Increase Online Sales By Raising Your Average Order Size

Most conversion rate specialists focus on just increasing conversion rates thinking that it will have a trickle down effect on revenue overall but to really increase revenue you have to get much deeper then simply conversions rates.

Conversion optimization will and should always be a part of increasing your online sales but there are more ways to increase sales than just conversion.

Increasing sales holistically that has sustainable impact across your business in todays economy is tough. Simply relying on one mechanism, the humble little A/B or Multivariate test, to shoulder the burden of  growth is a bit unrealistic. Sure you can have some serious gains in the short term and if you get lucky in the long term but far more often than not you’ll need to stretch beyond simple conversion testing.

Increasing average order size is one way you can have a big impact on revenue and it fits nicely with testing to find the right offer that will have the biggest impact on revenue.

Here are a few ideas that you can try to increase online sales and at the same time raise your average order size.

Bundling

Retail stores do this all the time. By combining several like or related products together into one, they not only raise the value but they also create a new product for sale that didn’t previously exist.

Cross-Selling

A different spin on bundling, instead of repacking companion products together, keep them seperate and   cross-link them to each other. Take care with this one though, as a general rule, don’t place more than three or four on a page—any more will run the risk of overwhelming the customer. And as always don’t just add – test, test, test.

If your budget allows, you may consider using a relational database to help you suggest dynamic cross-sells based on consumers’ shopping behaviors like Amazon.

Up-Selling

This technique is often either under utilized or over utilized, there seems too not be any middle ground on the Internet here.

Adding up-sells is probably the biggest bang for your buck when it comes to increasing your average order size. Mostly because it’s offered at a point when your prospect has already taken a buy action and is already in the buying mode, you’ll have no better opportunity to increase revenue that at the point of sale.

Up-sells can be positioned on all product pages, as well as on the shopping cart and at various points throughout checkout. Also, make sure theup-sells make sense and  complement the main product sale.

Here’s an example up sell flow to help spark your thinking.

Down- Selling

Increasing sales and average order size through down-selling can be a tricky art. The difference between a down-sell and an up-sell is that in a down-sell the prospect has said no to a buy offer and it’s a last ditch effort to save the sale. In the case of an up-sell they have already purchased and you are simply offering an additional usually complementary  item.

Down-sells are a great opportunity to offer a steep discount just to save the sale so that you can get them to buy from you again down the road. Which brings us to our next point.

Follow -Up Emails

The humble follow up email is vastly under utilized when it comes to increasing sales.  It  has become standard to send a confirmation email after an order, confirming the purchase was completed. But very few online retailers use this transaction email as an opportunity to sell. And if you’re cleaver about it you can simply add on an additional up-sell to this existing order and increase your average order size.

In most cases, the customer receives the order confirmation email just minutes after they’ve placed an order, so you’re likely to catch them when they’re still in buying mode. You’ve obviously earned enough of their trust since they’ve just bought from you, which increases the chances that they may click on an up-sell in the email and convert again.

Discounts

The tried and true discount always works because people want to feel like they are getting a deal. Whether you’re offering free shipping, regular price – sale price, or a site-wide percentage coupon code, be sure to increase the sense of urgency by assigning offers an expiration date and labeling them as limited-time only.

Test, Test, Test…

Each one of these techniques should be coupled with a solid testing strategy because you never know what will work best. It will take some time to fine tune your offers, messaging and specific combination of tactics to increase your online sales, don’t expect to get it right at the first try. Although you may see an immediate increase in average order size, once you start optimizing for revenue vs. conversion you’ll really be adding rocket fuel to your optimization efforts.

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Please Don’t Test This

The title of this post was not meant to be one of those headlines to grab you and get you to read. Although it might have done just that. The truth is I really don’t want you to test this.

In the screen shots above, the SAP online store is testing the color of the Add To Cart button, blue vs. green. Here’s what the two buttons that were tested look like next tot each other.

I hate this test.

Blue vs. green or any color button vs. another color is the worst kind of test anyone can do. This is a test that leads to stupid decisions based on data that’s not really thought through. Well get to the stupidity of those decisions in a minute but first lets look deeper into the hypothesis of such a test.

