As I said in the first blog of this two-part series, I’ve always loved commerce because it’s a simple numbers game. Here are the 5 key metrics you need to track to stay on course and win:
- Conversion rate
- Average order value
- Visit frequency
- Customer lifespan
In the last installment, we looked at what should be considered while tracking your traffic. In this post, I’ll dive into the last four. As we all face multiple unknowns due to today’s challenging and unprecedented business environment, tracking digital metrics and using the insights they provide to optimize customer experiences is even more critical.
Conversion rate optimization (CRO) is a field all its own, and I’ll summarize it as best I can in a few paragraphs, offering some useful insight, as well as a strategic way to optimize your approach.
At its core, optimizing your conversion rate boils down to building trust and confidence with your visitors as they move along the different stages of their customer journey. Whether clicking on a homepage banner, adding a product to a cart, or completing checkout, your customers need the right content — whether images, messaging, or otherwise — to reassure them along their journey.
A benefit of personalization is that instead of relying on a static, even if optimized, experience, you can offer a dynamic one. With a variety of ways to identify a user and where they are in their journey, your platform can provide content that is both personalized and personal, the ultimate way to build trust and confidence.
“Searchers” are often “buyers” in the early stages of their journey. Providing a great search experience for your visitors is an effective way to lift your conversion rate. A simple way to do this is by “searchandising” your results. Boost popular or strategic products further up the search result pages or rankings. Use search facets to allow large search results to be further refined, in-line with the buyer’s requirements such as brand, price range, or product features.
At the final stages of checkout, you don’t want to lose a sale simply because you don’t offer the preferred payment method. By offering a multitude of payment solutions — PayPal, credit cards, or one of the many interest-free payment providers in the market today — you remove a large barrier to completing the transaction.
What if shoppers leave? Perhaps they browsed a category, viewed a product, and left. Or maybe they got all the way to the last stages of checkout and then dropped off. If you’re not using marketing automation to re-engage with these customers by means of a triggered browse- or cart-abandonment email marketing solution, you’re leaving money on the table. Given that worldwide cart-abandonment rates are just shy of 70%, and email engagement (open and click-through rates) for cart- and browse-abandonment is incredibly high, no conversion rate optimization strategy should be complete without a finely tuned abandonment email sequence.
Average order value
I’m always amazed to see simple yet effective tactics of increasing average order value absent from some of the world’s largest and better-known online stores. With average order value directly correlating to revenue, it’s just as impactful as conversion-rate optimization, and sometimes the tactics involved are much lower hanging fruit. This is even more important to consider in light of our current situation, where the AOV for certain industries has dropped — Sport & Outdoor ($190.48 to $143.77) and Travel ($222.25 to $161.58) — while spiking for others — Groceries ($78.24 to $104.28) and Insurance ($97.36 to $662.32).
Establishing product relationships within your catalog enables two key drivers for increasing your average cart size: up-sell relationships (50-inch HDTV to a 65-inch) and cross-sell relationships (“would you like fries with that?”). A small nudge in the right direction can easily yield a double-digit percentage uplift in the order size.
A product bundling strategy that groups related items, whether at a discount price or merely for the sake of convenience, into a single purchase offers a psychologically enticing invitation to buy more. Regardless of whether you offer products, services, or both, a bundling plan is an effective way to drive your order value higher.
Another opportunity to increase order value is at the cart page. Personalized promotions based on cart content can encourage shoppers to add more items to qualify for things such as free shipping or other discount types.
Once you’ve obtained a customer, how do you encourage them to return again and again?
A good way to start is by providing an exceptional purchase experience. Go above and beyond simply sending a standard “order received” email. Are they a return customer? Acknowledge and thank them for it. Have they purchased a complex or expensive product? Send personalized communications on where they can learn more about the product, take care of it, or put it to best use. This is a great way to combat buyer’s remorse and lower return rates.
Marketing automation technology is your best martech ally when it comes to improving visit frequency. Pushing personalized and personal notifications across web, email, voice, mobile, and other channels can drive revisits and further purchases.
Driven by season, segmentation, or purchase history, multichannel campaigns that are targeted at individual areas of interest will keep people coming back, increasing chances of further conversion.
Driving campaigns that promote self-service through online knowledge bases and other resources can reduce cost to serve, deflect unnecessary calls, and result in an overall better customer experience.
As we aim to optimize our customer lifetime value, the last thing that remains is to implement strategy and tactics focused on increasing our average length of customer tenure, or customer lifespan.
Like tactics that concentrate on visit frequency, we can use marketing automation to keep an eye on our customers. Have customers not visited for an extended amount of time? Trigger a win-back campaign. Is a customer showing exit intent? Proactively reach out through digital channels or even in-person to encourage them to stay.
Avoid prolonged periods of silence; recognize (and if possible, reward) customer loyalty milestones and birthdays. Communicate the addition of relevant new products and content. This is a customer relationship, so we need to treat it as such. No relationship lasts if both sides ignore each other, and in this instance the burden falls on you.
Commerce is changing, and quicker now today than ever before. We’ve gathered insight from over 1,200 commerce leaders. Discover how other merchandisers, ecommerce leaders, and marketers are responding in our on-demand webinar: Reinventing Commerce: Econsultancy and Sitecore.
With a passion for growth, improving CX, increasing lifetime customer value, and reducing cost per acquisition through digital, Jay Sanderson is the Global Experience Commerce Product Specialist at Sitecore. Follow him on LinkedIn.