Driving traffic to a website or product page can be fairly straightforward when you only look at top-funnel acquisition. For example, many eCommerce stores report a 2.69% click-through rate for their PPC ads.
However, if 3 out of every 145 people viewing your ads clicks through to your product, that doesn’t necessarily translate to 3 purchases. Ad clicks don’t drive your bottom line if you aren’t converting click-throughs into sales.
A high conversion rate, even with low click through rate, will drive more revenue than a high click-through rate with no conversions.
That’s important, considering eCommerce sellers pay an average of $0.45 per click for a Google Display Network ad and $1.16 for search ads. Without revenue to offset those costs, your ad spend will eat heavily into profit.
According to WordStream, the median conversion rate for eCommerce is 1.89%. That means with a click-through rate of 2.69%, and 1000 ad impressions an hour, you’re selling to just under 12 people a day (24 hours). On the other hand, if you have a conversion rate of 6.25%, you could make 38+ sales in that same period, from the same number of paid for clicks.
Driving that conversion has been the subject of thousands of hours of research. Using tactics like audience optimization, fast delivery, and removing obstacles to purchase can help you make the most of every visitor.
Improve Your Ad Targeting
Targeting is time-consuming, expensive, and requires market research. But, if you have a rough idea of your audience, you don’t have to break the bank on broad research. Instead, you can focus efforts on A/B testing ads, eliminating non-converting targets, and improving what you have.
Trim The Fat
Long-term monitoring will help you determine which targets convert, which keywords convert, and which audiences do so. Monitoring the click through and conversion rate of keywords, audiences, and ads over time will help you eliminate poor performers.
Optimize Your Assets
While changing audience targeting can improve conversion, it’s important to verify the audience and not the ad, keywords, or assets are the problem. This means reviewing ads to ensure that product photos, language, and messaging match the audience.
Long-term A/B testing with different ads, tweaking images, and occasionally using social media to determine how different types of messaging and images perform can be a helpful part of research.
Targeting ads means ensuring the people who see your ads are the most likely to purchase your product.
Use market research, surveys, and validate assumptions about your audience and problem/solution marketing. Here, you might also want to consider where your audience is, what channels you should create content for (whichever ones your audience prefers), and what their goals are.
Improve Your Conversion Rate
Your products, listings, websites, and landing pages have to be optimized to convert a sale. If you sell on a marketplace, follow best practices for product listings. Ensure all relevant information is above the fold and in product photos, and offer fast delivery options.
If you’re selling on your own D2C website, you’ll have a slightly different playbook, especially when it comes to acquisition, but you can tap into many of the same drivers for purchase; fast delivery, urgency, and ease of purchase.
Promise Fast Delivery
This is highlighted in how prominent fast shipping filters are on marketplaces like Amazon and Walmart.com — it’s something that shoppers look for, and fast shipping boosts conversion rates across sales channels.
And if you’re trying to build a multi-channel business, with 70% of consumers comparing products on Amazon before buying them elsewhere, you need to match the fast delivery speeds to compete.
Create a Sense of Urgency
Many stores use near-constant sales with discounts and timers to prompt conversion, but if you run a multi-channel eCommerce store, this tactic simply does not work.
It doesn’t help your bottom line, it isn’t scalable, and it could even get you delisted.
Instead, you can utilize delivery timers to encourage purchase so shoppers can get their items ASAP, and real-time inventory counts to show there’s a risk of selling out.
Shipping timers showing when an item will arrive if ordered by X time can help consumers move through the indecision stage. Tools like Deliverr offer these tools as part of your solution, so you can boost conversion by letting customers know exactly when their order will arrive.
Show real-time stock to build urgency. Showing inventory levels means consumers trust their product is in your warehouse and can be delivered quickly. Of course, this does mean managing stock across your channels, ensuring you have inventory to meet increased demand from ads, and that you don’t oversell.
Make It Easy To Purchase
Finally, you should address some other common blockers to purchase. Buyers worry they don’t know what they’ll get, they won’t be able to return products they don’t like, and they’ll end up paying for shipping on something they don’t even want.
- Add clear product images and a robust description that has all the details a shopper may want. This should include, where relevant, size, color, special features, and scale.
- Explain your return policy and make it easy for shoppers to find. Put it in your FAQs, highlight it in your purchase process, and call it out in your help center.
- Offer free shipping and returns to lower any risk that customers take. You may have to balance your pricing to reflect any added expenses.
Tip: Calculate your fulfillment cost to see how much free shipping would cost you.
Improve Customer Lifetime Value (CLV)
Customer lifetime value or CLV is, ultimately, one of your strongest tactics for improving ad ROI. Once you’ve convinced a customer to place an order, convincing them to order more is easier.
The “foot in the door” study shows that people are significantly more likely to accept a follow-up request once they’ve committed to an initial request. That means even small investments in increasing customer lifetime value can have a huge impact on the total value of a customer.
For example, one study showed that 41% of average revenue is pushed by less than 10% of customers making repeat purchases.
Upselling is the easiest way to increase shopping cart value, which improves the customer value even if they never come back.
However, upselling can be difficult if the customer doesn’t yet trust your brand or products. Make sure you have good reviews on product pages, ideally with customer photos and interaction. Gaining those reviews should be part of your sales strategy.
You can also use popups, recommended items, and perks like “Free Shipping over $35” to drive shopping cart value up. Here, it’s important to ensure that costs remain equitable and that added shopping cart value is worth the investment.
Once you’ve made your first sale, it’s important to follow-up up with an attempt to reconvert the customer. Depending on your products, the time to do so might be right away, it might be in 6 months, or it might be in 2 years.
For example, a fashion company can offer free shipping discounts or product discounts in the packaging. A company selling vacuum cleaners might want to offer “Free shipping on your first order of replacement filters & bags”, and a company specializing in tools would probably want to time offers to holidays or other high sale points.
Here, it’s important to use reconversion tactics based on the customer, limit how many asks you make at once, and then follow up. For example, if your reconversion window is further away, you want to move customers to social media or an email list.
Subscriptions are the “holy grail” of eCommerce revenue because they offer near-guaranteed recurring revenue from a single customer. Not all stores can offer subscriptions, but you can get creative when it comes to supporting products. If you can get a customer to commit to a subscription of recurring refills on coffee filters, toilet paper, new shoes, or toiletries, you can greatly increase the total lifetime value of that customer. If your products are consumable, fill a need, or require replacement parts or accessories, a subscription might work for you.
Driving a new sale is always cheaper than driving the initial one. For that reason, the more times your customer comes back to make a new purchase, the greater your return on investment for that initial ad click.
PPC ads are one of the most popular tools for driving sales. They’re also one of your largest expenses in terms of customer acquisition. Improving return on investment will quite simply save you money, while offering room for increasing ads and sales to scale your store.
About the Author
This is a guest post from Rachel Go, senior content marketing manager at Deliverr. Deliverr provides fast and affordable fulfillment for your Shopify, Walmart, Amazon, eBay, Wish, and BigCommerce stores, helping to boost sales through programs like 2-day delivery for Shopify, Walmart 2-day delivery, eBay Fast ‘N Free, and Wish 2-day.
Deliverr’s FBA-like multi-channel fulfillment comes with clear pricing, easy onboarding and a hassle free experience so you can focus on growing your eCommerce business.
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