenue.
Some of the common ecommerce KPIs are:
- Conversion rate
- Average order value
- Shopping cart abandonment rate
Let’s look at an example of how focusing on KPIs can help you generate more sales and more revenue.
For instance, if you found that average order value of your store is too lower than your industry standards, it clearly shows that you’ll need to come up with strategies to improve AOV of your store.
Evidently, KPIs will tell you what you should be doing next and what strategies you’ll need to prioritize.
#2. Reanalyze your sales funnel
Needless to say, loyal customers are the real asset of your company. However, the truth is not every visitor who engaged with your brand in the early stage of sales funnel (for e.g. prospect who created an account or subscribed to your email list) is necessarily going to be your customer.
It is quite common that many customers will drop off during the progression in the sales funnel. Better understanding your sales funnel will help you identify the loopholes in each phase of your funnel and identify what measures you should be taken in order to fix the loopholes.
Let’s look at various phases of the conversion funnel.
- Awareness stage – This is the stage when your prospects visit your website for the first time. In this phase, you can focus on building a relationship with them by encouraging them to sign up to your list or register an account.
- Conversion – In this phase, your goal is to activate the users by persuading them to take certain kind of action like buying a product from your ecommerce site, etc.
- Retention – In this phase, your goal must be to make your customers more engaged with your brand or reactivate them if they’ve not engaged in a while. For an ecommerce store, it is about turning your existing customer into repeat buyers.
In fact, if you succeed in nurturing your leads throughout your sales funnel, you can ultimately increase the customer lifetime value.
#3. Conversion rate
No matter how heavily you focus on driving traffic to your store unless you improve the conversion rate of your store, you’re not going to make any profits.
Without a doubt, conversion rate is one of the most important metrics you should focus on while selling products from your store.
Here are a couple of common tips you should follow in order to increase the conversion rate of your store.
- Create landing pages that are tailored to each marketing campaign.
- A/B test different elements on your landing page to check which one works better when it comes to generating sales.
#4. Increase average order value
For most of us, increasing the revenue is all about optimizing the conversion rate of your website. Apart from conversion rate, you should focus on another important metric that can bring in more revenue to your table – average order value.
Average order value is all about encouraging your customers to spend more money when they do purchase.
Here’s how it is calculated.
AOV = Total revenue/number of orders
Here are a few ways to improve the average order value of your ecommerce store.
- Sell more: Focus on selling more products whenever a customer purchases a product.
- Offer incentives: Entice your customers to spend more on your store by offering incentives for a minimum spend.
- Upsell: Upselling is a sales tactic that encourages customers to buy an expensive product or something additional along with a purchase.
- Cross-sell: It is yet another sales tactic that encourages customers to buy a related product when they purchase a product.
#5. Raise the price
Increasing the price of your products is a quite obvious way to improve the revenue from your online business. That said, if you hike the price, chances are you’ll end up making less number of sales and thereby less revenue.
How would you raise the revenue without making your customers disappointed?
Offer different pricing structure:
You might have found how SaaS businesses offer different pricing structure on their pricing page.
In almost every market even in the SaaS business, cheaper version outsells the expensive version. But in order to sell more expensive versions, a common strategy among SaaS business is to design a combo version and label it as the ‘the best value’ or ‘most popular’.
That’s SaaS business. How would you implement that strategy in your ecommerce business?
Take a look at an example of GelPro.
Amazon sells GelPro floor mats with different colors at different prices. As customers are more likely to pay more for a perceived upgrade, this pricing strategy can help generating more revenue.
#6. Customer retention
The best thing about focusing on customer retention is that it is a lot cheaper method than acquiring new customers. According to a study, only 32% of your customers are likely to place a second order in their first year as a customer.
If you can learn from that 32% and apply the findings to the rest of your sales funnel, chances are you could make more revenue by retaining more customers.
In addition, comparing to customer acquisition, customer retention is much easier as your existing customers are already aware of your brand.
Below are a few helpful tips if you’re looking to retain more of your existing customers.
- Remarketing: Remarketing is an approach to connect with your previous customers by positioning targeted ads specifically to them.
- Nurture your leads: Building an email list and nurturing your leads is one of the best ways to encourage them to return to your store more often.
Would you like to add more points that can help increasing the revenue without increasing traffic to your store? Share your tips by commenting below.
Images: ”Electronic commerce highlighted in green, under the heading E-Commerce. /Shutterstock.com“
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