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A new client recently called asking what are the most important metrics he should be looking at to gauge the success of his online business, how do his numbers compare to other specialty-food merchants, and what are some things he can do to improve his performance.
To help answer his questions, I turned to Megan King, 5th Food Group’s Online Client Marketing Manager, and one of the brightest online marketers I have worked with in my career.
Megan gave the following suggestions:
If you have not done so, set up Google Analytics (GA) on your site. It’s free and provides a wealth of information including average time on site, number of visitors, bounce rate, top entry page, top exit page, orders, sales, and much more.
If you do not have GA set up and/or it’s not accurately reporting data on your site, we will be happy to walk you through the process at no charge and without obligation. Just give me a call!
Focus on the three legs of the stool we call the “sales formula”:
Site Traffic Conversion Rate Average Order Value
Sales = (Site Traffic x Conversion Rate) x Average Order Value
Site traffic—is simply the number of visitors you have coming to your site in a given period of time. All things being equal, the more visitors you have, the higher your sales.
There are several sources of traffic. By default, Google Analytics identifies the following sources:
Direct Traffic—this is when a person enters your URL directly into their web browser or has it bookmarked. Referring Sites—are sites that have a link(s) to your site, thus referring traffic to you. This happens, for example, when a blogger mentions your site as a good source for what it is you sell, or when the media picks up a story on you as a result of your PR efforts, or as a result of your social marketing efforts on Facebook. Organic Search—is when someone clicks on one of your non-paid listings on one of the major search engines. Paid Search—is when someone clicks on one of your paid search ads (aka sponsored links). Other Traffic—is a catchall for anything you have tagged with UTM codes. For example, if you want to track your email campaigns, you can append Google UTM codes to each of the links in your email to find out how these people interact on your site and if they made a purchase.
There are many ways to increase the number of visitors to your site from each of these sources of traffic. In the next issue of the FBMIU, Megan will share several of her top ways to drive more site traffic.
Conversion Rate—is the percentage of visitors who complete one or more of the tracking goals you set up in Google Analytics. Since the main goal for most ecommerce sites is to generate orders, the Conversion Rate we are referring to is simply the percentage of total visitors who place an order. For example, if you have 1,000 visitors to your site and they generated 100 orders, your conversion rate is 10%.
Note: The overall average conversion rate from a sampling of over 20 specialty-food sites last holiday season was 6.99%.
If your conversion rate is below the industry average, try one or more of the following tactics to improve results:
Using your analytics platform, set up conversion funnels to track your customers’ paths through the checkout process to find where they are leaving/abandoning their orders. These are people that have already made a decision to buy your product, but something made them leave. Making minor changes to your shopping cart can bring the greatest increases to your overall conversion rate. Gain their trust. If you are asking for an email address, give them a link to your privacy policy or add a note of assurance that you will never sell their information or send unrequested solicitations. If they are filling out credit card information, make sure your security seal is visible and let them know that your site is PCI compliant. Make sure your shipping information is easy to find. We have done many surveys on the most frustrating features of online shopping. “Not knowing what your total cost will be until you have gone through several checkout stages” is consistently at the top of the list. Your product images can make or break you. If you have limited space on your product detail page, have an option to enlarge the image. Have a clear, close up picture of the product you are selling, not the packaging. If custom packaging (such as a special gift box) is one of the product features, it’s better to have a separate picture to show this off and still have your main focus be the product itself. You want to make them salivate! Test, test, test. Conversion optimization is an ongoing process and every site is different. Should your call to action button say ‘order now’ or ‘buy now’? Should it be red or green? Should the checkout process be 1 page or 3?
Average Order Value (AOV)—is simply sales divided by orders. If you have a steady and strong flow of traffic to your site, and you are converting visitors at or above the industry average, but you are not generating enough sales, the problem is likely due to a low average order size. From our sampling of 20 specialty-food sites last holiday season, the range of AOVs was $62 to $162. The overall average was $96. If we exclude the effect of corporate gifting, the overall AOV was just under $70. (Note: This excludes shipping and handling charges, this value of products sold.)
If your AOV is significantly below this level, you may want to take the following steps to remedy the situation:
Evaluate your product line. Compare the average price of products you are selling to the products you are offering. If the average price of the items sold is significantly less, make changes to the way your site is merchandised. Feature more of the higher-priced items by putting them on the home page and in “best sellers”, “staff favorites”, and “web specials” categories. Devote more space on your site to higher priced items. Add product reviews, testimonials, favorable quotes from the media, and other content on these product pages. Use common cross-sell and up-sell techniques on your site. Create samplers of three or four different flavors of the same product and put it in an attractive box. This works very well for companies that have a lot of different flavors of lower priced items such as seasonings, sauces, salsa, jams/jellies, pastas, breads, cookies, and nuts. For example, you might do a salsa sampler of mild, medium, and hot flavors for $19.95 if each jar sold separately for $7.50. Give customers the opportunity to create their own “custom assortment” at a special price or with discounted shipping. For example, if you have 20 different flavors of jellies, let customers “build their own case” by mixing and matching any combination of flavors into a 6 or 12 pack. This turns a $5 item into a $30 to $50 price point, and it turns a basic item (a jar of jelly) into great gift items. Mix your best selling item(s) with other products to create best selling combination packages. I learned this lesson years ago when I was at Omaha Steaks. Filet Mignon was our bests selling steak. Every time we combined it with another item, that item’s sales took off. Filets with burgers, filets with strip steaks, filets with lobster tails all became and continue to be top seller items. Mix different but related items into gift baskets, gift towers, and gift boxes. When creating these assortments, think about the recipient a buyer is shopping for. For example, several apple-related items would make a nice teacher gift.
One of Zingerman’s best selling products is a bereavement gift box containing several “finger foods” and snacks like peanuts, almonds, brownie bites, and cheese sticks. The price is $125. It’s called In Sympathy, and the only thing that makes this item a bereavement gift is that Zingerman’s calls it one!
There is almost no limit to this type of creative mixing and matching you can do to fill out your product line, increase your average selling price, and turn self purchase items into best selling gifts. (Note too that these special items for specific gifting needs open up a whole new area for your paid search and SEO activities!)
If you have any questions or would like to discuss how to implement these ideas in your specialty-food business, please contact us.
Warmest regards,
Tony Cox
President
5th Food Group
ABOUT 5TH FOOD GROUP
5th Food Group helps specialty-food catalogers and Internet marketers grow and make more money by developing, managing and implementing their mail order and online marketing programs.
We are the only catalog/Internet marketing firm that works exclusively in the specialty-food industry.
Helping smaller companies or large companies with small mail-order or online divisions is what we do best.
Visit us online at www.5thFoodGroup.com to download a copy of our free booklet, The Seven Habits of Highly Ineffective Catalogers, and for information on our two fully guaranteed introductory programs called QuickStart and JumpStart,
back issues of the FBMIU and other information on our services.
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5th Food Group