Levers to optimise your e-commerce performance

Afew weeks ago, I wrote about the e-commerce formula and its importance in understanding the factors at play that drive the performance of one’s e-commerce business. In that post, I deconstructed each variable in the formula and in this post I will address the levers that influence the performance of each.

Let’s get started!

Visits:  These are the total number of times potential customers have come to your website. 

Question is, how do you get visitors to your site in the first place? Visitors are generated from your marketing activities which create awareness of your brand and then lead to potential customers visiting your site/app. Your marketing activities can range from digital activities such as running Facebook ads, Google display, search marketing to offline activities like flyers, billboards, roadshows and so on.  

In order to select the right marketing strategy, one must first fully understand their target consumer. You must be able to describe your target audience's demographic characteristics like age, gender, location, socio-economic characteristics, likes and dislikes and media consumption behaviour. Once you have this, you will now be able to make informed choices on what marketing activities to run. In addition to understanding your target consumer, make sure you have a budget in mind that will guide your media choices to get the most out of your investment. As is the nature of doing business online, it is essential to track the performance of each of your marketing activities and frequently optimize your creative, budget investment, targeting or channel mix.

Conversion Rate (CR) - This is the rate or proportion to which you receive orders from a given number of visits. 

Once you have landed on your marketing strategy and launched it, you should start to receive visitors to your site/app. You have successfully created awareness for your brand, and stirred an interest enough for potential consumers to act on your marketing message by visiting your site/app. The first hurdle is complete. This next hurdle is the most important as this is where the rubber meets the road. This is money time! 

At the point that a potential customer lands on your site/app, this is your time to shine. You have a captive audience that you need to close the deal with.

First things first, have you covered the bases to make a good first impression? Here are 4 practical tips to ensure you do not lose your potential customer from the outset.

In addition to the above tips:

• Landing page alignment: If you are running digital ads, ensure that the landing page you have redirected the consumer to, aligns with the message that was on the advertising creative. This is a very common mistake that is easy to fix and will avoid high bounce rates from customers who feel disoriented when landing on a different page than was expected.
• Pricing alignment: Ensure alignment on pricing between your advertising creative and the products listed online.
• Optimise the journey to conversion: Once your potential customer is viewing a product, it is imperative to ensure there are no distractions like pop-ups that can prevent completion of the buying process. Also ensure the path to conversion has the least number of clicks. To achieve the optimal number will require testing, learning and optimising to find the sweet spot.  
• A/B Testing: Conversion rate optimisation requires a suite of strategies which work in collaboration to drive the sale. A/B Testing should be at the heart of your conversion rate optimisation activities. This entails creating a list of hypotheses as to why your visitors are not converting and outlining tactics to experiment to prove or disprove the hypotheses. Some of examples of hypotheses might be:
• Hypothesis: Visitors need to have seen reviews on the products before buying; Tactic to experiment: Social Proofing or Product Reviews
• Hypothesis: Visitors feel our return policy is not flexible; Tactic to experiment:  Flexible Return Policy on a specific category or collection of products
• Hypothesis: Visitors cannot see the Add to Cart button; Tactic to experiment: Button colour/font/size or button placement on page

Average Order Value (AOV) - This is the average value of the orders that are typically purchased on your website.

Your average order value is very much a factor of the type of products you sell. For example if you sell cars, your AOV will be very high, if you sell fruits and vegetables it would be much lower. If you sell a mix of high priced and lower priced items, your AOV will be determined by the volume sold of each of the priced items.

 To optimise your AOV look to the following:

• Product Catalog: Increasing the assortment of items available at different price points is one way to optimise your AOV. For instance if you sold mobile phones priced at less than Ksh 15,000 but your product catalog increases to include more expensive phones priced at Ksh 25,000 - Ksh 50,000, your AOV will most likely increase if these start to sell aggressively.
• Basket Size: This is the number of items sold per order made. The larger the basket size or items per order, the higher your AOV will be. There are several tactics one can adopt like cross selling complimentary items, minimum amount incentives and so on to increase the basket size.  
• Merchandising: AOV can also be optimised by the way products are organised on the various pages. Experimenting with placing more expensive items, higher up on the page as opposed to further down the page, could influence a purchase of those items.

Optimising your online business’ performance is like a science experiment.  With these tactics in your toolbox along with an understanding of how they affect each variable in the e-commerce formula, you will be able optimise strategically.