Whether you’re a fortune 500 company or a Ma N’ Pops shop down the street, if you’re doing business you certainly want that business to grow. But sometimes achieving that goal, or better yet exceeding it, is an extremely hard endeavor to accomplish. You will often hear the incorrect and overused misconception “9 out of 10 businesses fail because of X.” But this is only said to scare people either into submission (vote for me, read my book, listen to what I have to say) or because those saying it truly don’t know either.
In reality, and obviously on average, after 4 years 50% of all startup businesses will indeed close (1/3 of which will have closed while remaining profitable). As time continues on, more businesses will naturally close as is the nature of things. Given enough time, the grand majority of all business will close. How many business can you name that started in 2000, how about 1990, or 1900? But closing does not imply failing even though the two appear to be synonymous from the outside. There are those that “quit while their ahead” and there’s certainly no shame in that.
What is important to keep in mind though, and is fully intended to keep moral and spirits high, is that failure is not something that just happens, it’s a state of mind. A business fails not because failure itself has occurred, but because the business accepted failing. They either didn’t do enough, work hard enough, or more importantly, work smart enough. This is of course assuming the actual product or service is wanted.
But one of the worst excuses, and most common complaints, heard from either failing or failed business owners is that their competition was lucky for whatever reason. They scorn their competitors and curse lady luck herself for not being in their own favor. But what is clearly not understood here is there is no such thing as luck, as luck is nothing more than the residue of design. That’s saying, we have to design how the business functions well enough to allow for chance to be in our favor. If you design it well you will have greater favorable chances that arise. In order for opportunity to knock… you have to build the door. It is with that goal in mind, to increase the chances of opportunity arising, that we move onto the 3 ways a person can grow their online ecommerce business.
3 Ways To Grow Your Business Online
There are three fundamental ways a business can grow online that every manager should be intimately aware of:
- By increasing the number of customers/clients
- By increasing the average transaction value of a sale
- By increasing the frequency of purchases by customers/clients
Increasing The Number of Customers/Clients
Let’s begin with increasing the number of customers/clients your business attracts. There are only a handful of ways a potential customer can stumble across or find your business online having never heard of you previously. You could be found organically through a search engine (preferable), a referral site or directory, a website mentioning you in their content, content on social media, or through a paid for advertisement of some sort.
Organic Search Traffic
The reason being found organically through a search engine is preferable is because it’s the cheapest option while also having the greatest opportunity for attracting the most traffic to your website. Traffic is what converts into customers, and in the end, ecommerce is a numbers game. So the greater your traffic, the greater the chance you will make a conversion. That is a rather simplified explanation, as design and user experience plays an enormous role. But even then, numbers matter.
Referral sites and directories are sort of a dying breed, however some of them are still very worthwhile depending on your niche. You simply have to be careful not to have your site included on a less than reputable referral/directory website as that could negatively affect you. Typical industries where referral and directory websites are worthwhile mostly revolve around those that are service based such as doctors, lawyers, dentists, restaurants, dog walkers, house cleaners, repairmen, landscapers and so on. Sites such as Yelp, Angies List, Yellow Pages and Tom Martino quickly come to mind. Depending on your niche, there will be a number of sites you should consider being included on. Seek them out and get listed.
Being mentioned on another website and having a link pointing back to your website (an inbound link) is a great way to attract potential customers if the audience it is exposed to is great. Again it is a numbers game, if the link is only shown to 10 people with a 5% click through rate… congratulations you’ve received 1/2 a visitor. If the link is shown to 100 people = 5 visitors, 1,000 people = 50 visitors, 2,000 = 100 visitors, and so on. Of course that is only an example and other factors do play a part in click through rates for on page inbound links. Lastly it is important to understand the two ways an inbound link could be gained. The first being the natural way where someone simply mentions and links your service, product, or brand on their website after having either heard of it or used it. Where the second is more of the guest blogging route. You can write content for other sites and link back to yourself, or offer your product or service for free to be reviewed by other bloggers. Guest blogging and link building is beginning to fade away as its importance becomes less prevalent, but having quality inbound links is still important. No marketer will ever tell you having a link from cnn.com, oprah.com, or the wsj.com is a bad thing.
