Monthly ArchivesNovember 2022

You may have heard that dropshipping is the next big thing in ecommerce. But making money selling products without storing, packing, or shipping them sounds fanciful—prompting one to ask: Can you actually make money with a dropshipping store?

The answer is an emphatic yes!

But to make dropshipping profitable, you must find the right products, market your brand, and charge fair prices. The following tips will help you get there.

What is Dropshipping?

Dropshipping is a way of selling products via an ecommerce website without having to order, store, or ship those products to customers. Their dropshipping process involves the customer, the ecommerce owner, and the supplier.

Here are the steps:

1. The customer orders a product from the dropshipping website.
2. The dropshipping owner emails the supplier with the order information.
3. The supplier fulfills the order and ships the product to the customer.

Find the Right Ecommerce Platform

To be successful in dropshipping, start by getting an ecommerce platform that fits your budget and needs. Consider how easy it is to get started, how much the platform costs, what payment methods it accepts, and how it will scale.

WooCommerce and Shopify are two popular options.

WooCommerce

WooCommerce is an ecommerce plugin for WordPress sites. If you currently use a WordPress site, installing the WooCommerce plugin is free and easy. Even if you’re new to building websites, starting a WordPress site is a no-brainer.

But to get your WooCommerce dropshipping store up and running, you’ll need to buy a domain name, SSL certificate, and a WordPress hosting account. Buying them individually can be more expensive than going with a Managed WooCommerce Hosting service, which bundles these necessities at a lower cost. Think of Managed WooCommerce Hosting as wholesale pricing for ecommerce hosting.

To make your dropshipping store profitable, you need to accept a wide variety of payment methods. You can’t profit from customers who can’t pay. WooCommerce supports every major payment gateway today, from Stripe to PayPal.

Your dropshipping store also needs to change and grow as your sales increase. Higher traffic loads can shut your site down. Your website architecture has to be scalable and flexible enough to change with the demand.

WooCommerce is an open source plugin, which means you can change how it looks and functions any way you like. Some WordPress hosting services automatically adjust your site’s traffic and storage capacity as you need it. So, there’s no need to upgrade to new plans and changes as you grow.

Dropshipping Pros and Cons

Dropshipping offers unique benefits to anyone wanting to add ecommerce functionality to their current website or dive into online selling for the first time. Here are a few of the upsides:

• Low startup and operating costs
• Future growth in dropshipping demand is expected
• No inventory storage needed
• You can increase traffic to your site

But the convenience and efficiency of dropshipping isn’t without its downsides. Outsourcing your storage and shipping means giving up control over a critical part of your customer service. Late delivery, lost shipments, and damaged products will hit your customer satisfaction hard, your online reviews will suffer, and your repeat business will plummet.

Another problem dropshippers face is higher product costs. Because dropshippers aren’t retailers, they often can’t take advantage of lower wholesale prices. Customers may discover that it’s just as cheap to order somewhere else. That’s where your marketing magic and customer service must make up the difference.

Other Ecommerce Platforms

Many dropshippers also operate directly on ecommerce platforms like Amazon. The company’s fulfillment program simplifies the storage and shipping for you. The startup is easy, and your products are eligible for Prime free two-day shipping. Dropshippers can buy products, store them with Amazon, and have the company ship your orders.

However, as with any storage, you rack up costs for storing excess inventory that’s not selling. Another downside is that Amazon’s inventory storage is pooled—your products are stored along with other resellers. There is a risk that a similar, but lower quality item could be shipped to your customers.

Some dropshippers skip building a dropshipping website altogether and host their stores on the Amazon Seller program. While you get access to millions of customers, you’re beholden to the ecommerce giant, making it difficult to grow your own niche brand or build a loyal following of customers.

Shopify is another ecommerce platform that makes it easy to start an online store. Plans start at Basic Shopify ($29 per mo) and include the domain name, SSL certificate and web hosting. Shopify stores are easy to spin up, but their basic plans don’t include all the third-party plugins you’ll need to grow your dropshipping site.

Shopify has its own gateway called Shopify Payments and costs 2.9% + 30 cents per transaction. If you want to use other payment gateways, you’ll be charged a flat fee of 2.0% per transaction. For example, if you sold a T-shirt for $20, you’d pay $0.88 to Shopify just to make the transaction through their payment system.

If you need more storage and functionality, you can upgrade from Basic Shopify to Shopify ($79/mo) or Advanced Shopify ($299/mo). Make sure an ecommerce platform like Shopify fits your budget. As your store grows, costs can rise quickly. Because dropshipping margins can be slim, adding just a few cents more to your price significantly eats away at your profit.

Choose a Niche Market

As the old retail saying goes, “The riches are in the niches.” The sales adage uniquely applies to competitive spaces like dropshipping. Every product you can imagine is being sold through dropshipping stores. To be profitable, you need to find a niche market and quality products customers can’t find just any old place.

Start by deciding if you want a long-lasting, more perennial market (e.g. pets, babies, relationships) or a more emerging market (e.g. 3D printing, virtual reality, subscription boxes). Use Google Trends to do some easy market research and test the interest in your niche. You can also use Google Trends to find the search interest in specific product categories (e.g. 3D printers). If interest is rising, the product is a good candidate for your store.

Locate Reputable Suppliers

Once you’ve settled on a market, start searching for products you want to add to your dropshipping store. Even though you’re a seller, keep a consumer’s attitude. You’re shopping for your customers. Not every product is the same quality, and there are plenty of disreputable suppliers trading in counterfeit goods and fake designer products. If you sell brand knockoffs—even if you don’t know they’re fake—companies can force you to pull the products or even close your store.

You can research a company’s reputation yourself by examining its website, customer reviews, certificates, or Better Business Bureau rating. Large online stores marketplaces like AliExpress or Alibaba aggregate and rate thousands of sellers. Both are a good source for those new to dropshipping.

You’ll need a dropshipping agreement with a supplier to sell their products. You can reach out yourself through email or call. Draft an agreement yourself using a dropshipping template. Most companies will have their own vendor agreement, and “dropshipping” is often a checkbox or paragraph within it.

Marketplaces like Alibaba and AliExpress let dropshipping stores add products without needing to contact individual companies or enter into agreements. Dropshippers use services like Woodropship.com or plugins like WooCommerce Dropshipping to quickly add thousands of products from different companies to their stores. The process is fast and simple but also extremely popular, and you’ll face enormous competition with other stores selling the same products. Online marketplaces trade convenience for profit.

Contacting individual suppliers and wholesalers works well for a niche market. Many smaller to medium companies haven’t been approached by dropshipping store owners before and may not be familiar with the process. If you have the time to invest in outreach, creating dropshipping agreements yourself could get you access to untapped markets and products.

Set the Right Price

The price of your products determines the profitability of your dropshipping store, but you need to gather data to plan the right product prices.

Determine Your Profit Margin

Your profit equals what you pay for an item minus the price at which you sell it. First, consider the common margins for the products in your market. For example, electronics are high-volume items with low margins—many are sold with little profit from each. Home furniture is a low- volume product with high margins—fewer sales but higher profits.

For those who want a quick and easy price markup formula, you can use keystone pricing—that’s when you simply double the wholesale price you pay. It’s a common practice but may be too low or too high at times. Doubling the price of a $700 recliner might make the price too high for customers. Doubling the price of a $7 T-shirt, less so.

Other dropshipping owners use the manufacturer suggested retail price (MSRP) or set a fixed dollar amount to add to each item.

These pricing strategies are easy to apply but may not get you the most profit in the long run. There are many other dropshipping markup strategies. Find the one that meets your profit goals.

And Don’t Forget Shipping Costs and Sales Tax

Your suppliers will charge you shipping costs—likely set by your dropshipping agreement. The cost might be a flat rate or vary depending on size, weight, or the shipping destination. If your supplier charges a flat rate, make sure your own shipping costs reflect that or you’ll be cutting into your profits to pay for it.

If shipping costs vary, you’ll either want to contact the supplier to get an estimate before confirming the sale, or figure out a way to estimate the shipping and charge the buyer something close to the actual cost. For example, if your dropshipper is in Los Angeles, and your buyer is in Boston, you’ll want to estimate the shipping cost based upon both addresses, the product weight, and the product dimensions.

Getting accurate variable shipping rates is especially important for large products or international addresses, where shipping can cost hundreds of dollars for some products.

You may also need to collect sales tax depending on where you live. Online sales tax is a complex subject and recent U.S. Supreme Court rulings have made important changes to vendor requirements. WooCommerce plugins like WooCommerce Tax or services like Avalara let you automate sales tax collection and stay compliant with existing laws in your state.

