You could be a billionaire or a professional working 9-5 or a teacher or a stay-at-home mom, common theme is that we’re all pressed for time and there is always so much to do. So I am always fascinated with the idea of 80/20 (the so called Pareto Principle), or doing more with less. Now, as a full-time internet entrepreneur, it is super crucial for me that I spend time on things that will produce the highest yield on my efforts. One of the questions, that I ask myself each day, is that “how do I grow and scale my existing online businesses”. I always wondered if there is a systematic way or a blueprint that I can follow to grow my revenues in my existing businesses over and over.
In order to answer above question, I sort of took first principle thinking approach. Now, let’s go back to the original question. How do I grow and scale my existing online businesses?
- What do I need to grow a profitable business? I need to sell products or services to more customers.
- How can you sell more products or services?
- Where can you find more customers?
Mathematically thinking, you can boil above down to a very basic formula that we all know in the commerce world.
Revenues = Average Order Value (AOV) * Transactions
whereas Transactions = Visitors/Sessions * Conversion Rate (%)
Revenues = Average Order Value (AOV) * (Sessions * Conversion Rate)
Which means that I can increase AOV or Sessions or Conversion Rate (or all of them) to reach my goal of revenue increase. Let’s break each of these down further, into their most basic elements.
1. Average Order Value (AOV)
The most straightforward way to increase AVO is by increasing your prices (by 10, 20, 30 % etc.). However, price must always be in line with the value provided by the product or service. If you have got a business where you can raise prices without losing customers to competitors, you have got yourself a great business and it is a monopoly.
You can hang values in balance with increased prices by coupling them with more aggressive discounts, as long as it is in line with your brand identity (e.g. if you’re Lululemon, you won’t do that!). Let me list down the other factors that directly impact AVO.
- Cross selling (offer discounts based on the Cart value)
- Bundling (offer discounts based on what’s in the cart together)
- Subscriptions (parent order resulting in recurring renewal child orders over time, it will also improve your conversion rate)
2. Traffic or Sessions (n)
As traffic to your web presence (your website, Amazon product listing what not) increases, it will inevitably result in more sales assuming at least some portion of that traffic consists of your prospective (people who are out shopping in your market) and trust signals (reviews, worth of mouth etc.).
The most straightforward way to increase traffic is to buy Pay-per-Click (PPC) or Ads on Google or Facebook. However, cost with each click would add up pretty quickly and eat into your profit margin in the form of customer acquisition cost. Let me list down the other factors that directly impact traffic without paying for each visit.
- Search Engine Optimization (SEO), technical SEO for on-page optimization (i.e. making your website search engine friendly with a good keyword frequency and placement) as well as link building (aka backlinks) from high authority websites
- Email Campaigns, emails still provide the best conversion rate among all other social mediums given the attention span people have when reading their emails as opposed to social posts etc. Build an email list and communicate with your target audience both strategically (bring more value to them) as well as tactically (discount coupons etc.). I use MailChimp for email campaigns.
- Social Media, go where your audience likes to hangs out, that could be reddit or facebook or instagram. Follow them with organic posts that pique their interests. I use Drumup.io for my social posting.
3. Conversion Rate (%)
So how do increase conversion rate? Haven’t we all read enough about how to do it?
Well, let me share my POV here.
There are many many things, some concrete and some more nebulous that you can do to increase your conversion rate. In my view, these are the most important factors.
- Your website or Amazon product listing Copy, if your copy is weak, you will not convert well. Rewrite until you are able to deeply connect with your audience, it will take some hit and trial and testing approach (A/B). In addition to that, ensure that you have a less painful checkout mechanism (ideally all on one page). If you use Woocommerce, you can use their one-page-checkout plugin. If you are a Kindle or FBA seller, Amazon does it already for you in the form of 1-Click buy button.
- Promotions, offering timely discounts (Thanksgiving or BlackFriday or Cyber Monday) would drive more sales. However, that would also decrease your AOV and cut into profit margin (if you sell digital products, that shouldn’t be a big deal).
- Trust Signals, enough have been written on these but I’d like to add that IMO, having real customer video testimonials, reviews (local and 3rd party) and some mention of high authority assets (e.g. your business is featured in at Forbes or BusinessInsider depending on your niche or bloggers would go a long way)
- Funnel recovery email sequence, you must have an automated way to communicate with your prospects as they transition through various points in your sales funnel. For example, if your funnel starts with a trial signup, then you should have an exit-intent popup that captures emails so you can follow up with them for trial sign up or promotions. Be sure to send reminders to people who sign up but don’t make a purchase after n days. We often hear more about cart abandonment sequence, which is of course most important given that over 2/3rd of the carts are abandoned. Just look at your sales funnel more holistically. I use Woocommerce Follow Ups plugin. For Amazon, you can use JumpSend.
- Add some surprise element. This could be something that your customer couldn’t expect that you’d do, e.g. offer them to have a 1:1 conversation with your if you’re a known figure or a signed copy of your book whatever that may be.
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I run multiple highly profitable six-figure online businesses. Last but not least, I discuss this topic and techniques in detail within my Online Business Mastery Course. You’re definitely missing it out, if you have not checked it out already. For a Limited-time, Module 1 of this course is available free of cost. Signup now to claim your instant access!
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