Social Media Content
The content you publish on social media can be found by anyone on the planet if you promote it correctly. You imagine that when you publish something, your friends, followers, and fans receive it in their feed. Which is true, but through social media search features and the use of hash tags and keywords, anyone can stumble across your content if you categorize it well. This means that not only is there still keyword research that is required, but now there is hash tag research as well! That may not sound as exciting as I’m making it out to be, but think of it as another free (save for time) marketing tool. You can easily promote content on Social Media to an audience significantly larger than your own. Attracting new users and increasing brand recognition.
Finally, a new user can find you through a paid advertisement. Whether on Facebook, Google, StumbleUpon, Reddit, or any other medium you find worthy, users can be attracted to your site… though at a cost. When discussing online paid for advertising, we are going well outside the scope of this piece. If you are not doing paid for advertisements yet and want to, please go and study up. Begin reading the material that is available online. Digest as much information as possible because there is a lot out there. It’s a rather difficult subject and the sooner you start, the better off you’ll be. Further more, if you are going to trust an outside source to do your paid marketing, be very careful who you choose. This is especially true if you don’t have a fundamental understanding of paid marketing online. Don’t be sold snake oil or have the wool pulled over your eyes because you were too busy to learn a few basics that would have helped avoided being bamboozled. Because in the marketing world, bamboozles are abound.
Increasing The Average Transaction Value Of A Sale
There’s a great number of ways to entice customers to buy more things, up-sell them, or in essence increase their total purchase value. But the methods used, and how those methods are employed, are entirely up to you. You have to test your chosen methods and give them time to not only get going, but mainly to collect data with which to analyze. In the end this can prove costly as you may well employ many methods that don’t pan out and resources will be used in the process. But once you find the methods that work for your business, in accordance to what your customers both enjoy and appreciate, the rewards will quickly be apparent.
When deciding on the methods you’ll employ to increase the value of a purchase, the first thing you need to determine is the purchasing behavior of your customers. What are their demographics? What has been purchased in the past? Are there seasonal trends for purchases? What is the existing average order value? What is their purchasing power? Find every meaningful measurement of performance and customer behavior you can get your hands on. This will largely help guide the creation of a strategy that can be implemented.
Listed below are a few generic ideas that help to increase the average transaction value of a sale. Implementing these should not be done haphazardly. You must be prepared to gather and analyze the data that comes in and adjust your strategy accordingly. Don’t simply implement a strategy and assume all is well and done. Your first few attempts may not find the success you desire. Or perhaps it’ll do better than you’ve ever imagined it could. Either way, it’s important to note that nothing can or ever will be done to perfection. It may already be great, but it can always be better. Study, implement, and test your methods so as to continually refine them.
Methods To Help Increase Average Transaction Value
People love being rewarded, and rewarding people for shopping with you is an easy way to gain repeat customers. No doubt your local coffee shop has a reward program in place, buy 10 cups get 1 free! REI and Dick’s Sporting Goods have yearly cash-back incentives on items purchased, even Western Union has a reward program where charges are limited after a certain amount has been sent. Over all it is apparent that across every industry there is the possibility for a reward program, and a better way to phrase this is as a loyalty program. As a business owner, you don’t care that a certain product or service was purchased, you care that it was purchased specifically through you. You appreciate customers business so it’s only logical to appreciate the customer giving you business. This recognition, in whatever form, so long as it is valued, is greatly appreciated by customers. You may find that people will spend more simply to meet a targeted limit. Credit Cards giving Airline Miles for purchases made quickly comes to mind. Do you believe they are only using that one credit card because it makes purchases easier or better? No, they use that one card specifically because the benefits of using it outweigh those of the others.