Your profit margin, shipping, and sales tax together form your markup—what you’re going to charge above and beyond the price you paid. If you get these calculations wrong or omit them, you won’t be profitable at dropshipping.

Market Your Brand and Products

Profitability in dropshipping demands you market your products and brand. Paid advertising may not be an option if you’re just starting out. But email and social media marketing are affordable and effective marketing avenues to find the right customers.

Email Campaigns

Customer email lists give you the power to build customer loyalty and drive sales. Set up post-purchase email automation so that customers receive “Thank you for your purchase” emails, discounts, and recommendations after buying products.

Email campaigns help you make a profit because they are affordable and automated. With ecommerce platforms like WooCommerce and services like MailChimp, you can easily set up post-purchase emails that make your customers feel like part of a special group, not just a dollar sign. Other email services like Jilt help you increase profits by automating emails to customers who leave products in their shopping carts.

Social Media

Social media advertising platforms like Facebook Ads get your products in front of consumers who want them. With Facebook remarketing ads, you reach customers at their news feeds—whether they’re browsing your products on Facebook.com or in the app.

The real power of Facebook Ads is that you can define a specific audience to target, based on location, age, or interests. The ad strategy works well with a niche market since locating specific customers is challenging. You can spend as much or as little as you want on Facebook Ads. Start small and grow your customer base over time.

Optimize Your Store

Ever have to wait on a web page to load? It’s frustrating, especially to shoppers. If your dropshipping store’s product pages aren’t loading between 1.8 and 2.7 seconds or faster, your shoppers will bolt before even seeing your products.

If you want to add ecommerce functionality to your blog, think seriously about your hosting. Many WordPress hosts are designed to serve readers who stay on a single page for a few minutes at a time—not the high-traffic volume of ecommerce shoppers, clicking on dozens of products at a time.

Make sure your current host can handle the pressure. If it can’t, get a WordPress host that will optimize your new store, automate updates, expand as you grow, and keep your site running as fast as possible.

Dropshipping is highly competitive, but profitability is possible if you can mix the science with the art of ecommerce. Website dependability and speed are mandatory. Marketing is vital. But perfecting both still won’t guarantee you a profit. You can’t just spin up a website, buy some Facebook ads, and then wait for the money to roll in. All of these components have to work together—that’s the art of ecommerce. Use research to identify niche markets, but use your intuition and human knowledge to locate the right products and create the right marketing messages.

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In this guide, we’ll be taking you through the life cycle of a business from launch to maturity and whatever comes after. We’ll examine the four phases of business growth:

1. Launch
2. Growth
3. Shake-Out
4. Maturity

By the time we reach the mysterious fifth stage, you’ll have a blueprint for success for your business.

The Purpose of the Business Life Cycle

Although all businesses are inherently unique, they often follow a similar trajectory. In fact, if you plot a business’ journey from conception to present on a timeline, you’ll usually see five distinct phases. It’s similar to how people grow and mature; the business life cycle shows businesses maturing from infancy through adolescence to adulthood and eventually, old age.

According to the Startup Genome Report, 90 percent of small businesses fail. To be clear, almost all businesses start as small businesses before processing through the stages of business growth. And when a business does fail, it doesn’t usually happen right away.

Though it varies by industry, about 20 percent of businesses fail within one year of launch. Of the 80 percent that remains, 30 percent fail within the second year. Then 50 percent of the remaining businesses fail by the fifth year, and between years five and ten, 70 percent of the remaining businesses fail.

Why? It often boils down to poor planning, preparation, and decision making.

The business life cycle may have originated as an analytics tool, but it’s increasingly used as a business blueprint. Since it outlines the trajectory of a business, entrepreneurs can use the business life cycle to build stronger, healthier businesses.

The 4 Phases of Business Growth

Of the five business cycle phases, the first four relate to starting, growing, and sustaining a business. Those four stages also make up the majority of the life of a business. Don’t worry, we’ll cover the fifth stage a little later.

The stages of business growth have been labeled and re-labeled many times. However, the most straightforward, accurate model consists of these four stages: launch, growth, shake-up, and maturity.

Phase 1: Launch

Before it grows and matures, a business must be launched. This requires an investment of resources to get the business off the ground. However, revenue is low because the business is new and doesn’t have an established base of customers. This makes launch the least profitable time for a business. It’s often considered the riskiest of all phases, too.

The most important thing to remember about the launch phase is that it shouldn’t be rushed. Putting time and effort into a launch is how you build a strong business.

Additionally, keep sustainability in mind. Hiring is a prime example. Aim for a sustainable balance with your hiring. If you’re overstaffed, the unnecessary payroll eats into your revenue; if you’re understaffed, your business is less productive.

Launch can be further broken into two distinct sub-phases: development and startup.

Development

Development refers to the initial idea and the research that follows. For most failed businesses, the problems can be traced back to insufficient development. No matter how much you may like your idea, you need to know whether it’s actually worth pursuing. In other words, is the idea profitable?

Startup

After verifying the idea is worth pursuing, you can begin preparing for launch. For ecommerce, this means you need a website, which in turn, means finding a web host and hosting plan. Make sure the website can accommodate the amount of traffic you expect to get.

From there, you’ll need to set up WordPress, design the frontend, and set up WooCommerce. Depending on the site, this can require considerable resources, or it could be as easy as installing a theme.

If you’re not using a managed hosting solution, the site will also need to be extensively tested. A major post-launch crash would really hurt the reputation and stability of a brand new business.

Keep in mind that these are all things that need to be ironed out before you even begin to think about marketing, social media, and the actual launch.

Once you’ve done the research, finished your testing, and gotten everything ready, it’s time to launch. In other words, you’re ready to make your ecommerce site available to the public.

Phase 2: Growth

If it’s a newborn at launch, then a business is an adolescent during the growth phase. At this point, the business is establishing an identity. In other words, the business owner is figuring out what works and what doesn’t work for the business.

After minimal returns in the launch phase, the growth phase sees revenue increasing steadily. This allows pricing to remain level (or possibly even decrease) as the business pushes past the break-even point. With the business now profitable, the owner starts looking for opportunities to grow the business. The goal is to further boost revenue and more specifically, profits.

So how do you boost profits during the growth phase? Typically, business owners focus on three important components: marketing, sales, and scaling.

Marketing

Marketing is arguably the most important ingredient for growth. The idea is that with climbing revenue as proof of concept, marketing will increase reach and bring in more business.

Additionally, since overall revenue is higher, business owners can afford continuous marketing. Key advertising platforms like Google Ads and Facebook Ad Manager can bring in even more business, so revenue continues to increase.

Sales

In addition to marketing, sales is another major focus during the growth stage of the business growth cycle. It’s even common for businesses to establish designated sales teams during this stage of growth.

With a growing focus on sales, businesses transition from a passive business strategy to being more proactive.

Scaling

In terms of business, scaling refers to increasing the capability and capacity for growth. Every business owner wants to see his or her business become a success. However, a business needs to be able to support increased capacity without compromising capability.

The purpose of scaling is to increase capacity to meet higher demand. Therefore, scaling is primarily a question of logistics. For instance, you need to consider whether you have space and capital to support expanded inventory. You also need to consider whether your supplier(s) have the production capacity to fulfill larger orders.

Phase 3: Shake-Out

After significant growth, the shake-out period sees revenue increasing at a much slower rate. This typically occurs because of market saturation or an influx of new competitors, or possibly a combination of the two.

Even though sales are still increasing during this period, profit actually begins to decrease. This can be attributed to a combination of two factors:

1. Revenue growth has slowed.
2. Cash flow has either remained the same or increased.

During the shake-out period, sales reach their peak, but they may begin to decline if cash flow doesn’t decrease.

The best way to prevent a sales decline is to minimize expenses. Since revenue growth has slowed, you must compensate by reducing your expenses. This reduction can be achieved by revisiting the business expenses, such as marketing, inventory, and general operating expenses.

Phase 4: Maturity

Like a person nearing retirement, maturity is the stage of business growth where sales and revenue have really slowed down. However, the business is still fairly resilient with consistent revenue. On average, annual revenue growth is about 5 percent per year. Then at a certain point, profits begin thinning, too.

One of the key challenges that business owners face in the maturity stage is the increased competition. By this point, it’s likely that many competitors with similar businesses have emerged. These new competitors benefitted from being able to reinterpret products in novel ways.

Having reached the maturity stage, the business growth cycle comes to a close. At this time, many business owners begin thinking about the next steps or potentially an exit strategy.

