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Episode 6 – 2nd Profit Multiplier – Conversion Rate

 
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Manage episode 185038324 series 1445870
Content provided by Arnold Shields. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Arnold Shields or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://player.fm/legal.

In Amazon, your Conversion Rate is the most important metric that you can measure because:

* Products with a higher conversion rank will rank better. Amazon is going to reward those products that are more likely to result in a sale. Thus a product that is has a 1 in 3 chance of getting a sale for a keyword will rank better than a product that has a 1 in 10 chance of getting the sale and earning Amazon income.
* Products with a higher conversion rate will get more traffic because they rank better for more keywords and Amazon will start to actively promote those products.
* Advertising costs will be cheaper – pay less per click and get more sales per click.

Transcript

Welcome to Episode 6 of the Treehouse metrics podcast

My name is Arnie Shields and I am your host, bringing you the skills and knowledge to work ON your Amazon business rather than IN your Amazon business.

In the 3rd episode, i introduced the 5 multipliers of business and how just small increases in each of those multipliers can deliver you exponential growth

In this episode, I am going to discuss the 2nd multiplier – your Conversion Rate

The Second Profit Multiplier – Conversion Rate

What is your conversion rate – your conversion rate is the percentage of visitors to your product pages that convert to sales.

In Amazon, it is best measured by the Unit Session Percentage in Seller Central Business Reports.

or Number of sales divided by number of Sessions.

In Amazon, your Conversion Rate is the most important metric that you can measure because:

* Products with a higher conversion rank will rank better. Amazon is going to reward those products that are more likely to result in a sale. Thus a product that is has a 1 in 3 chance of getting a sale for a keyword will rank better than a product that has a 1 in 10 chance of getting the sale and earning Amazon income.
* Products with a higher conversion rate will get more traffic because they rank better for more keywords and Amazon will start to actively promote those products.
* Advertising costs will be cheaper – pay less per click and get more sales per click.
The conversion rate is all about your product page because you have no influence of any other aspect of Amazon’s layout, process, checkout process.

So all you can change is the product page – assuming that you have the buy box.

So lets look at the items on the product page that you can change or influence:
1. Title – Product Name – this also affects yours sessions and become a double edged sword in terms of using the title for keywords and using the title for Conversions. It becomes a tricky issue to balance the wording to avoid unintelligent keyword stuffing.
2. Main Image – this is sessions and conversions – the main image is a key player in getting people from the search results to your product page.
3. Secondary Images – Using the secondary images to highlight key benefits. Can we tell the story in pictures?
4. Price – what effect does price have on your conversion rate. Important to test both higher and lower prices. A higher price might have no effect on sales.
5. Offers – The Amazon offers – buy 3 and get 10% off.
6. Bonuses – delivered via email – eBook, how to guides
7. Bullet Points – 5 places to highlight key features and benefits. Time to start reading up on copywriting – offsetting the logical and emotional. People buy on emotional and justify the purchase with logical.
8. Product Description or Enhanced Brand Content – it’s down the page below the fold – below Amazon’s upsell’s and crosssells and below a couple rows of sponsored products ads
Then we have customer created content that we can have an influence over:

1. Questions and Answers
2. Reviews – There are a couple of issues with reviews the overall number of reviews and the latest or most relevant reviews that show on your product page. You might have a bad review that is affecting conversions that can be diluted or pushed off the main product page.
3. Review Rankings – do you have a 4, 4.5 or 5 product ranking.

If you are examining why your sales are increasing or decreasing, it is important to understand whether it is a traffic or a conversion rate issue. It will help you target the root cause.

Conversion Rate of Different Traffic Sources

It is important to understand the conversion rate of your different traffic channels especially if you are paying for that traffic and because Amazon’s analytics are limited, it is difficult to determine the effectiveness of each traffic channel.
Your conversion rate from PPC might be lower or higher than organic sales. Does a poor PPC conversion rank actually reduce your organic ranking for a particular keyword? I am not sure but I have seen product fall in rankings following a big PPC campaign.

Conversion Rate Other Than Amazon

While you are selling on Amazon you have a big advantage because Amazon already optimisied the sales process.

But if you have you own eCommerce site, You need to optimise the conversion rate at every stage of the user process: moving users from landing pages to product pages to checkout to payment.

When looking at your own site, the focus on conversion rate expands in terms of the opportunities, tools and areas that you have to cover.
* Split testing software to change images, text, heading, layout, buy buttons.
* Email campaigns like abandoned cart emails.
* Use of testimonials, videos, short form and long form sales letters

What does your Conversion Rate tell you about your business

Generally a business will have either a conversion rate issue or a leads issue. Understanding your conversion rate will highlight the weaknesses in your business.

If someone says to me: “Everything is going fantastic, we convert every lead we have” – it highlights a couple of problems – Their price is too low and they should be charging more or they have a marketing problem and they are not getting enough leads. They need to develop their marketing to include other channels and sources.

