May 23, 2023 – By Hawke Partner
This is a guest blog from our partner, Tydo. Tydo is a business intelligence platform for ecommerce brands, retailers, and agencies that aggregates your data into simple, actionable reports.
Launched a successful ecommerce business? Great.
Built the infrastructure to support increased sales, traffic, and customer interactions? Excellent!
You’re ready to grow. Why should you pursue economies of scale for your ecommerce business?
- Increased revenue and profitability. The most obvious, highest priority outcome of scaling your brand.
- Competitive advantage: Scale gives you the opportunity to offer a wider range of products, a deeper customer experience, and more efficient operations. This can help to attract and retain customers, increase brand awareness, and stand out from competitors.
- Flexibility: Once you’ve invested in infrastructure, finessed your tech stack, and grown your team, you can create a more agile and responsive business.
- Sustainability: Continually invest in your business and you’ll stay ahead of the curve, poised for future success.
Scaling an ecommerce business takes careful planning and execution. As yourself questions like:
- What are your conversion rates and how can you improve them?
- What are your blended customer acquisition costs and how can you reduce them?
- What is your customer’s product purchase path—and how can understanding it give insight into your acquisition and retention efforts?
Let’s dive in & learn how answering these questions can lead to rapid growth!
1. What are your conversion rates and how can you improve them?
Your conversion rate is the percentage of users who take a specific action. Divide the number of conversions (or actions taken) by the total number of visitors to your store.
Conversion rate is like a recipe.
Recipes provide the guidelines for a dish, but you can always make it your own—add a bit of this, and test some of that. After you experiment, you see what works to create the perfect dish!
Increase your site’s conversion rate with clear, impactful messaging, imagery, and landing pages. The higher the percentage—the higher the actions and sales!
Tip: It’s not just about driving more traffic to your website. While you want to increase traffic, you also want to monitor the quality of potential customers. The goal is to convert them from browsers to shoppers. Focusing on improving your user experience and building an easy-to-navigate website are two ways to accelerate a customer’s time to purchase.
5 conversion rate optimization (CRO) strategies that accelerate the path to purchase:
- Think of call-to-action buttons (CTAs) as communication points. They call out the desired action you want the visitor to take. Make them a focal point.
- Craft the perfect product detail page (PDP)
- Analytics tools, such as Lucky Orange’s heat mapping, are one way to learn more about how your website functions and what visitors are clicking on. What’s working? Where are there difficulties? Where can you make improvements with a call to action?
- A/B testing is another way to learn how changes to your site impact performance. Some of those changes—copy, imagery, and website flow—will earn you an improved conversion rate. Lean into what works!
- Use a quiz to help customers find ideal products. Jones Road Beauty uses Octane AI to connect shoppers with perfect foundation matches. Their quiz captures emails and helps Jones Road build a personalized relationship with the customer (and shopping experience).
Understanding how to improve conversion rates helps grow your business by converting browsers to buyers. Improving your user’s on-site experience accelerates the path to purchase.
2. What are your blended customer acquisition costs and how can you reduce them?
Customer acquisition cost (CAC) is the cost of acquiring a new customer through your paid marketing efforts. Blended CAC includes all your marketing channels.
Why is Blended CAC important? Today’s ecommerce businesses must be able to zoom out and see how all their advertising efforts impact other key metrics.
3 tips to decrease your blended CAC
- Build landing pages. Optimized landing pages are an ideal (and quick!) way to deliver information to potential customers and drive conversions. Less friction = quicker purchasing decisions.
- Drive organic traffic with SEO. With paid marketing costs on the rise, brands should also use organic strategies for driving website traffic. Create SEO-optimized product descriptions to rank better in search results and write product descriptions that highlight benefits (over features). Be sure to incorporate keywords into all content (from headlines to alt text).
- Leverage influencers and affiliate marketing programs. Some brands find it cost effective to work with influencers to create content (that’s often more engaging for customers).
Brands need an understanding of blended acquisition costs in order to increase their marketing reach and revenue—without breaking the bank.
3. What is your customer’s product purchase path—and how can understanding it give insight into your acquisition and retention efforts?
Your customer’s product purchase path is the journey they take across channels and campaigns to convert from a prospect to a customer.
Understanding a customer’s path allows you to:
- Identify the traffic sources and channels that drive the most conversions—and narrow focus on channels that have the biggest impact.
- Identify key touchpoints and friction. Knowing these points can help you optimize your acquisition and retention efforts by improving the customer experience at each stage of the journey.
- Identify opportunities for upselling and cross-selling. When you know which products your customer frequently purchases, you can offer complementary products related to their initial purchase.
- Identify the types of products and campaigns that are most popular. This data can help you develop targeted marketing campaigns to promote these products to new and existing customers.
- Tip! Launch ad creative and campaigns for that specific product. Also consider creating a landing page for that best-selling product. Then, adjust your retention efforts to push your repeat customers towards those top-performing 2nd and 3rd purchase products. Want to pull this off? Customer segmentation is key!
Unsure how to calculate your product purchase path? Use Tydo to see a high-level overview of your store’s key performance metrics and to answer questions like:
- What’s my site’s conversion rate?
- What are my highest-performing products?
- What’s the percentage of first-time and repeat customers driving sales
- Which three products are purchased most frequently as a first purchase? Second purchase? Third?
Optimizing your customer purchase path helps your business eliminate friction, target high-performing products and campaigns, add opportunities for upselling, and give better insights into retention.
Leverage your store’s analytics as you scale your ecommerce business
How? Leverage Tydo’s free Platform. Tydo connects your data sources (the tools and channels you love) in one spot to create a single source of insight. We help world-class brands like Madhappy, Birthdate Co., and Dose supercharge growth!
If you’re looking for custom reports, check out Tydo Custom (starting at $1K/month). Get paired with one of Tydo’s on-demand data analysts, and we’ll build a dashboard fit for you and your business needs. If you’re interested in chatting with Tydo, book time here.
About the Author:
Kate calls Philadelphia home and has a passion for building educational marketing content for DTC brands and relationships with Shopify partners. She currently works at Tydo, a Shopify app that connects your brand’s data, marketing sources and tools to solve your biggest problems and uncover your biggest opportunities.