The Final Phase: Renewal

The business life cycle is a model for the future so you know what’s in store for your business. In turn, you can make decisions now that minimize the likelihood of undesirable outcomes.

The implication of the business life cycle is that just as there’s a beginning for a business, so too, there is an end. As the business winds down, the owner can start to consider a new direction for his or her life — but businesses don’t actually have to end. Or at the very least, the end can be significantly delayed.

Most iterations of the business life cycle have the fifth stage as decline. In other words, they portray the fifth stage as essentially the beginning of the end for businesses. But in reality, you have a choice.

When your business reaches maturity, you’re faced with an important decision: Do you want to exit the market or revitalize your business?

The decline stage closes the life cycle that started with development and launch. Sales and revenue continue to shrink until profits dry up completely. The business owner returns to much the same place as when the journey began, much like a bell curve returning to zero.

How to Delay the Decline

When the decline has already started, it’s harder — albeit not impossible — to stop. Because any strategy for delaying or mitigating decline almost always requires cash flow, meaning there needs to be consistent revenue.

One of the go-to solutions for staving off decline is to allocate a larger budget to marketing. Specifically, a business owner can try some marketing tools that haven’t already been used like social media or affiliate marketing.

Another option would be to find ways to incentivize purchases. For instance, customer loyalty reward programs encourage repeat business. Customers are more likely to make purchases and make more frequent purchases when loyalty programs are offered. These programs also reward customers who have continued to make purchases throughout the life cycle of your store.

How to Begin Renewal

Instead of letting years of hard work go to waste, the fifth stage can alternatively be a period of renewal for a business. In other words, it’s time to make a triumphant return.

In this phase, business owners step back to reassess their businesses. They look for growth opportunities and ways to realize them. The idea is to breathe new life and relevance into the business which often makes the renewal phase a time for creativity, exploration, experimentation, and innovation.

So how do you renew a business? The obvious way would be to tap into emerging markets and product trends. When trending products are actually related to the current industry, this option is particularly appealing. However, you shouldn’t ignore a promising product solely because it’s unrelated to your current industry. In fact, it’s possible that changing directions could make the new iteration of your business even more successful than it was before.

Once a plan for renewal is in place, the business will likely return to the growth stage of the business growth cycle.

What the Business Life Cycle Can Do for You

Now that you’re familiar with the business growth and life cycles, what can you do with them?

Ultimately, the value of the business life cycle is that it lets you plan for what’s to come. When you’re familiar with the business life cycle, you gain insight into the overall trajectory for your business. In turn, you can make smarter decisions that lead to higher revenue, higher profits, and more longevity for your business.

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Are you ready to become the captain of your own fate? If you take advantage of the business forecasting methods at your disposal, you can get a clearer picture of what’s in store for your business. Better yet, you can prepare for what’s coming down the pipeline.

We’re about to share everything you need to know to calculate your ecommerce growth projections.

What Is Forecasting in Business?

Day-to-day financials tend to be pretty straightforward for business. When the day is done, just count your drawers or tally your sales to know how much your business grossed. If you want to get fancy, deduct your daily expenses and you’ll have your gross profits for the day.

But what about future earnings?

Unfortunately, we don’t have a crystal ball to tell us how much our businesses will earn tomorrow, next week, or next year. However, we do have the next best thing: business forecasting.

Business forecasting lets us predict how a business will perform in the future. Of course, we use “predict” loosely here because it’s not possible to literally predict future financials. Instead, business forecasting is about making educated guesstimations and inferring future outcomes from available data and trends. In this way, you could say that business forecasting is more of an art than a science.

All business owners should be using forecasting for one reason or another. Especially for ecommerce, business forecasting provides a tentative roadmap so you can make smarter, more informed business decisions.

What Business Forecasting is Used For

Although it would be nice to know for sure how a business will perform over time, forecasting is the next-best thing. In fact, business forecasting even has a number of practical, real-world applications.

Identifying Opportunities

A key application for business forecasting is finding new growth opportunities. After all, decisions that affect your revenue should never be made impulsively or arbitrarily. Instead, use forecasting to assess how a new opportunity might affect your revenue.

Assessing Problems and Risk

The most successful business owners make smart decisions and take only smart, calculated risks. Business forecasting is very useful for assessing risks and anticipating problems. For instance, if a sales influx is in your forecast, you can secure sufficient inventory to fulfill those orders.

Setting Goals

It’s easier to set goals when you’re using business forecasting to estimate future revenue. After all, you want to set goals that are realistic and within reach. With forecasting, you’re able to set goals that are both aspirational and attainable.

Human Resources

Much like trying to predict when you may need additional inventory, business forecasting can be used to predict when you might need to do some additional hiring. This is why many brick-and-mortar retailers often do seasonal hiring.

Finding Investors

If your business forecasting suggests a significant uptick in business is imminent, it could be a good time to bring some new investors onboard. Then those investors can help with the capital needed to get your business ready.

Creating Budgets

In business, overextending can be a death sentence, so you should always allocate resources as efficiently as possible. Business forecasting can help make sure money and resources aren’t being misused or wasted.

How to Calculate Ecommerce Growth Projections

There are several methods for identifying ecommerce growth trends and projecting future growth. The method or methods you use will depend on a few different factors; the type of business you run, the industry you’re in, and how much historical data you have available are considerations.

Based on your situation, you can use one or more of the following forecasting methods:

1. Competitor forecasting
2. Quantitative forecasting
3. Judgment forecasting

We recommend using multiple methods so you have multiple data points on which to base your decisions.

Competitor Forecasting

When an ecommerce business is new, or if the business hasn’t actually launched yet, there won’t be any data available to use for forecasting. In this case, you’d turn to competitor forecasting. This involves using competitors’ data to create a projection for a similar type of business. In other words, you use competitor data to get an idea of how your business will perform.

Competitor forecasting can be tricky because it requires some legwork to get the data. However, while you might expect a companies’ invoicing records to be private, getting access to this data is not as impossible a task as you might think. In fact, there are actually places online — like Mergent, axesor, and einforma — where you can acquire this information.

By using invoicing data and market share information, competitor forecasting lets you estimate how much a company will make over time. By extension, you’ll also get an idea of how much you will make (or could make) with a similar business.

Quantitative Forecasting

For businesses with years of data, quantitative forecasting provides the most objective projections. This makes quantitative forecasting the go-to forecasting method for businesses. Because with quantitative forecasting, you’re using historical data with in-depth market analysis to predict the future.

When using your own historical data, the most important data points are your annual growth percentage and seasonality.

Growth percentage is a handy figure that distills lots of data into a single positive or negative value. Basically, it tells you how your revenue has changed from one year to the next. A positive growth percentage indicates revenue growth while a negative growth percentage indicates revenue decline. Meanwhile, seasonality refers to fluctuations in revenue throughout a single year.

Time-Series and Associative Models

Once you have your data points, there are two ways to approach quantitative forecasting: time-series models and associative models.

1. Time-series models involve identifying patterns in historical data and using those patterns as roadmaps for ecommerce growth projections. Because if patterns are consistent in historical data, it’s reasonable to conclude that those patterns will continue in the future.
2. Associative models are about finding relationships in past data. Then you use those relationships to map future trends.

The most common example of associative forecasting is the holiday shopping season. Most retailers can count on business increasing substantially at a certain time of year. Once you identify this pattern, you can reliably predict when this substantial sales increase will occur.

But what if you don’t have historical data for your business? Does that mean you can’t use quantitative forecasting? Absolutely not.

If you don’t have financial reports of your own, there are plenty of data sources to use for forecasting. In fact, you can mine a lot of information that’s valuable for forecasting from other sales channels, including:

• Open rates and sales rates for marketing emails
• The number of sales from Google Ads and Facebook Ads campaigns
• Rate of sales generated by affiliates

When done right, quantitative forecasting can provide reliable predictions for future business and ecommerce growth projections.

Judgment Forecasting

Whereas competitor forecasting and quantitative forecasting are based solely on data, judgment forecasting leverages a business owner’s instincts. In short, it’s about using your experience to project future business growth and sales performance.

For this reason, you shouldn’t use this method without years (or perhaps even decades) of experience. However, the most seasoned business owners may find judgment forecasting far more accurate than forecasting with raw data alone.

Conservative vs. Aggressive Calculations

Most business owners and entrepreneurs fall into one of the two above categories. They’re either conservative realists (the “doom-and-gloomers”) or aggressive dreamers (the “audacious optimists”). Similar to the tortoise and the hare, they anticipate either slow, steady growth or sharp upward trajectory.

