E-commerce has increasingly become a part of most business’s revenues. While you’ve likely seen obvious examples of this from traditional retailers, companies in other industries are embracing e-commerce tactics, too.
Publishers are selling subscriptions and digital memberships. In the healthcare sector, pharmacies like PillPack and Capsule are offering online prescription fulfillment and delivery services. Direct-to-consumer brands are shipping everything from prescription glasses to mattresses right to our doors. We’re even getting our groceries online, either from traditional retailers like Walmart, who have started offering delivery services, or from online grocers like FreshDirect. B2B companies are in on the e-commerce trend, too, with SaaS companies and business services brands selling online.
With this shift to digital sales, we gain access to all sorts of statistics. We know what percentage of visitors subscribe to our emails or download our apps. We understand how they’re interacting with our content across platforms, and whether they’re clicking our ads and considering offers.
We can also see how frequently they come back to our site to browse. Then we can check whether or not they put items into their cart. We can see if they complete their purchase, or if they abandon their cart, never to return again. But as we grow obsessed with understanding where we lose people along the funnel, we often forget to pay attention to another equally important factor: time.
Moving consumers through the funnel faster leads to dramatic revenue growth. You get cash sooner and can reinvest that cash in campaigns to drive the top of the funnel more rapidly. It’s simple math; if you can get a prospect through the funnel in one month rather than two months, and you continuously invest in filling the top of the funnel, you will double your sales.
It’s time to speed things up. In this article, we’ll explore how data can be our pal in accomplishing such a feat.
Find Your Focus
Before you can start optimizing your e-commerce sales cycle, you need to understand how it works right now. Begin by measuring your current sales cycle time, meaning the average time from first interaction to conversion.
Usually, we just look at funnel stages in aggregate: How many visitors did we have last month, how many email newsletter sign-ups did we get, and how many products or services did we sell? Instead, we need to look at cohorts to figure out how long it takes an individual prospect to go from first-time visitor to paying customer.
The good news is that most analytics suites contain the ability to track this. In Google Analytics, for example, the feature is called the Time Lag Report. This report counts the number of days from the first user interaction (e.g., impression, click, direct session) to conversion. If you’re not looking at this data, now’s the time to start.
Next, identify any bottlenecks in your cycle time. Start by segmenting your time lag analyses by different groups of customers.
Consider things like how long it takes to convert someone who comes from organic search versus social, or from an email campaign versus direct, or from mobile versus desktop. Are there any significant delays in conversion in any of the segments? Once you’ve identified gaps, you can find a segment to focus on. Then, you come up with a plan to test tactics aimed at shortening the e-commerce conversion cycle time.
Test These Three Things
The best way to work towards shortening your conversion cycle time is to theorize as to why there’s a delay in the first place. Think through why certain strategies may or may not be working. Then brainstorm a list of possible solutions and test them.
To give you some food for thought, here are three things proven to accelerate the sales cycle. Consider picking one, depending on what problem you’re trying to solve.
Improve Your Value Proposition
Do your prospects really know what you do? Most websites fail what we call the “five-second rule.” If you want a visitor to take action (i.e., sign up, subscribe, or purchase), you have five seconds to catch their attention with a meaningful, concise value proposition.
You must demonstrate who you are targeting, what problem you solve for them, and why you can do that better than anyone else within that tiny amount of time. Otherwise, you’re likely to lose them. Can you do a better job of explaining who you are and who you want to help across all your marketing materials?
Make a Risk-Free Offer
It’s six to seven times easier to upsell someone than it is to get them to say yes in the first place. That means you should start by asking for a lower commitment. There are a few ways to do this.
Start by offering lower-tier products. Take, for example, Monday.com’s pricing structure. The project management tool allows its customers to select from a variety of pricing options, ranging from basic to pro. While all plans contain essential features, like unlimited viewers, file storage, and apps for iOS and Android, as you move up the chain you get access to more advanced features like form customization and automations. For some customers, the basic plan will be all they need. But for others, they’re using the basic plan to test the waters. Then, if all goes well, they’ll move up to the more advanced (and higher-cost) options.
You can also consider offering a trial period or money-back guarantee. For example, online retailer Casper mattress offers a risk-free 100-night trial. The mattresses cost over $1,000, so they allow customers to sleep on them for 100 days. If they don’t like their mattress, a courier will pick it up, take it away, and they’ll be issued a full refund.
Personalize Your Content
Even if you’re not prepared to implement 1:1 personalization, you can at least segment your prospects into interest categories. Then, you work to deliver content that is most relevant to that segment. In the publishing world, a classic example is a newspaper detecting someone is a sports fan and then serving them sports content above all other types.
Or take, for example, this case of email personalization from the B2B world. The Expert Institute, a legal services platform, created a personalized email campaign that used prospects’ first names and was sent directly from a VP at the company, rather than a general email address. They also segmented their prospect list, sending free whitepapers to the least engaged prospects, while they hit hot leads with a direct sell of their services. The campaign garnered them a 200 percent increase in conversions overall!
You Still Need to Nurture
None of this is to say that you need to beat a prospect over the head with a sales offer the second they arrive on your site. Rushing to the sale will almost always backfire.
By monitoring your time to convert, you can delicately balance lead nurturing with striking when the iron is hot. Finding that sweet spot allows you to ask for the appropriate sale once the prospect has indicated interest through their behavior.
Shortening the e-commerce sales cycle for your business can generate impressive revenue growth. But like any business decision, you can’t charge blindly ahead when altering your marketing funnel.
Instead, take the time to analyze your existing sales cycle and identify the weakest points. From there, gather the team and think about why those lag times exist. Once you’ve found your weak points and crafted some compelling theories for why your sales cycle slows at certain points, systematically take steps to improve the cycle and hasten the time to conversion.
About the Sterling Woods Group, LLC
The Sterling Woods Group’s mission is to help clients make sense of their data to predictably grow sales. We apply data science to help you optimize your sales funnel, improve your marketing ROI, launch new products successfully, and enter new markets profitably.
We use a hypothesis-driven, data-supported methodology to discover insights that no one else is paying attention to. Then, we help you assemble the right sales strategies, marketing plans, technologies, and resources to seize this opportunity.
About the Author
Rob Ristagno, founder and CEO of the Sterling Woods Group, previously served as a senior executive at several digital media and e-commerce businesses, including as COO of America’s Test Kitchen. Starting his career at McKinsey, his focus has always been on embracing digital technology and data science to spur strategic growth.
Rob is the author of A Member is Worth a Thousand Visitors and is a regular keynote speaker at conferences around the world. He has been featured on ABC, NBC, CBS, Fox, and Digiday.
He holds degrees from the Harvard Business School and Dartmouth College and has taught at both Harvard and Boston College.
Rob lives outside Boston, MA with his wife, Kate; daughter, Leni; and black lab, Royce.