What kind of hypothesis can you have about a button color?

Here is the only meaningful one: The green button will win because it is a contrasting color to the other elements on the page, namely the product image that is mostly blue. Therefore visitors will notice the green button more than the blue variation and it will get more clicks.

In fact that is exactly what happened, or my hypothesis of what happened any way since the green button did indeed win out over the blue version.

So back to the ramifications of the stupidity.

So the green button won. What do you do with this new found data? Do you make all of your buttons green from now on? Where does that get you? If the hypothesis is true and the green button won because of the contrast to the other elements on the page then the green button will now work as well on another page with different color scheme and certainly not on a page where the product images is greenish.

Which brings me to another reason why I hate this test. The learnings are not actionable and they can not be applied to other product pages on your site for continued conversion lift.

My hope is that your tests are more meaningful than simply the color of a button. Which brings me to yet another reason why I hate this test. The variable your testing is very weak. Out of all the thinks that could have been tested on this page, time was weed on a small insignificant change. A bigger, bolder change would have generated higher conversion lift, more gains, and deeper learnings that could have helped guide more meaningful decisions and helped the SAP marketing team learn more about how their customers and prospects think. There are no learnings from a test like this.

When it comes to button color here’s everything you need to know.

  • Make buttons a contrasting color to the page. This is easier to do on a landing page than a product detail page where you are forced to follow a template
  • Use white space around the buttons wisely. Not enough white space and your buttons will get lost.
  • Make your buttons large enough to be easily clicked. The larger the target the easier it is to hit.

Finally, if your going to just test buttons and no other element at the same time, please test more than just the color. There are so many options just within a simple button to test.

Here are just a few besides color

  • Shape
  • Size
  • Text
  • Proximity to x (product hero shot, etc)

There is no reason why you can’t combine these changes into different buttons and form a cluster of variables into a single button to test.

Just remember to always follow the golden rule of testing. With every test there should be a learning. Green vs. blue just doesn’t leave much of anything to learn, sorry SAP but I really hate this test.

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Conversion Rate Optimization Report Infographic

Conversion Rate Optimization Report Infographic

Conversion Rate Optimization Report Infographic

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Why I Do Conversion Rate Optimization

What makes us who we are and do the things we do? Grab a cup of Tea and let’s discuss.

That’s a question I think a lot about, being a conversion optimization specialist it’s my job. If I can better understand what makes people tick, by understanding what makes me tick, then I can find better ways to test, better hypotheses and deeper insights into the learnings of each test, which all translates to more value.

What started me down the conversion road was frustration.

Let me explain.

I started out with a bachelors degree in marketing before the Internet really got started. After graduation I thought myself web design, since I always had a strong artistic background, and got a job at a marketing agency as a web designer. From there I moved on to an in-house web design position and at both the agency and the in-house positions my business / marketing side always conflicted with the subjectivity of design.

Clients of the agency as well as in-house marketing departments always had changes but none of them could express the true reasons why they needed or wanted those changes. Most of the changes were subjective, based on opinions or feelings. I don’t like that shade of blue.

I’ve always seen marketing and design as two sides of the same coin. The goal of both disciplines is to get an action, to lead to a desired outcome. It’s an objective goal not a subjective piece of art. This is the root cause of my frustration between design and the subjectivity of a marketing goal.

During my tenure as an in-house designer, the company I was working for was just getting started with web analytics using web trends (this was before the days of Google Analytics) and I saw web analytics as the answer to my frustration of subjective centered decisions. If I could learn how to make sense of the analytics data I could tie that back to design and elevate web design to an objective level and tie reasons behind decisions. This layout is better than that layout, etc.

So I dove into web analytics and read everything I could get my hands on. White papers, books, everything I could find. I eventually stumbled a upon the web analytics association (WAA, now the Digital Analytics Association) as the industry grew and took the only WAA sanctioned web analytics course and won the Jim Novo award for the highest grade point average of the graduating class. My quest for more subjective data led me to other disciplines necessary to move the needle of online goals, the intersection of design and marketing. Those disciplines included studies in copy writing, usability, psychology, persuasion, neuroscience, and behavioral economics. Many of which I continue to read about and learn to this day. As the industry matured I eventually found books on conversion rate optimization and took some formal courses and studies in testing and online conversion optimization.