There are shortcomings to both perspectives. If you’re a doom-and-gloomer, you may find yourself unprepared if demand becomes higher than anticipated. But if you’re an audacious optimist, you may take a significant loss from unsold inventory.

For business forecasting, you need both sets of calculations. Why? Because the final figures will almost always land somewhere in-between.

The best approach is to create both a conservative and an aggressive forecast. The idea is to determine the worst-case and best-case scenarios for your business. From there, you can prepare for either outcome.

You can create conservative and aggressive forecasts with only slight tweaks to your data. For example, you might disregard future coupons or promotions for a conservative forecast. But if you chose to account for future promotions, your forecast would be quite different. Discounts drive sales and revenue, so you’d see a higher, more aggressive forecast if you factor future promotions.

Considerations for Ecommerce Growth Projections

As we wind down our discussion of business forecasting and projections, we want to leave you with some final considerations.

Knowing how to project future growth is only half the battle. From there, you need to know what to do with that information. After all, what good is forecasting if you don’t know how to influence those projections?

Most of what influences ecommerce growth projections fall into one of two categories: internal factors and external factors. There are also some additional considerations in the form of growth drivers.

Internal Factors

Internal factors relate to the operation and performance of your business. In other words, they’re things that you can control or influence directly.

For ecommerce stores, some important internal factors to look out for include:

• Inventory: Make sure you have enough inventory to meet demand when approaching a peak sales season.
• Promotions: Coupons, discounts, and other promotions affect demand for and revenue from your products.
• Conversion: How many people are visiting your website? How many of those people are converting? If your conversion rate increases (or decreases), your revenue will change in response.
• Traffic Sources: Where does your web traffic originate? What percentage is organic traffic versus social, affiliate, and paid ad sources?

External Factors

If internal factors are things in your control, then external factors are ones out of your control. Typically, external factors tend to represent threats to and opportunities for your business — which also affect future growth.

The external factors to pay attention to include:

• Competitors: How are your competitors attracting customers? What marketing tools are they using to great effect? Which keywords are they targeting for SEO?
• Regulatory Changes: Legislative changes can have a major impact on your business.
• Trends: You can’t change trends, but you can leverage them to boost revenue growth.
• Seasonality: Demand for most types of products will rise and fall depending on the time of year.

Growth Drivers

Growth drivers are essentially ways you can directly affect revenue and business performance. For an ecommerce store, the most important growth drivers are acquisition and retention. In other words, how many customers are you gaining? And how many of those customers come back?

If your ecommerce growth projections show only moderate growth, take a look at your growth drivers. Even small tweaks and simple strategies often lead to much stronger projections. For example, email marketing campaigns and customer loyalty rewards programs can drive a ton of business for your ecommerce store.

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Did you know there’s a tool that connects you with an endless stream of potential customers, free of charge? We’re talking about Twitter; one of the most effective marketing tools you can have in your arsenal.

You can use Twitter for:

• Market research
• Finding new leads
• Engaging with new and prospective customers

As a bonus, you don’t have to invest time in taking stunning photos or writing lengthy content as you do for Facebook and Instagram. Twitter is designed for a short conversation, so establishing a presence is quick and easy.

In this article, we’ll look at some tips for using Twitter for Business to help you get started.

Setting up Your Account Using Twitter for Business

First things first. You need a business account that’s consistent with the tone and image of your brand.

Start by choosing a username for your business Twitter account. This needs to be as close as possible to your company’s name so people will recognize it. There’s always the chance that your username is already taken, so here are some workarounds that won’t affect your branding:

• Add your location at the end of the username (ex: @AmazonUK)
• Include your industry in the username (ex: @ALDO_Shoes)
• Add prefixes or suffixes like “Get,” “Real,” or “HQ” to your username (ex: @GetCredo)

Don’t Forget the Aesthetics

Next is the visuals. We recommend using a company logo for your profile picture, but you can also upload your personal headshot for the photo if you’re the face of the brand.

Take a look at author and speaker Robert Kiyosaki’s profile for example. He’s the guy behind his personal brand, so it makes sense for him to use his picture in his Twitter profile.

Now compare that with this profile from WooCommerce.

The difference between this profile and @theRealKiyosaki is WooCommerce doesn’t have a name/face that people can connect to the brand. As such, it wouldn’t be effective to put a person’s face on the company profile — no matter how instrumental they are in expanding the platform.

An exception may be small but growing businesses – using a picture of your team, your co-founders, or your key support staff may be a great way to humanize your brand.

Regardless of which type of profile picture you choose, you need to create an account strictly for business. Don’t convert an existing personal account into a business profile. Start fresh so you can maintain a consistent tone from day one.

If you need help choosing an attention-grabbing banner, check out Canva.

They have over 50,000 templates that you can choose from, so designing the perfect banner for your brand has never been easier. If you haven’t created a logo yet, Canva can help you do that as well.

Finally, you need to complete your Twitter profile so that it’s optimized. Tell people a little about your brand in the bio, and be sure to include a link to your company’s site in the website field.

Better yet, create a landing page specifically for Twitter users if you really want to boost leads and drive conversions.

Using Twitter for Business as a Research Tool

Got your account set up? Great. Now, let’s look at how to use Twitter for business.

Believe it or not, Twitter is a great market research tool. In this recent report, we can see the following Twitter statistics:

• 326 million people use it every month
• 24% of users are adults in the United States
• Affluent millennials make up 80% of users

Millions of tweets are sent every day — 500 million to be exact. That’s a lot of people sharing what’s on their mind … and much of what they share is valuable market data.

Conversations with brands about customer preferences, complaints, and suggestions all take place on Twitter, and most of it is available for you to access simply by using the search feature to look for keywords or trending hashtags.

There are also a number of competitor research tools out there to help you monitor the industry — and keep a watchful eye on your competition.

If you’re looking for a tool designed specifically for Twitter, check out Followerwonk.

Followerwonk gives you in-depth insights into you and your competitor’s activity on Twitter. You can use it to see what’s trending in your industry, what your rivals are talking about, and who’s interested in your goods and services.

But that’s not all. You can also use Followerwonk to tweak your Twitter marketing campaigns. Its dashboard lets you monitor key metrics like top keywords, follower demographics, and engagement ratings — all of which are useful when creating custom-tailored content on Twitter.

There’s also Twitter Analytics, a native tool which lets you access your brand’s performance and engagement on the platform free of charge. Twitter analytics provide a view of tweet performance and audience reach, as well as a broad look at your follower demographics and info about your organic audience. Twitter Analytics even allows you to compare your followers to Twitter as a whole, as well as compare your audience against different predetermined audiences, including different personas, demographic groups, interest groups, and more.

Integrating Twitter for Business Into Your Marketing Strategy

Now that we’ve covered the basics, let’s look at how to use Twitter for business marketing so you can boost sales and conversions.

Twitter is a great platform for making announcements. Got an upcoming sale? Tweet it. Launching a new product line? Announce it on Twitter.

You can even embed important tweets on your landing pages to increase awareness while gaining more followers. Or, when someone praises your brand, you can use their tweet as a form of social proof.

If you’re running your site on WooCommerce, embedding a live tweet is as simple as pasting its URL in the editor — the platform will take care of the rest.

WordPress (and by default, WooCommerce) users can add sharing buttons for Twitter and other social media platforms by simply activating or installing the Jetpack plugin, as seen in this visual demo from ThemeIsle.

You can also use Jetpack to automatically share a post on Twitter the moment it’s published. That way, followers can stay up to date with your content in real-time.

Building Your Brand With Twitter for Business

Did you know that Twitter ranks second in B2C marketing use, just under Facebook? It’s also the third most popular platform for B2B marketing according to Statista data.

One of the reasons for that is because Twitter is a great place to build relationships through engagement. Unlike other social media platforms, Twitter makes it easy to connect with customers and prospective customers alike.

You can use it to:

• Answer questions related to your product or industry
• Offer customer service and support
• Collect feedback from your supporters

When it comes to Twitter for business, engagement is the name of the game. By keeping an open channel of communication between you and your target market, you’re able to build brand loyalty while expanding your influence.

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Here’s an eye-popping stat: in 2018, an estimated 281 billion emails will be sent. Yep, that’s billion, with a B. There are about three and a half billion people online worldwide, so that means every single one of us receives over 80 emails on average each day.

How can you possibly expect your store to break through all of that noise?

One of the best ways to get your customers’ attention is via lifecycle emails. These emails are automatically based on customer behavior on your website, and they have real customer value. They provide customers with timely and relevant information or assistance, and they allow you to solicit feedback so you can improve your site’s buying experience.