Social proof is the idea that people are more accepting of things that other before them have already experienced. One of the best examples of this are “Top Seller” categories or lists on websites. Most of the time these top-sellers have nothing in common save that they have the highest volume of sales. So why does it make sense to randomly show users products everyone else was buying, especially when those products don’t relate to the reason why they were originally visiting the site? Once you think about it for a moment, social proof percolates to the top as the reason. Simply reflect for a moment on all the things you’ve purchased in your life because they were trendy, popular, or hip. Between toys, clothes, books, gadgets, cars, and everything else in life you’ll realize most of what you’re purchasing you’re purchasing because others have purchased it before you. It’s a sad fact but humans do indeed act like lemmings. It’s not our fault either, we’re social creatures and it’s a hard wired characteristic to act like those around us. Use social prrof to your advantage. Show top selling products, or have an area to show which Facebook friends liked a page, you can even put a ticker on the total number of specific items sold. In the end, just show your users they are not the first to purchase something, and rather that they may become the last or miss the show, and they will be driven to buy something they may not have otherwise been in the market for.
Contests & Prizes
This point is pretty self explanatory, people love competitions, lotteries, and sweepstakes, and anything else where things can be won. But you may wonder exactly how throwing contests and giving away prizes increases average order sizes? If someone is shopping on your website and in the meantime finds out there is a contest for something that is highly desirable, and they also realize that their chances of winning aren’t that great, they may likely just outright buy the product rather than feeling bad for not winning. This also falls back onto the idea of social proof. If you witness many people flocking to something, wanting and desiring it, and you have the means to purchase it that moment rather than wait like everyone else, you are driven more to acquire it. You know you’ll likely not win the contest, but still really want the product, so you get it. There are many other marketing benefits to throwing contests and giving away prizes, but the idea of missing out on something everyone wants is a strong one not to be underestimated.
Bundles / Pre-Made Packages
One very common tactic that is employed to increase average order value are for products that have suitable “companion products” that can be sold together. How this is displayed and managed is dependent upon your preference. You’ll have to decide whether the bundles are pre-made, customizable, or both. Obviously giving customers the freedom of choice is a good option, but if you can create the bundles you know customers want, you avoid them having to create them themselves. This reduces the number of steps that will need to be taken before a purchase is made, and cart abandonment rates should be lower as a result as well. Be creative and test different bundle options, you may be surprised to find what works. In the end, it’s a rather inexpensive way to help boost sales overall, but more specifically it helps to promote products that may not have much attention otherwise. For example, if you own a website that sells shoes, shoe sales might be ok, but your large stock of various colored shoelaces may no be selling. Giving the option of additional shoe laces (types and colors) when deciding on a shoe not only puts that companion product in front of the eyes of a customer, it also gives the illusion of customization and additional options to make their product more unique. The same could be said for insoles and socks. Perhaps even color coordinated… The point being having bundles and even pre-made packages available helps to create a chance for an up-sell, thus increasing the overall average order size.
Buy X Get X Free
There is no better way to get someone to buy more than they originally intended than to offer a Buy X Get X Free deal. In essence to the user it would appear that by meeting the mark, they are receiving free merchandise. But in reality it’s a numbers game. Perhaps your stock was too big or was difficult to get rid of, Buy X Get X Free. Maybe your stock is going to expire soon or become outdated, Buy X Get X Free. Maybe you really want to promote a new product, Buy X Get X Free. Really, if you are needing to increase your average order size value, this method is a great place to start. The only trick of it is understanding how many items need to be sold before some can be given away for “free” while keeping a profit. There are numerous reasons when you would want to use this method, a few were mentioned above, and as a user it’s difficult to avoid such deals. Of course if I’m buying something already I want free products. Makes the purchase that much better… you feel like you’ve won something. Sometimes you don’t even need the other items… but you’re glad to have them. You know. Just in case…
Must Have Accessories
How often have you purchased one single product, and then a slew of other companion products to go with it? The accessories that accompany all products are a great way to help increase total order value. Buying some leather boots, you’ll want leather protectant. Buying some new running shoes, you may need some therapeutic soles. Buying a new watch, you may want some interchangeable wrist bands to go with it. Sometimes, it’s not the main product itself, but the available accessories that accompany a product that drive all the profits. Take video game consoles for example. Both Microsoft, Nintendo, and Sony sell their console systems at a loss. They do this because they know there going to rake in the dough on the accessories, games, controllers, cables, headsets, and anything else they can conjure up. The only concern is making it very apparent that accessories for certain products are available, and presenting those products in an appealing manner.