Finally it all clicked together. The data elevated design to an objective point of view and conversion tied it all together in black and white, right down to revenue. The two disciplines marketing and web design had come together for me.

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Friday’s Conversion Goodness

Here’s this Fridays set of conversion optimization links to keep you thinking over the weekend. Let these links inspire you and give them time to gel over the weekend into something that will be actionable come Monday morning.

Enjoy…

Feature Rich Modern Shopping Carts
Which e-commerce merchants have achieved a”level of excellence” in e-commerce – from the best use of social media and best web design, to the most unique marketing promotion and (of course), the best new feature. It’s those “innovative” features that merit your attention as an e-commerce merchant. FInd out at The Blades Award Event by Miva Merchant.

In-Store Analytics
This is a very interesting company that’s caught my attention this week.  90% of all retail purchases in physical stores and, know nothing about the customers who walk in their doors. Nomi (pronounced Know Me) is a new startup that ties customer cell phones as an anonymous tracking tool to get statistics for brick and mortar retail that’s similar to online metrics like visit duration, frequency, bounce and engagement rates and more.

The next step is to bridge online with offline metrics for a complete 360 view of the customer, then we’ll be cooking with fire. :)

 

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Don’t Miss Out On Increasing Your Online Sales

Got a product or service to sell?

One way to increase your online sales is to design a feeling of missing out into your sales process.

Traditionally this has been used by direct marketers through the principle of scarcity but let’s take a look at it from another angle.

“The competent advertising man must understand psychology. The more he knows about it the better.”
  ~ Claude Hopkins 

Much of selling online comes down to direct marketing and human psychology.

For the direct marketing part we need to look to the masters, David Ogilvy, Claude Hopkins, Gene Schwartz, and many others. For the human psychology part I like to look towards Behavioral Economics and Neuro Science.

I Want My 2 Dollars

In a classic behavioral study, researchers offered subjects a choice between $100 right now or $102 tomorrow. All of the test subjects took the money now. No surprise there. But the interesting part is when the researchers changed the offer to get $100 in a year’s time or $102 in one year and a day.

What do you think happened?

More people were willing to wait the extra day for the extra $2.

It turns out waiting the extra day after waiting a year is not so hard to do but waiting a day to tomorrow is impossible.

Perhaps we think of time that is closer to the present (tomorrow) as something we may lose and a year and a day is too far away to feel like were losing out?

Human nature is both irrational and somewhat predictable at the same time. I believe, that there are a series of base emotions that tie us all together and act as triggers for decision making, fear and loss is one such trigger and perhaps the strongest one of all.

The concept of “fear of loss” is derived from prospect theory, developed by the psychologists Daniel Kahneman and Amos Tversky, which states that people are more motivated by avoiding loosing than gaining value.

The online sales take away is that the feeling of loosing is more motivating than gaining something. That is, the potential of a losing something, even if it is something you do not already have, is more motivating than the potential of a gaining something.

Increase Online Sales

Prospect Theory

Internet marketers are too often in a perpetual state of giving value that sometimes it’s hard to pull back and take away.

The best way to apply this to selling online is to think of loss as an incentive.

Incentives add value to an offer – Buy this and get this free bonus. But in the incentive scenario we’re gaining and if it’s human nature to act right away when a feeling of loss is eminent then perhaps adding incentives add little value?

Bottom line is loss versus gain matters in the sale – A LOT!

According to new psychological research, from just last year, separating incentives into different categories can motivate more people.

Scott Wiltermuth of the University of Southern California and Francesca Gino at Harvard University conducted a study to see if motivation to gain a reward could be affected by the category in which the reward was placed.

Participants were randomly assigned to two groups and asked to complete a simple 10-minute writing task in exchange for a reward.  The possible incentives consisted of a mix of inexpensive items displayed in two large plastic bins from which participants could choose one incentive.  All participants were told that if they voluntarily chose to continue working and completed a second 10-minute task they could chose a second item from the bin.