Data shows that customers engage with lifecycle emails more often than other kinds of emails. Compared to other communication channels like social media and search, email drives better conversion rates, and it beats all competitors for ROI. That means lifecycle emails are not only valuable for your customers; they also have a ton of value for your store.

Emails that provide value stand out among those 80 that flow into our inboxes every day — it’s a no-brainer for stores to be sending a complete set of lifecycle emails to their customers. Let’s dig into some of the most essential lifecycle emails that every store should send.

Cart Recovery Emails

Lifecycle emails engage customers throughout their purchasing journey on your store and abandoned cart recovery emails are often your first opportunity to connect with customers through email.

The unavoidable truth for ecommerce stores is that 7 out of 10 shopping carts are abandoned before purchase. That means most of your customers will leave your shop without converting, including the ones who have even put an item in their cart.

But not all is lost — you can recover a lot of that revenue via email. Our internal data at Jilt shows that recovery emails have a 15-20% conversion rate. As a result, cart recovery campaigns come with one of the highest ROI-to-effort ratios for lifecycle emails. It doesn’t take much to get a campaign up and running, and the potential payoff is enormous.

Based on the internal conversion rate we see at Jilt, if your store pulls in $10,000 in sales each month, your recovery campaigns should bring in between $1,000 and $3,000 in additional monthly revenue.

So how do these emails drive so many sales? Abandoned cart recovery emails are useful because they serve multiple functions for customers:

• Reminder: They ley customers who may have been distracted during purchase that their cart is still waiting.
• Support: You can direct your customers toward helpful support resources or policies (overcoming purchase objections) and solicit valuable feedback to uncover issues in your buying funnel.
• Incentive: They can provide customers with a reason to complete their purchase, like free shipping, time-limited offers, or discount codes.
• Value booster: By including upsells, cross-sells, or coupons for related items, cart recovery emails can make checkout more attractive to customers and more valuable for shop owners.

The best recovery emails don’t immediately send customers a coupon or deal. Instead, use your recovery emails to uncover or alleviate any potential checkout issues, and use the data you gather to perfect your sales funnel and reduce your abandonment rate.

There are numerous reasons people abandon shopping carts, from unexpected costs (like high shipping or taxes), complicated checkouts, confusing policies, or real-world distractions. Your abandoned cart recovery campaigns are a critical part of your sales toolkit and can help you uncover issues that, once fixed, will lead to more completed sales from your store and happier customers.

Welcome Emails

It’s easy for brick-and-mortar retailers to provide customers with a personal experience. Building a relationship with a shopper, when you have them face-to-face, is straightforward. Online, where you may not know much about customers or ever actually interact with them in real-time, it can be a lot trickier.

Welcome emails are an excellent way to create a personal experience for users. Whenever customers sign up for your email list, set up an account on your site, or complete their first purchase, send them a welcome email.

Most shop owners don’t treat these emails as a sales opportunity, but that might be a mistake. Welcome emails drive 320% more revenue per email than other promotional emails. They also make your future emails more useful, because people who receive welcome emails are more likely to read future emails from your store.

These emails are often one of the first opportunities you have to introduce customers to sales, discounts, or favorite products. But more importantly, welcome emails are an opportunity to start building a personal relationship with your customers.

The best welcome email series have a few key characteristics:

• Be personal and personalize as much as possible. Start by addressing the recipient by name, if you have it.
• Gather valuable segmentation data. Welcome emails are supposed to be personal, so asking for personal information like your customer’s favorite products, or where they found your site, is both expected and will help you big time later on. You can even start by asking for their birth month so you can share birthday rewards.
• Speaking of future emails, lay out how you plan to contact the customer over time. Are you welcoming them to an email list? Let them know how often you send and what sort of content is included. Setting expectations up front will help with retention and open rates later on.
• Stick to one goal—whether that’s talking about a sale, asking a question, offering a discount, etc., you should have a single goal and a single call to action (CTA) to lead readers to it.

Pick one CTA and stick with it. It may be tempting to tack on a product recommendation to a welcome email that’s designed to gather user information, but you’re likely to have better results by focusing on asking for a single thing in the email.

Feedback Request Emails

Creating a feedback loop with your customers is one of the most important things you can do to ensure your store’s success. Regularly asking for feedback is the only way you’ll understand the needs — and more importantly, frustrations — of your customers. That information is vital to improve your customer experience.

The success of your feedback request emails is tied to your larger lifecycle email strategy. Remember when I said you should use your welcome emails to set expectations? If a customer orders something from your store, and then seven days later you send a feedback request, they’re liable to have forgotten about the order and ignore the request. If you had sent a welcome email that introduced your store and laid our expectations about your relationship, you might be more top of mind, and they might be more inclined to respond.

So what goes into an excellent feedback request email?

• Be personal: Remember, you’re asking your customers for help, so addressing them by name or referencing some key detail of their account or recent order history helps draw customers in.
• Be relevant: Use segmentation and order data to personalize the email further and make it hyper-relevant to the customer whenever possible. Asking for feedback on “your order” is not as compelling as asking for feedback on “the candy apple red wireless earbuds” the customer just ordered. At Jilt, we encourage merchants to use the title of a product in the order within the email subject (which we can dynamically insert).
• Be timely: Time your feedback requests to coincide with when the customer receives their order. Is a customer going to give you feedback on a pair of shoes they haven’t received yet? Nope — try to get feedback around the time the order should get there, and add a delay if the customer needs time to use your product.
• Be succinct: It’s usually best to stick with asking a single question. You can certainly ask customers to complete a more detailed customer survey, but you may not have a great response unless you incentivize participation (e.g., with a coupon code for completion).
• Be clear: As with the welcome emails, have one, clear CTA. Ask for feedback or advertise or deal or recommend new products — don’t try to do everything at once.

Feedback emails are also a great way to solicit social proof, like product reviews or testimonials, which help drive future sales. Research shows that product reviews are one of the most important influencers of purchasing decisions.

As mentioned above, you can use rewards (like coupon codes) to incentivize participation in feedback surveys. But be careful with regards to reviews — most platforms want you to ask for reviews, but many don’t allow you to encourage them with anything that has material value, like a coupon code or free shipping.

Once you have all that feedback, you need to put it to work. Develop a plan to organize, analyze, and put your customer feedback into action to improve your customer experience.

Post-Purchase Emails

After purchase, you’ll probably send an order confirmation or receipt, but you can (and should!) send additional follow up emails. These emails are a fantastic opportunity to gather more valuable segmentation data about your customers and provide useful information for customers that improve their experience with your store.

Post-purchase follow up emails can provide both direct and indirect revenue opportunities for your store, too. You can use them to include valuable product upsells, cross-sells, or recommendations, and you can use the information you gather to improve your store and lead to higher conversion rates and bigger average order values.

Here are some of the post-purchase emails you can send:

• Get feedback: Ask your customers about their checkout experience and use that information to improve your sales funnel and increase conversion rates.
• Reward loyalty: Give your top customers special deals like free shipping or coupon codes on future orders. Or start a loyalty program.
• Cross-sell: Let customers know that you sell other items related to the one they just bought. For example, if a customer just bought new bed sheets, point them toward you selection of pillowcases or duvet covers.
• Announcements: Let your customers know about new products or upcoming seasonal sales.
• Reminders: Tell customers when it’s time to replenish their stock of items that are frequently ordered more than once.
• Re-engage: For lapsed customers, those who haven’t ordered in 45-60 days (this will vary based on your store and what you sell), try to win them back with special deals.

Or you can get more creative: here’s a follow-up email sent by liquor delivery service Drizly that they send to people who purchase a gift order that’s designed to incentivize more giving (or just ordering for yourself):

Just like welcome emails, your post-purchase follow up emails should have one goal. If you try to stack multiple asks in one email, it won’t be nearly as effective as focusing on a single CTA.

Using Lifecycle Emails to Drive Revenue

According to Monetate, email conversion rates are 4.25%. That’s significantly higher than other communication channels (0.59% for social and 2.49% for search), which makes email one of your most essential and useful sales channels.

Sending automated lifecycle emails is a no-brainer for every store, and there are many more you can send than just the four types of emails mentioned above.

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Instagram is fertile ground for ecommerce stores to promote their products directly to their target audiences.

Not only does Instagram have over 500 million daily users, but the platform has also been steadily adding business-friendly features to make advertising and selling easier than ever before.

This post explains how to get started using Instagram for your ecommerce store.

