4 Steps to Boost your Digital Profitability by 20%-60%
1. Convert existing traffic much better
You have already spent time and money acquiring the visitor to your online service, don’t miss the revenue opportunity.
- Lower bounce rates through fast loading, captivating pages. We have brought this down to under 20% for some clients. The industry average is 60%-80% (that’s the proportion of visitors that leave before engaging with the web page). A high proportion of websites suffer from page load speed issues, a lack of captivating imagery, singular call to action, missing information and social validation messaging, worse still non-sure hosting.
- Shorten or simplify the user journey. There are hundreds of ways a user can typically navigate around a website, bring these into a short, streamlined journey without obstacles. Some of our client websites allow users to visit, choose and book with only 3 clicks, the industry average for their sector being 5-8 clicks. Don’t try to be clever and force the user to ‘register’ or ‘remember their login’ or ‘sign up as a new user’, etc. They should not have to pass all of your internal tests or operational requirements to simply place an order. Strip out all but the essentials required to capture an order. You can collect marketing information or ‘create a subscriber base’ after capturing the order. Ideally, strip out as much as possible that is a barrier to capturing the sale.
- Be very careful with the payment gateway interface. A a poor configuration in this area can cost up to 70% order loss. Don’t be pressured into using your clearing bank’s technology, this is usually terrible legacy software that is light years behind what the user expects. We can recommend some highest performing, low cost providers
- Add value to the user to bring them back. Since 86% to 96% of visits typically don’t end up placing an order, you need to get some benefit from these visits. If a previous customer, nudge them through the funnel with personalisation based upon their previous visit. If a new visitor offer some value in exchange for an email address so that you can at least stay in touch.One of our high volume clients (£1m+) is achieving a visit to order conversion rate of over 14% through their own direct online service, which is 50% less expensive than all other online sources of customer orders.
2. Capture extra high propensity to spend users
This does not mean you have to go ‘upmarket’ with the client base, it could mean targeting higher volume clients, bigger order value clients, etc.
- This user base will be typically much smaller and therefore involve fewer queries (eg possibly only 5-15% of your customer base) but with a much higher value outcome. Refine your existing services to better target and satisfy your higher spend clients.
- Users making higher value purchases typically have more research activity. Provide exhaustive information so that they give up reading and simply contact you instead. Capture the lead at the research stage and continue adding value. How can you save the user’s valuable research time? Can you offer pre-negotiated discounts for a much bigger order value to save them worrying about having to ask?
- Understand their search term behaviour and create content that brings you to the top of organic search. Once achieved couple this with paid adverts for the same terms and your market leading credentials for this category will be established in the mind of the user.
- Reassure the users with strong testimonials and reviews, and offer multiple ways to get in touch, by phone, chat, email, SMS, what’s app, web forms, messenger, etc. Provide a fast and personal response with a reference number or primary contact to cement the relationship and prevent the need for the client to look elsewhere.One of our clients increase their revenue by 42% using this technique, with only 10% higher customer acquisition costs.
3. Leverage economies of scale, open up to partners
Whether an SME, mid-market or large enterprise, all can achieve economies of scale by configuring existing systems and resources.
- Leverage volume through partnerships or opening up your infrastructure to multiple sources of clients. Once the business processes and systems are aligned, adding extra volume will bring down the average cost per order and increase overall profitability.Amazon famously achieved it’s profitability ambitions only after opening up it’s infrastructure to allow other businesses to run their online business via Amazon (the flywheel effect). As a retailer it managed to increase customer product choice (driving up conversion rates) and reduce its’ average cost per order. The reduction in the cost per order is a result of these extra orders being captured through powering partner businesses (each with their own customer base and product and service handling), but through the amazon.com website. As such Amazon is taking good margin orders without having to incur the retail costs of doing so, just by allowing other companies to use its online platform.Airbnb is the world’s biggest supplier of travel accommodation without operating a single hotel.
One of our clients generated an extra 60% of gross revenue through creating a partner services division, re-purposing existing software for use by other businesses.
4. Apply revenue management techniques
Understanding the propensity to purchase at different price points for your each user segment empowers you to drive up revenues.
- Increase prices for your loyal, high propensity to purchase customers who understand your value and are prepared to pay for the convenience of a repeat purchase with a trusted provider. Having very quick and easy re-ordering facilities and a customer account service makes a huge impact here.
- Set prices at attractive points. Identify the products and market combinations that are very price sensitive, and set the price points that result in far higher demand. eg £49 will typically convert far stronger than £54. In this example, if this £5 discount increases orders by 25%, this will provide a 13.4% overall revenue increase (eg from a starting point of 100 orders). In addition to driving revenue, higher volumes can enable a lower purchase price, boosting margins further and enabling the undercutting of competition to boost market share.
- Run targeted promotions to drive repeat visits, user engagement, viral marketing, reputation marketing from delighting customers and drive higher revenues. The considerable sales uplift from the promotion will more than outweigh the discount provided, especially if your cost per unit reduce as a result of the extra volume. However this needs to either be a targeted and heavily promoted one off campaign each time, or only shown to targeted users based upon their shopping behaviour and ideally offered on products or services that otherwise exhibit low take-up rates. UK retailers rely upon promotions for 20%-50% of their total annual sales, so don’t miss this technique to drive up revenues.One of our clients achieves higher order values than the market average by offering automated discounts upon high value purchases in a personalised manner. This also drives loyalty and retains market share.