Unbeknownst to the participants there was one important difference in the information given to the two groups. The first group was told that if they completed the additional writing task, they could take any two incentives from the bins. The second group was also told that if they completed the additional task, they could take a second incentive but that the two they selected would have to come from two different bins.

Despite the fact that all the participants clearly saw that the two bins contained the same mix of items, those in this second group were three times more motivated to complete the additional task than were those in the first group.

So why did the prospect of receiving incentives from two categories motivate more people than a single category?

According to Wiltermuth and Gino, dividing the incentives into categories made people feel that they would be “losing out” on something if they didn’t complete the additional task.

So simply by separating incentives into different categories can, without increasing their economic value, increase their psychological value because of people’s fear to avoid loss.

My hypothesis is that it is the not knowing that is the key driver of motivation here.

I’d love to hear some counter ideas – What do you think?


Sources:
Wiltermuth, S. S., & Gino, F. (2012). “I’ll Have One of Each”: How Separating Rewards Into (Meaningless) Categories Increases Motivation. Journal of Personality and Social Psychology, Vol 104(1), 1-13

http://psycnet.apa.org/journals/psp/104/1/1/

Download the research document here

Prospect Theory: An Analysis of Decision under Risk
by Daniel Kahneman and Amos Tversky
Download the research document here

Daniel Kahneman, won a Nobel Prize in Economics for his work developing Prospect Theory.

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Is Conversion Optimization Behavior Contagious?

Is an idea like a sneeze?

If you can catch happiness or sadness from people around you simply by having their moods effect you, then maybe you can catch an idea?

I don’t see why not. Other people inspire me all the time. A nugget of an idea in a conversation about the most mundane topic can trigger a problem I’ve been trying to solve in my head passively for weeks. Suddenly a new direction is sparked as if it was caught right out of the air, like a sneeze.
So this got me thinking. How do we become more prone to catch these random sneeze ideas that are around us everyday?

Can we set ourselves up or do things differently to be more open to catching them? And if so, how can we turn this around onto our organizations and grow through a culture of idea sneezes, spreading from one individual to another and then outward onto the very culture of our businesses?

This is all leading to the democratization of ideas spreading across horizontally without limits or barriers, at least that’s the goal or sneeze ice come up with at the moment. Particularly in the area of conversion optimization since that’s my passion.

If test ideas were democratized across everyone in the company that could open up even more hypothesis that we as optimization and marketing professionals are not seeing or inspire us to tweak and morph those sneezes into something more, something better perhaps. But surely in new directions we had not considered before the release of ideas.

What this would mean for conversion testing is profound but it does come along with a few challenges and obsticals for us to overcome.

First well need to overcome our own egos and get out of our own way as conversion specialists. If the janitor is coming up with test ideas that could be a blow to our ego and be little what we do, especially if it wins, LOL.

But this is also an opportunity for us as professional conversion specialists to rise up and lead. We become catalysts of democratized ideas, more like a sheep herder, rallying in the good ones, expanding a upon them and letting the bad ones go or testing them as wild cards, because you just never know.

This also means our roles grow and expand beyond the day to day execution and more towards the facilitation of sparking these ideas and educating the organization about testing and our customers. My hope is that this education can and will go in both directions. We will learn more about the motivations of our prospects, or at least what drives the thinking within our organizations which means there may be an opportunity to be leaders again. To stear the thinking at the very core about who the customers really are.

Imagine the possibilities.

Achooooo….

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The Perfect Online Sales Flow

When it comes to increasing your online sales we often focus on just increasing conversion rates of each individual sales page but we often overlook how we can optimize the sales flow itself.

If we think of optimizing for the sale as a whole we need to step back and look at the flow. Where do the customers go after they buy and is there opportunity to increase the average order size  by adding supportive sales to your sales funnel or flow?

In this post I’ve outlined a sales flow that you can use to increase your online sales right away. It’s yours for the taking to do with as you wish. Add onto it, expand it or contract it based on your resources and capability. It’s a very flexible flow.

So here it is:

It’s built as a chain. Linking to different options based on your customers decision. If they buy your main product on the sales page they are taken to an up sell page for an offer. All the up sells in this flow are meant to be additive, that is they add value to the sale or each previous step, with each decision resulting in a soft offer for a free trial.