Goodwill & Charity
People love knowing that there are still good people in this world, and better yet, ethical, conscientious, and mindful businesses. When you make it apparent that a percentage of proceeds go towards some charitable cause, people are more willing to buy more than needed, or originally intended. Perhaps they’ll buy two, one being for a friend or family member. This is especially true if what you are supporting aligns with what your customers appreciate. If you’re an outdoor apparel store, donate to rebuild or maintain open lands, forests, or preserves. If you’re a toy store, donate to a children’s hospital. If you’re a pet store, donate to the humane society. First of all, you should inherently be kind enough to do these things and give back to the community. Though if you’ve forgotten somehow that that’s the right thing to do, there’s no better time than now. And it’s better late than never. You should soon see your customers response to your efforts, either in appreciation or direct sales.
Increasing The Frequency Of Purchases
The cost of acquiring a new customer can often be substantial depending on the means by which they are acquired. Sometimes it’s easiest, and cheapest, to try and get existing and previous customers to make another purchase. Again, we could call this repeat business, or reacquiring customers, but it’s better phrased as attracting loyal customers. We don’t care that someone needs to buy something, we care that they’ve made their purchase through us. Your customers loyalty to your brand should be highly valued and greatly appreciated. If you own a store front, or through watching your online analytics, realize that you have few repeat customers, that should signify that something is dreadfully wrong. Of course, this is unless you sell a product or service that rarely needs to be purchased again. But for most businesses, they would love to see the same returning customers. This shows, in the least, that some of your customers truly appreciate what you offer. Enough so that they are willing to keep returning. This means a lot, and is a very, very good sign.
But what can you do to increase the frequency of purchases? For starters, you should know that if what you sell or offer is not wanted, or in the least appreciated, or presented in a good way, nothing will help to increase sales. Sometimes it’s a hard pill to swallow, but if you don’t notice a positive reaction to your products… well it’s time to call it for what it is. Sometimes it’s better to quit when you know you’re going to lose than suffer for no reason in a vain attempt at success. But if you know your product or service is wanted, what then can you do to increase the frequency of purchases? Well as it turns out, quite a lot.
Give Customers A Reason To Have To Make Another Purchase
Of course this should be done tastefully. For instance, don’t create your own non-rechargeable double-a type battery that can only be purchased through you for your product. This will only enrage customers. As another example we can even look at Apple. Every few generations their phones and laptops will have the cables and cords changed. Do you think this is because they are gradually improving upon their performance? Probably not. Now ideally you would imagine that these would be kept the same so you can still use all the old devices and cables you’ve accumulated over the years. But for every device that is not compatible or cord that doesn’t work, replacements must be purchased.
This is one part of Apples strategy to force customers to make another purchase from them. In fact, most of what Apple does tries to keep everything streamlined and simple for people to use. Apple devices sync up, you use the cloud, and everything seems to be honky dory. Of course their products are great, but what they’ve done is made it so your photos, music, work, and play are all across devices that work well with each other. This doesn’t necessarily force the issue, but if you have an iPhone, iPad, iPod, and computer from apple, they make all of their devices work seamlessly together. It’s almost worth it to buy everything from Apple that you use simply for the convenience.