Create a Top-Notch Instagram Business Account

To effectively use Instagram for business, you first need to have an Instagram business account. And to have an Instagram business account, you must have a Facebook page for your business (Facebook owns Instagram).

If you don’t have a Facebook page yet, you can create one in minutes.

Ready? Let’s walk through how to create an Instagram business account.

Download Instagram and Sign Up for a New Account

By default, your new account will be a personal account. To make it a business account, go to Settings > Switch to a Business Profile, and then choose to connect through Facebook. The app will ask you to connect to a business Facebook page. That’s it! Your Instagram business account is ready to go.

Write Your Bio Carefully

Your Instagram profile is where many potential customers will first learn about your ecommerce store, so fill it out wisely.

For your bio, be sure to talk about what products you sell and where people can buy them. Great bios also include some personality, a link to the online store, and a powerful call-to-action. Remember that you only have 150 characters, so be as precise as possible.

Make Your Instagram Shoppable with the Facebook for WooCommerce Plugin

Thankfully, you no longer have to hope that your followers will go from an Instagram post to your profile to the link in your bio to (finally) shopping your store. Instagram now allows users to click on your product within the post itself.

Here’s how you can integrate your WooCommerce store with your Instagram to make shopping easy.

Download Facebook for WooCommerce Instagram Plugin

The Facebook for WooCommerce plugin allows you to merge products from your existing ecommerce store into Facebook (and later into Instagram).

Without this plugin, you would have to upload every product manually to Facebook, including uploading an image, writing a description, and selecting the price. If you have dozens of products in your ecommerce store, that could take a while.

Simply download the Facebook for WooCommerce plugin, and then click “Import Products to Facebook.” All your products will be uploaded in minutes.

Connect Your Facebook Shop to Instagram

To connect your Facebook Shop to your Instagram business account, just click the “Instagram” tab on the left-side menu on your Facebook Shop and log into your Instagram. You may have to wait a few days for Instagram to approve your shoppable account.

Start Tagging Products on Instagram

Tagging a product in an Instagram post is what turns your account into an Instagram shop.

Followers can tap your image in their feeds, and the product name and current price will appear. They can click the tag again and be taken to that product on your website to purchase.

Here’s how tagging products on Instagram works.

Just like you would an ordinary post, click the “+” button to upload a new image (ideally one that features your product). Before clicking “Share,” click your product in the image to tag it with your product name. A catalog of the products from your WooCommerce site will pull up, and you can select the correct product. You can tag up to five products for every image.

Strategize Your Content on Instagram

You should have a strategy when it comes to posting and engaging on Instagram. To start, consider the following questions to guide you.

What Kind of Content Will I Share?

From the format of content — videos, images, graphics, Instagram Stories — to the content itself, you have a lot of decisions to make.

A good way to get a feel for what might be best for you is to look through the feeds of your direct (successful) competitors. Think about what they’re doing that is working for them and could work for you.

How Often Will I Post?

Above all, post as frequently as you can commit to doing consistently. In other words, figure out the max number of posts per day or week that you are certain you can maintain, and then stick to that schedule. Most research says that top brands post between one and three times a day.

Who Can I Engage With?

To maximize your Instagram marketing efforts, you have to do more than just post your own content. You have to also engage with the content from other users.

Instagram’s algorithm will prioritize your content to your followers if you’ve frequently commented on their posts.

Even if someone is not following you, a comment (that doesn’t push your products in a sales-y way) can put you on their radar. Make a list of influencers or micro-influencers in your industry you’d like to connect with, and then commit to commenting regularly on their relevant posts.

Advertise on Instagram to Extend Your Reach

Just like on Facebook, you don’t have to wait for customers to find you. You can target ads to specific demographics, getting your products in front of the right people.

Choose Your Target Audience Through Your Facebook Ads Manager

To get started with advertising on Instagram, head to Facebook Ads Manager and click the “Audiences” tab. There, you can create a new “Saved Audience,” and select for attributes like location, age, gender, interests, income, and more.

Once you’ve targeted your audience, you can create a new ad in the ad manager. To publish it to Instagram, you click “Edit Placements” and choose Instagram.

Decide the Right Ad Format for Your Goals

You’ll see a place in the ads manager to select the format of your ad. Here are the ad format options for Instagram and what they mean:

• Photo or video ad – Appears in viewer’s feeds and look like a regular post, including captions.
• Stories ad – Appears between other user’s stories and lasts for 24 hours (ideal for short promotions).
• Carousel ad – Appears in viewer’s feeds and has slides of different content, either video or images.
• Collection ad – Like a photo or video ad but with an option to purchase the product directly from the ad

No matter what type of ad format you decide, you can expect to pay between 70 cents and 80 cents per click on average. That means that if 500 people click your ad, you’d pay about $375.

Tip: Add an Instagram Shop Now Button to Ads

Calls-to-action are important, and sometimes viewers may have to be prompted to shop. Instagram allows you to add a button to your ads to make it clear that the post is shoppable.

Understand Instagram Analytics to Get Better Results

After you’ve been posting, tagging products in your images, or advertising on Instagram for at least a month, you should check out your Instagram analytics to see how you’re doing. Plus, you can use what you learn to guide your strategy for the upcoming months.

Instagram’s built-in Insights section provides you with all the analytics you’ll need to figure out how to get better results. It has three areas of insights: Activity, Content, and Audience.

The Activity tab in Instagram Insights shows how many people visited your profile, when they visited it, and what they clicked in your bio (like the link to your website). It also shows you how many overall impressions your posts had over the past week and which day of the week saw the highest number of impressions.

Content

The Content tab is separated into “Feed posts” and “Stories.” For each, it displays the most popular posts over a certain time period.

You can filter the results by content type (such as carousels or videos), type of interaction (such as highest likes or most website clicks), or by time period. You can also layer these filters together. For example, you could choose filters that reveal the video posts that drove the most traffic to your website during the last 30 days.

This tab displays insights related to your follower demographics including their gender, age, location, and when they are most often online.

Keep Track of Your Engagement Rate

You’ve probably heard the ‘engagement’ term thrown around a lot, and you may already be tracking your engagement rates for other platforms like Facebook. Your engagement rate is the percentage of your followers who are actively interacting with your posts or stories. Keep track of this number to study your brand’s performance.

You can determine your engagement rate by adding the number of likes plus the number of comments you’ve received and dividing the sum by the total number of followers you have. The more followers you have, the lower your engagement rate is likely to be.

Start Using Instagram for Business Today

The best thing about social media marketing is its accessibility. Unlike traditional forms of advertising, or even advertising with Google, costs are low and setup is simple and intuitive.

The low stakes make using social media platforms like Instagram something you can start using for your business today.

Start Selling Today

Apply these social media marketing tactics to your business today. Don’t have an online store yet? Build your ecommerce business on WordPress with StoreBuilder by Hostdedi. It comes with managed WooCommerce hosting to keep your customer’s data secure and your site at top speed.

Check out our plans to get started today.

Being able to observe and interact with customers as they shop was always an advantage that traditional brick-and-mortar retailers had over online retail. Until now.

With ecommerce analytics and reporting, online retailers can learn just as much from every customer interaction as physical retailers — maybe more. An ecommerce analytics tool can do even more than just show data. These services are essential for tracking the performance of your online store over time.

So we’re going to tell you how (and why) to use Google Analytics ecommerce reporting.

Introduction to Google Analytics for Ecommerce

An ecommerce analytics tool can help compensate for one of the biggest shortcomings of digital retail. Since you can’t be an active participant in a customer’s buying experience, an ecommerce analytics tool gives you a way to learn about customer behavior so you can further optimize customer experience.

Terms You Should Know

Before setting up ecommerce reporting in Google Analytics, let’s go over some of the terms you should know.

Average Order Value (AOV)

Your average order value is the average amount of a transaction. If you divide your total revenue by the total number of orders, you’ll get your average order value. Typically, your average order value is also the value of a conversion.

Average Quantity

Similar to average order value, average quantity is the average number of product units sold per transaction. To calculate, you take the number of product units sold and divide by the number of transactions that included one or more units of that product.

Ecommerce Conversion Rate

The ecommerce conversion rate is the number of web sessions that resulted in a purchase. To calculate, divide the number of transactions by the total number of web sessions, then multiply that figure by 100 to convert the value to a percentage.

Ecommerce Transaction

In short, an ecommerce transaction is a purchase that has been completed by a customer.Per-Session Value (PSV)

Your per-session value is the average value of a web session on your online store. This figure is calculated by dividing your total revenue by your total number of web sessions.

Quantity

As it pertains to ecommerce, quantity refers to the total number of product units sold.