A very low conversion rate can highlight other problems and weaknesses such as:

* They are targeting the wrong market.
* The offer is not compelling – focusing on features not benefits. Finding a compelling offer is the hardest thing to find in any business.
* The sales cycle has failure points – in an online business it could be the shopping cart, add to cart buttons. In an offline business, it could be follow-up process, the point at which you ask for the sale.
* They are measuring leads wrongly – too far up in the sales process – Total Site visits rather than product pages unique visitors.

A very high or very low conversion rate will affect the ability of your business to scale as soon as you start to try to grow the business – it will fail at the point of weakness.

So how do you improve your conversion rate without going one step forward and one backwards.

How do you apply what you learn in one product and apply to all your products

In the 5th episode, I spoke about the Foundations of Business and using those foundations as the basis for improving your multipliers

So how do we use the Foundations to work on the multipliers

The multipliers are TIMES – Time, Innovation, Measurement, Education & Systems

Time
First you need to allocate time on a regular basis – each month to work on conversions. like 2nd or 3rd week of every month.

So diarise it in your calendar, every month you are going to look in depth at your conversions.

Might look 1 product first week in month and then next product the next month

How often that you make changes or go through measurement process will depend on volume. High volume sellers will be able to see changes quicker.

How much time do we need to allocate to make the changes this month

Innovation
Innovation is about change – what did you change last month, what changes are you going to make this month.

Remember that you don’t have to change everything because you will not be able to determine what made the difference.
Measurement

What was your conversion rate last month, what was it this month, did it go up or down? What was the effect of your changes?
Education
What do you need to learn now to improve your conversion rate – copywriting, changes to Amazon, competitor activity and changes

Systems
Systems enable you to scale your business and lock in the wins.
Start by making a system to collect the information that you need to hold your monthly conversion rate meeting.
A system for recording changes that you make.
Create a system or worksheet for your monthly conversion meeting.

The thing to remember with increasing the multipliers is that just small changes to each of the multipliers can make exponential gains to your business.

With conversion rates, a 10% increase in your conversion rate means increasing your conversion rate from 5% to 5.5%.

In Amazon, your conversion rate will determine whether you stay on the 1st page of Amazon or slowly drift back through the search rankings.

In Amazon, your conversion rate is the most important multiplier.

Next week, I am going to discuss the third profit multiplier being Average Sale Price.

Happy Selling

  continue reading

7 episodes

Artwork
iconShare
 

Archived series ("Inactive feed" status)

When? This feed was archived on August 14, 2021 09:08 (2+ y ago). Last successful fetch was on September 29, 2017 13:32 (6+ y ago)

Why? Inactive feed status. Our servers were unable to retrieve a valid podcast feed for a sustained period.

What now? You might be able to find a more up-to-date version using the search function. This series will no longer be checked for updates. If you believe this to be in error, please check if the publisher's feed link below is valid and contact support to request the feed be restored or if you have any other concerns about this.

Manage episode 185038324 series 1445870
Content provided by Arnold Shields. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Arnold Shields or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://player.fm/legal.

In Amazon, your Conversion Rate is the most important metric that you can measure because:

* Products with a higher conversion rank will rank better. Amazon is going to reward those products that are more likely to result in a sale. Thus a product that is has a 1 in 3 chance of getting a sale for a keyword will rank better than a product that has a 1 in 10 chance of getting the sale and earning Amazon income.
* Products with a higher conversion rate will get more traffic because they rank better for more keywords and Amazon will start to actively promote those products.
* Advertising costs will be cheaper – pay less per click and get more sales per click.

Transcript

Welcome to Episode 6 of the Treehouse metrics podcast

My name is Arnie Shields and I am your host, bringing you the skills and knowledge to work ON your Amazon business rather than IN your Amazon business.

In the 3rd episode, i introduced the 5 multipliers of business and how just small increases in each of those multipliers can deliver you exponential growth

In this episode, I am going to discuss the 2nd multiplier – your Conversion Rate

The Second Profit Multiplier – Conversion Rate

What is your conversion rate – your conversion rate is the percentage of visitors to your product pages that convert to sales.

In Amazon, it is best measured by the Unit Session Percentage in Seller Central Business Reports.

or Number of sales divided by number of Sessions.

In Amazon, your Conversion Rate is the most important metric that you can measure because:

* Products with a higher conversion rank will rank better. Amazon is going to reward those products that are more likely to result in a sale. Thus a product that is has a 1 in 3 chance of getting a sale for a keyword will rank better than a product that has a 1 in 10 chance of getting the sale and earning Amazon income.
* Products with a higher conversion rate will get more traffic because they rank better for more keywords and Amazon will start to actively promote those products.
* Advertising costs will be cheaper – pay less per click and get more sales per click.
The conversion rate is all about your product page because you have no influence of any other aspect of Amazon’s layout, process, checkout process.

So all you can change is the product page – assuming that you have the buy box.