You would not believe how often the statement “Because it’s just easier” is uttered when you ask people why they use predominantly Apple products. Again, Apple products are high quality and without a doubt wonderful. But often times their price doesn’t exactly compete well with their rivals. Yet still… people who use Apple stay with their products even when better products are available.
Outside of Apple though, what are some ways you can get a customer to feel or actually need to make another purchase from you? Well there are really only a handful of ways to make that happen. They include, but are not limited to:
- Products that expire (This can be food, chemical compounds, filters, or anything else that time/use can destroy)
- Products that need part replacements (Items that can become damaged over time and need fixing)
- Products that have or need a specific supply of something to function (The Keurig coffee machine comes to mind)
- Products that people can’t get enough of (This can be any item really that is popular)
Generate A Greater Amount Of Traffic
As we discussed earlier, there are a number of ways to attract a greater amount of traffic to a website, whether it be new or returning visitor. Obviously if you want to increase the frequency at which purchases are made, you will likely want to increase the amount traffic that visits your site. The more feet that travel though your door and the more eyes that are laid on your products, the greater the chance that some of those eyes will be caught by something they like and a purchase will be made. But how do you increase traffic to your website? There are only a number of ways that you can attract visitors to your site, those include, but are not limited to:
- Gaining Repeat and Loyal Customers
- Email Marketing
- Paid Advertising
- Social Media
- Direct Traffic
- Referral Traffic
- Organic Traffic
Create Alternative Reasons Users Might Visit A Site
What can you do to attract someone to your site that is not in the market to purchase anything? Give them a reason to visit your site that does not involve buying anything. Why would you want visitors on your site that aren’t in the market to make a purchase? To convince them otherwise. It is for this reason that so much online in the form of apps, tools, games, and everything else is offered as free nowadays. Businesses create content that attracts visitors so that they might then be able to eventually sell something to them.
Point in case, this is exactly what Google does with their search engine. They offer that service for free, and what a wonderful service it is. But by grabbing up some 80% of the online search market share, they then have an extremely large audience to show ads to (which they charge for). Now imagine all of the other Google services we use for free, from YouTube, Gmail, Google Maps, and so on. Google doesn’t offer these services for free because they’re nice. They offer them for free to entice visitors to use their services, and be shown other services from Google that they might want to use (in essence they’re selling a free service). You might wonder why they need to sell a free service. Because their free services when used is what predominantly drives their overall revenue.
So what are some alternative ways to attract visitors to a site beyond selling them something? Well, this list is as expansive and as numerous as you are creative. You can create tools that help people with their daily lives, perhaps a local weather app. Provide enjoyable games that have a rather high replay value. Present information that would be deemed important to your sites audience, this typically revolves around topical news. Educate your visitors on things they wish to learn more about. Educating is different from informing in that you’re teaching, not telling. Provide promotions of some sort, perhaps weekly sales that are extremely time sensitive and gives the illusion that an opportunity will be lost if a user doesn’t act quickly. Contests and prizes are obviously a great way to get people to your site, at least to sign up for them. Problem is, once they’ve signed up you need to craft another way to keep them on site as typically they’ll travel elsewhere.
Though one of the most powerful ways you can get users to both visit and return to your site is to create a sense of community where users can engage, share, and communicate with one another. Community involvement is important both in real life, but surprisingly even more so online. The internet is capable of creating the feeling of a community with different people all over the world, of whom have never even seen the other people in real life. This is an important idea. If you create a forum, begin and direct a discussion, and manage and participate in that discussion… your business becomes much more personal to people. You are no longer just the provider of X product, but a reason to get on the internet. Think of that for a moment and its importance. What if you could make your website a place where people actively want to go? The trick obviously is to create that sense of community, and what exactly the sense will be. Self help? Small business advice? Family support groups? Exercise routines? What you decide on will largely depend upon your business. But it is largely advised that no matter your industry, you should attempt to connect with your users and create a sense of community where you create the need to visit your site, not just the want.