Revenue

Your revenue is the total value earned through sales. It’s an unadjusted value which means tax, shipping, and other financial variables are reflected in the total. Revenue is not the same as profit which subtracts taxes, fees, and expenses.

Transaction ID

A transaction ID is a number — usually alphanumeric — that is assigned to a transaction. These numbers should be unique and non-repeated. Transaction IDs are beneficial to both retailers and customers.

Unique Purchases

Unique purchases refers to the number of times a product was part of a transaction. When multiple units are sold at once, the transaction still only counts as a single unique purchase for that particular product.

How to Set up Google Analytics Ecommerce Tracking

Google Analytics tracks many metrics automatically, but some additional steps are necessary for ecommerce tracking.

Step 1: Install Google Analytics

Before you can track your WooCommerce site with Google Analytics, WordPress must be integrated with Analytics. This step requires you to access the Google Analytics tracking code (or “tag”) and install it on your WordPress site.

You can do it a couple different ways. First, you could use Google Tag Manager to publish and manage the Analytics tag for your site. See our guide to Google Tag Manager for more info on this process.

If you already have an existing Analytics account but need to install the tracking code on your WooCommerce site, you need to set up a property for your ecommerce set. Then navigate to Admin > Tracking Info > Tracking Code to access the actual code you’ll need to install.

If you don’t yet have a Google Analytics account, Analytics walks you through the install steps as part of the account setup process.

Once you have found your tracking code, copy and paste it into the header of your WordPress theme file. Alternatively, a plugin like Yoast can do this for you (many shopping cart plugins for WordPress can as well).

After completing these steps, Google Analytics will be installed on your WordPress site.

Step 2: Enable Ecommerce Tracking

To activate ecommerce tracking in Google Analytics, navigate to Admin > View > Ecommerce Settings. Locate the Enable Ecommerce toggle and move it to the On position. This will allow Google Analytics to begin receiving your shopping cart data.

Step 3: Add Ecommerce Tag to Tracking Code

Navigate to where you added the tracking code to your WordPress site — whether it’s a plugin or in the header file for your theme — and locate the first section of the code. It should look like this:

Navigate to where you added the tracking code to your WordPress site — whether it’s a plugin or in the header file for your theme — and locate the first section of the code. It should look like this:

ga(‘create’ , ‘UA-000000000’ , ‘auto’)

On the line below it, copy and paste the following snippet of code:

ga(‘require’ , ‘ecommerce’ , ‘ecommerce.js’);

The addition of this code snippet will initiate tracking of ecommerce events on your site. For instance, the code will track clicks on products, adds to the shopping cart, shopping cart removals, order checkouts, and so on.

Step 4: Test the Ecommerce Tracking

Finally, test to make sure your ecommerce tracking is working. The best way to test it is to complete a test transaction through your own WooCommerce store. After completing the test order, check Google Analytics to see if that transaction shows in the ecommerce reporting.

On a side note, make sure to account for your test transactions in your ecommerce reporting. Otherwise, your reports will be skewed.

5 of the Most Important Google Analytics Ecommerce Reporting Options

When you’re running your store with WooCommerce, Google Analytics receives lots of data about your customer interactions. The reporting menus in Google Analytics offer a visual representation of the data trends for your store from your customers’ checkout behaviors to how they interact with products. So let’s go over the most important ecommerce reporting options in Google Analytics and the value they have for your ecommerce tracking.

Ecommerce Overview

As the most basic, macro-level reporting option, the Ecommerce Overview in Google Analytics is a summary of your site-wide revenue and transaction statistics. In particular, Ecommerce Overview focuses on things like your conversion rate, the number of transactions over a specific period, revenue, and unique purchases for any given product (or group of products).

When you access the Ecommerce Overview, the default view is a comparison of your revenue to your conversion rate as shown in the screenshot above. However, you can change the metrics you want to compare. You can also change the amount of time for which to map them: days to hours, weeks, or months. By selecting the different ecommerce metrics that are available, you can get a high-level view of your marketing efforts over time.

Below the graph, you can see other relevant values for the period, including the number of transactions generated by your marketing campaigns and the number of sales earned by your affiliate partners.

You also have access to a list of your top products sorted by the revenue generated by the sales of every product. If you click on any product in the list, you can access a graph for that particular product, showing the number of units sold and the amount of revenue those sales generated. There are other useful data points here, too: the average selling price, the number of cart removals for that product, and the total amount of refunds issued for order returns.

Generally, Ecommerce Overview is what you’ll use when you need core data points mapped over a period of time. There’s a lot of high-level information available here that can be quite useful in many situations.

Shopping Behavior Analysis

In Google Analytics, the Shopping Behavior Analysis report offers a breakdown of your purchase funnel. More specifically, this report shows you how many customers reached each point of your funnel, how many times your customers proceed from one point in the funnel to the next, and the number of times the funnel was abandoned at each stage. With this information, you can see the journey your customers are taking as they make purchases, and perhaps most importantly, identify potential bottlenecks in your purchase funnel.

The screenshot above shows the Shopping Behavior Analysis report. There are a number of useful metrics to take note of here.

For this example, this report shows that 2.87% of website sessions involved a product view and of those, over 19% actually added a product to the shopping cart. From there, almost 54% of customers who add a product to the shopping cart begin the checkout process — of which nearly 53% actually conclude with a transaction.

Shopping Behavior Analysis is very useful for increasing your conversion rate. For instance, the cost of shipping is frequently the reason for checkout abandonment. So you might try offering free shipping, and then check the Shopping Behavior Analysis report to see if checkout abandonment has gone down.

Below the main reporting area, you have access to a couple different data view options. By default, user type is selected, but you can choose a number of other parameters. In the screenshot above, you can see that Source is selected as the primary parameter, so it’s showing session and funnel data by referral source.

You can easily create an ecommerce segment by clicking on any of the header cells (e.g. Sessions with Product Views, b). You can even create an abandonment segment by clicking on any of the red arrows in the main reporting graph at the top of the menu. In the screenshot above, Sessions with Transactions was selected.

After creating a segment, you’ll see a report similar to what’s shown in the screenshot above. Since Sessions with Transactions was selected, there was zero percent abandonment at each level in the funnel because all sessions resulted in a transaction.

Shopping Behavior Analysis offers lots of insight into your customer behavior and is an ideal complement to a customer analytics tool like Glew.io. As part of its comprehensive ecommerce dashboard, Glew.io collects tons of actionable data that is compiled into customer profiles. With just a glance, you can quickly see a customer’s purchasing timeline, lifetime value, average order values, and numerous other metrics.

Checkout Behavior Analysis

The Checkout Behavior Analysis report is very similar to the Shopping Behavior Analytics tool with one key difference. While Shopping Behavior looks at the entire session, Checkout Behavior looks solely at the checkout process.

With Checkout Behavior Analysis, you can get a clearer picture of how your customers move through your checkout funnel and when the checkout process is most frequently abandoned. This is particularly useful when you have a multi-step checkout process with tags installed on each funnel step.

When you access Checkout Behavior Analysis in Google Analytics, you should see something similar to what’s shown in the screenshot above. In this example, we’re looking at a single-step checkout process which means the checkout abandonment rate is the difference between all the checkout sessions (100%) and the percentage of checkouts that resulted in transactions (52.85%).

Product Performance

With the Product Performance report in Google Analytics, you get a closer look at how your products are performing on your ecommerce store.

There are two different views in Product Performance: a top-level “Summary” and the more granular “Shopping Behavior” view. The Summary gives you more generalized information including revenue generated by sales of a product as well as the unique sales and quantity sold of a product. Then there’s Shopping Behavior which will indicate product list and product detail views, the number of times a product was added to the shopping cart, and the number of checkout sessions for a product. Generally, you could consider Product Performance to be a more in-depth version of the Ecommerce Overview.

The Product Performance chart lets you compare a number of different dimensions and shopping behaviors. In the example above, you can see a graph of the revenue generated by a product compared to the number of times the product’s details were viewed by customers. Alternatively, you can choose other dimensions like product SKU, product category (if you have Enhanced Ecommerce enabled), or the brand of the product.

Moreover, you can apply a secondary dimension to the report. In the screenshot above, Medium was chosen as the secondary dimension to indicate the origin of the customer who interacted with the product.

Sales Performance

As arguably the most straightforward of the Google Analytics ecommerce reporting options, Sales Performance reporting gives an overview of your revenue through one of two dimensions: transaction or date. If you choose transaction, data for your transactions is shown, including the data, time, and transaction ID. With date, you won’t see details for transactions and instead, will see the total amount of revenue earned per day.