Free trials may not always be possible for every product but this flow is flexible enough for you to take away what you need and adapt it to your unique situation.

 

 

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3 Questions Every High Converting Page Must Answer

When optimizing for conversion rate many marketers simply don’t know where to start. I can’t blame them, there are so many things to do when marketing online, conversion optimization just becomes one more thing on a long to do list.

But if your site has at least 25,000 unique visitors it’s usually time to start thinking of optimizing for the sale and the place to start is with three questions.

In this post were going to explore three simple, yet not so simple questions every web page must answer to convert more visitors into customers. The important distinction here is – every web page. This framework is not applicable on a global level, but rather a single page. Although you can easily repeat this framework across a series of page within you sales funnel.

These three questions can be used as a framework not only for conversion but for where to start with for increasing your online sales.

Question #1

Where are you?

The moment a visitor arrives on a web page, any web page for that matter, there is a moment of disorientation. Just like walking into a house you’ve never been in, you need to get your bearings. You take in the area around you (I.e. the area above the fold) Looking for a feeling of comfort.

A series of questions goes through your prospects mind all at once:

  • Am I in the right place from where I Just clicked?
  • Is this where I expected to be?

Answering these questions and ultimately the main question – Where am I? – in a half a second is vital to keeping the prospects mind continuing forward. This is an important question to consider and start with when optimizing for sales and conversions, especially when considering an up stream click that comes from an advertisement or some other point, even within the same website and especially if your switching the goal of the page. And in most cases you are, even if you don’t think you are.

Question #2

What can you do here?

The next sequence in the mind of the visitor after they have been reassured they are in the right place is – What can they do here?

Again this may seem obvious to you since you are so close to the product, but your visitors do not have the curse of knowledge that you have been stricken with in this situation. It is important to remove your self in your mind from everything you know and think like the prospect in this situation. There’s and old saying that goes: You can’t read the label from inside the jar. The question what can I do here from the website owner or designers perspective is like being inside the jar. The answer to this question is very obvious to them, too obvious that they don’t think abut it and thus never answer it for the prospect.

In order to reduce the cognitive load that goes on inside your prospects mind you need to address this next question.

Let’s consider for a moment a visitor who clicks from a home page to a category page or from a sales page to an order form or an up sell page.

There are vastly different things you can do on each of these pages, often times there is more than one thing you can do on these pages, in that case you need to clearly design for hirearchy taking into account the alignment of your selling process with your prospects buying process.

Each needs to be clear so as not to confuse the prospect and keep their momentum moving forward without slowing them down.

Question #3

Why should you do it?

This is the big one. Why should your visitor do this above all other options including doing nothing at all? Online the visitor is only one click away from leaving at any point in time throughout your site. It is at is they only have one foot in your site or on your page and they haven’t put both feet in, that is until these three questions have been answered in this sequence.

You have to give them the reason why.

You can not expect them to know, since many time the decision has not yet been made in the prospects mind. Many marketers do not realize there are a series of whys that need answering not simply the reason why they should buy from you, but also the reason they should buy right now, and the reason they should buy this particular product.

Start with a single page on your site, it could be any page and answer these 3 questions. Write them out in order to really think them through, then step back and look at the page from the perspective of a prospect landing on the page.

Once you complete this exercise step away and return to what you wrote in an hour with fresh eyes, then think about what can you do to answer these questions more clearly. Both on the page and in the mind of your prospect. Before you know it you’ll have a few treatments and a soup.e of hypothesis to begin testing.

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Conversion Rate Optimization Link Friday

Conversion Rate Optimization Is Tied With Content Marketing

The top priority of digital marketers in 2013 is tied at 39% for both Content Marketing and Conversion Rate Optimization. Largely due to eCommerce sales in the U.S. expecting to reach $327 billion by 2016 according to Forrester.

Source: MarketingCharts.comEconsultancy

Understanding Your E-Commerce Users

Decisions take place in the mind not on your website, that’s why it’s vital to understand your users if you want to convert more of them into online sales. This wonderful post from Usertesting.com outlines 4 ways for understanding your customers using both qualitative and quantitative data, which is vital to the research stage of your conversion optimization, which by the way is where you should be spending most of your time.

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