So lets look at the items on the product page that you can change or influence:
1. Title – Product Name – this also affects yours sessions and become a double edged sword in terms of using the title for keywords and using the title for Conversions. It becomes a tricky issue to balance the wording to avoid unintelligent keyword stuffing.
2. Main Image – this is sessions and conversions – the main image is a key player in getting people from the search results to your product page.
3. Secondary Images – Using the secondary images to highlight key benefits. Can we tell the story in pictures?
4. Price – what effect does price have on your conversion rate. Important to test both higher and lower prices. A higher price might have no effect on sales.
5. Offers – The Amazon offers – buy 3 and get 10% off.
6. Bonuses – delivered via email – eBook, how to guides
7. Bullet Points – 5 places to highlight key features and benefits. Time to start reading up on copywriting – offsetting the logical and emotional. People buy on emotional and justify the purchase with logical.
8. Product Description or Enhanced Brand Content – it’s down the page below the fold – below Amazon’s upsell’s and crosssells and below a couple rows of sponsored products ads
Then we have customer created content that we can have an influence over:

1. Questions and Answers
2. Reviews – There are a couple of issues with reviews the overall number of reviews and the latest or most relevant reviews that show on your product page. You might have a bad review that is affecting conversions that can be diluted or pushed off the main product page.
3. Review Rankings – do you have a 4, 4.5 or 5 product ranking.

If you are examining why your sales are increasing or decreasing, it is important to understand whether it is a traffic or a conversion rate issue. It will help you target the root cause.

Conversion Rate of Different Traffic Sources

It is important to understand the conversion rate of your different traffic channels especially if you are paying for that traffic and because Amazon’s analytics are limited, it is difficult to determine the effectiveness of each traffic channel.
Your conversion rate from PPC might be lower or higher than organic sales. Does a poor PPC conversion rank actually reduce your organic ranking for a particular keyword? I am not sure but I have seen product fall in rankings following a big PPC campaign.

Conversion Rate Other Than Amazon

While you are selling on Amazon you have a big advantage because Amazon already optimisied the sales process.

But if you have you own eCommerce site, You need to optimise the conversion rate at every stage of the user process: moving users from landing pages to product pages to checkout to payment.

When looking at your own site, the focus on conversion rate expands in terms of the opportunities, tools and areas that you have to cover.
* Split testing software to change images, text, heading, layout, buy buttons.
* Email campaigns like abandoned cart emails.
* Use of testimonials, videos, short form and long form sales letters

What does your Conversion Rate tell you about your business

Generally a business will have either a conversion rate issue or a leads issue. Understanding your conversion rate will highlight the weaknesses in your business.

If someone says to me: “Everything is going fantastic, we convert every lead we have” – it highlights a couple of problems – Their price is too low and they should be charging more or they have a marketing problem and they are not getting enough leads. They need to develop their marketing to include other channels and sources.

A very low conversion rate can highlight other problems and weaknesses such as:

* They are targeting the wrong market.
* The offer is not compelling – focusing on features not benefits. Finding a compelling offer is the hardest thing to find in any business.
* The sales cycle has failure points – in an online business it could be the shopping cart, add to cart buttons. In an offline business, it could be follow-up process, the point at which you ask for the sale.
* They are measuring leads wrongly – too far up in the sales process – Total Site visits rather than product pages unique visitors.

A very high or very low conversion rate will affect the ability of your business to scale as soon as you start to try to grow the business – it will fail at the point of weakness.

So how do you improve your conversion rate without going one step forward and one backwards.

How do you apply what you learn in one product and apply to all your products

In the 5th episode, I spoke about the Foundations of Business and using those foundations as the basis for improving your multipliers

So how do we use the Foundations to work on the multipliers

The multipliers are TIMES – Time, Innovation, Measurement, Education & Systems

Time
First you need to allocate time on a regular basis – each month to work on conversions. like 2nd or 3rd week of every month.

So diarise it in your calendar, every month you are going to look in depth at your conversions.

Might look 1 product first week in month and then next product the next month

How often that you make changes or go through measurement process will depend on volume. High volume sellers will be able to see changes quicker.

How much time do we need to allocate to make the changes this month

Innovation
Innovation is about change – what did you change last month, what changes are you going to make this month.

Remember that you don’t have to change everything because you will not be able to determine what made the difference.
Measurement

What was your conversion rate last month, what was it this month, did it go up or down? What was the effect of your changes?
Education
What do you need to learn now to improve your conversion rate – copywriting, changes to Amazon, competitor activity and changes

Systems
Systems enable you to scale your business and lock in the wins.
Start by making a system to collect the information that you need to hold your monthly conversion rate meeting.
A system for recording changes that you make.
Create a system or worksheet for your monthly conversion meeting.

The thing to remember with increasing the multipliers is that just small changes to each of the multipliers can make exponential gains to your business.

With conversion rates, a 10% increase in your conversion rate means increasing your conversion rate from 5% to 5.5%.

In Amazon, your conversion rate will determine whether you stay on the 1st page of Amazon or slowly drift back through the search rankings.

In Amazon, your conversion rate is the most important multiplier.

Next week, I am going to discuss the third profit multiplier being Average Sale Price.

Happy Selling

  continue reading

7 episodes

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