Do You Know Your P’s
From Your Q’s?
The former President of GH Bass and Vice President of Lord & Taylor sent an email stating “It’s all about the P’s of Retail: Process, Planning, Presentation, Pricing, Productivity, People and the right Product make you Profitable.”
Scott Orenstein was telling me about The Fundamentals of Retail and was interviewing me to train his new business, Brenda & Eddie how to execute Ecommerce and digital marketing the way a Google Expert would.
This is an outline of how to execute of the 7P retail strategy in digital marketing:
Process: E Commerce is a series of processes and interconnected systems that all must work together in unison. Prior to attempting to set-up marketing and advertising campaigns to drive traffic to a website, you should first beta test that your ecommerce store actually performs. This means a series of controlled tests where you send X amount of visitors to the site and determine how many of those customer progress through the shopping cart and into purchase.
Next, you need to benchmark the conversion rate
Conversion rate represents the number of visitors out of 100 that turn into a paying customers. For example, if the website has 500 visitors and 100 convert, the website conversion rate equals 20%.
Now 20% is an unrealistic number for most ecommerce stores. the average ecommerce conversion rate is between 1 – 2%. Websites that have an active a/b testing strategy being executed often times have conversion rates 500% more than the industry average.
Media/content plan knowing your customer purchasing behavior and the times of year that generate the highest yield is critical. This data can be found in near real time with Google Analytics.
Persuasive copywriting, graphic design strategies to move the visitors eye into the call to action, the color black, the color red, and the psychology of color and the influence on purchasing behavior, are very important to consider when building an ecommerce sales funnel. Understanding the key performance indicators of your how you present your products can be understood from user experience metrics such as time on page, bounce rate, exit rate and total revenue. This is also important to the placement, i.e. a targeted placement from a website that sends you buying customers.
A/b test pricing, pricing technologies according to Bryan Tracey writing for Entrepreneur magazine, he said “Be open to the possibility that your current pricing structure is not ideal for the current market. Be open to the need to revise your prices, if necessary, to remain competitive, to survive and thrive in a fast-changing marketplace.”
What most Ecommerce Retailers fail to recognize is the simplicity the internet affords us with the simple click of the back button. If the user experience or product is not what the customer wants, they hit the back button and will find it within a few clicks of the mouse.
Make sure your Ecommerce store is not encouraging the use of the back button.
In ecommerce, productivity means generating traffic that goes to the shopping cart and makes a purchase. Other desirable online productivity would be social engagement, social contests, and peer reviewed content and videos.
Engaging customers and making transactions sounds easy, but is harder than you think. Test new markets with a set budget. Determine the average conversion for the website and benchmark the conversion rate for each marketing effort against the site average.
Target customers by demographics, specific behaviors with the lowest CPA and Highest margin is what the high level marketers are able to do in 2014. No focus groups or other opinion based customer research. The anlaytics in online marketing and website analytics allows us to identify the exact customer profile that brings you your best, highest margin customer.
Do not blast your ads out shot gun style, use strategies like laser guided bombs.
If your product sucks, people will not buy it. If your WEBSITE SUCKS, people will abandon your site and think your product and business sucks just because of your sucky website!
And the metrics to prove that your website sucks are bounce rate, time on page and page abandonment rate (exit rate). Ecommerce websites need to have analytics revenue tracking so you can determine the exact keywords that produce revenue. Only optimize keywords that have proven to be profitable. This first requires testing your keywords to know the exact conversion rate and cost per acquisition of each customer. At Funnel Science, we have found that on average only 3% or any businesses keywords will produce conversions.
If you do not test the keywords of your products first, you will have poor sales, its really that simple.
Profit only comes when you connect the customer, with a product and great web technologies. One of the fastest ways to increase your profit is to A/b test your keywords to determine the words that gerate the highest conversion rate. Allocate your marketing dollars to the words and sources that have the highest conversion rates and pause your campaigns that do not perform. There is not an auto pilot function with digital marketing, however many agencies and marketing companies manage it that way.
Profit comes from a/b testing every keyword, ad, and landing page. High margins come from filtering out where the waste comes from. You need to know the conversion rate by every keyword and every source. Then you need to know your cost per acquisition and the sales to close ratio by source.