In the screenshot above, you can see a Sales Performance report for which transaction was the primary dimension. For this report, Traffic Type is the secondary dimension to show the origin of every customer who placed an order. Additionally, you’ll see a number of primary metrics and ecommerce KPIs.

If you click on an order number, you can see all products purchased by that same person or on that same day, depending on whether transaction or date is your primary dimension.

Why Use Google Analytics for Ecommerce Reporting?

Historically, ecommerce has left retailers with very little knowledge when it comes to customer behaviors, but ecommerce analytics tools have changed that. When combined with WooCommerce and WordPress, Google Analytics can offer a lot of insight into how your customers are interacting with your online store.

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People love to share their experiences, whether it’s posting on Instagram about how great the coffee is at the new place on the corner, or tweeting about the fantastic customer service is at Wayfair. Today, this is known as referral marketing.

In the age of sharing everything and anything on social media, in blog posts, or over a drink, it’s crucial for brands to do everything they can to create positive customer experiences. The reason: If your customers had a memorable experience — good or bad — you can be sure they’re talking about it.

According to Nielsen, 85% of customers report they either completely or partially trust recommendations and reviews from family, colleagues, and friends regarding products and services. This makes these types of reviews the highest-ranked source for trust and verifiability.

In short, people trust the opinions of products and services from the people they care about most.

Referral marketing is powerful for many reasons, but what sets it apart from other marketing strategies is that it can almost effortlessly lead to more customers and strengthen your existing customer base — that is, if you’ve provided an experience worth raving about.

So how can you use referral marketing to your advantage? We’re breaking down how you can create and implement a referral marketing strategy that converts.

What Is Referral Marketing?

Referral marketing happens all the time. How often do you find yourself asking friends and family for book or movie recommendations? Maybe you love to write reviews on Yelp or TripAdvisor after eating at a new restaurant or staying at a hotel.

Human beings are wired to share their experiences, whether it be with those they are close with or on a public platform. We do this instinctively — sometimes whether we realize it or not.

As a result, referral marketing can have a significant impact on your brand whether you are prepared or not. It gives you the power to:

• Build trust and loyalty among customers
• Reach audiences you may not otherwise have access to
• Save on advertising costs and reduce budget waste

In fact, customers who are referred by other customers have a 37% higher conversion rate and are 4 times more likely to refer additional customers to your product or service. What’s more: according to a study by Olapic, 76% of consumers say they’re more likely to trust information shared by regular people over content shared by brands.

That’s quite the impact.

Because of this, it’s important to encourage customers who had a positive experience with your brand to share that experience with family, friends, and others who may be interested.

This sounds like a no-brainer, right? Here’s the catch: It doesn’t happen nearly as often as it should.

Getting customers to share their experiences — in a way that benefits your brand the most — is often the tricky part. They forget to share, even if they mean to sing your praises.

So how do you get your customers to share their experiences in a way that benefits your brand?

Let’s take a look at a few different ways you can leverage a referral marketing strategy that will help grow customer loyalty and increase your conversion rates.

Make Sharing Easy for Customers

A sure-fire way to encourage customers to share their positive experiences is to make it easy for them to do so. Whether you include a share button at the end of a feedback form or a CTA in an email sequence, make sharing or recommending as simple as possible.

Not only does this help ensure that customers follow through, but encouraging customers to share directly after an interaction means the experience is fresh in their mind, which can make for a better review.

Some brands take brand loyalty to the next level and inspire customers to become advocates or join referral programs. These programs often include a reward component: The more referrals each advocate makes, the more they are rewarded.

Create the Best Customer Experience Possible

Give customers something to share about! To make referral marketing work for you, you must provide your customers with an outstanding experience — one that they will want to share.

However, mistakes happen, and every customer experience isn’t going to be perfect. If you make a mistake, own it and do what you can to fix it. After all, as we mentioned above, word-of-mouth sharing goes for both positive and negative experiences.

Build Sharing into the Customer Experience

Don’t wait for your customers to share. The best way to encourage them to share is to ask them to do so. When a customer wraps up a course, makes a purchase, or reaches a milestone in their interaction with your brand, ask them to share their experience.

This is a scenario where automation works well. Emails triggered by a particular action not only help nudge customers to share their experience but safeguard against forgetting to ask them.

This email from Fabletics was sent to a customer after they made a purchase. They’ve included social icons at the bottom of the email after the survey CTA as well as a “Get $20, Refer a Friend” CTA.

The refer-a-friend CTA directs customers to a landing page where they can find their unique referral URL, a pre-written email that can be sent to friends and family, and social media icons for easy sharing.

Keep a Pulse on Your Data

There are countless ways to slice and dice your data, but make sure you have a clear understanding of which networks are driving the most traffic and referrals.

Whether it’s taking a look at your Google Analytics referral network numbers or monitoring your KPIs through referral marketing software, make sure you have a grasp on the channels responsible for the most referrals. Knowing where your referrals are coming from will help you continue that growth.

Consider Creating a Referral Program

As we mentioned above, building an incentivized referral program that builds brand advocacy and loyalty is an excellent way to leverage word-of-mouth marketing. Referral programs can be as intricate as you want them to be, but keeping things simple for customers is probably the best route to take when getting started.

“We started our referral program in 2015, and it’s done wonders for our brand and sales figures,” says Alan LaFrance, Marketing Strategy Manager at Lawnstarter, an online lawn care booking platform. “It drives roughly 17% of our sales volume, and at a very low acquisition cost.”

Best Price Nutrition, an ecommerce site selling vitamins and supplements, recently launched a referral program. In six months, they’ve seen sales from referrals grow from $1,000 per month to $10,000 per month. “In the beginning, we did it manually, but as it grew it was taking up way too much time,” says Jeff Moriarty, digital marketing manager. “My tip to other business owners is not to try to manage it on your own. You can purchase apps to help you manage, pay and signup referrals at a very reasonable price and it saves you tons of time, which you can focus on other areas of your business.”

A few notable referral marketing tools include ReferralCandy, LoyaltyLion, GrowSurf, and Extole.

Give customers their own referral link or code they can share with others to unlock rewards or points. Incentivized referral programs are optimal because you not only get the benefit of acquiring new customers, but you are also simultaneously encouraging existing customers to spend more money. Win-win.

Examples of Referral Marketing in Action

Next, let’s take a look at a few excellent examples of referral marketing at work.

Tiny Tags

Tiny Tags is a jewelry company that designs customized, high-quality pieces meant to celebrate motherhood.

Being part of the Tiny Tags brand ambassador program means access to insider discounts, the opportunity to receive pieces from every new collection released, and the chance to be featured on Tiny Tag’s social media accounts and email newsletters.

This program works for those who not only love the product but are likely to purchase the product again. Tiny Tags can foster a community of moms who align with their target audience, create an inventory of user-generated content, and continue to build a brand on the foundation of authenticity.

Scratch Pet Food

Similar to Tiny Tags, the referral marketing program at Scratch Pet Food speaks to a specific audience — in this case, animal lovers.

With Scratch Pet Food’s refer-a-friend program, they’ll donate $20 to dog rescues and high-impact charities for every new customer that joins their “pack.” Scratch Pet Food prides themselves on giving to important causes rather than using referral dollars for other business-centric means.

This unique approach to a referral marketing program speaks not only to pet lovers but to those who are motivated by feel-good causes. Customers know their dollars are going to a worthwhile cause rather than to a big corporation, which can be a powerful incentive.

Native Deodorant

Native Deodorant uses a popular, yet effective approach for their referral marketing program. Native will gift customers and their friends a free mini deodorant after both make a purchase.

This way, Native sparks a new round of customers and boosts sales among existing customers. To take things a step further, Native makes it easy for customers to share this deal on Facebook, via email, or with a unique link by embedding sharing tools right within the email.

Referral Marketing: Another Reason To Keep The Customer First

There’s no question about it — referral marketing can be one of the most impactful marketing tools you use to grow your customer base and advocacy. Your customers are going to have an opinion about their experience with your store, product, or service, so why not create the best experience possible?

Just remember: Referral marketing starts with a smart strategy. Create your plan and start measuring results to see what works best for your brand.

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So you’ve decided to harness the power of email marketing to help you make more sales through your WooCommerce store. Smart move!

All things considered, email is an unparalleled digital marketing channel. Email marketing can boost your brand in a big way, and most importantly, it can drive your WooCommerce sales sky-high.

But you can implement a solid email marketing strategy, and leverage many of the right tactics for that strategy, and still fail at email marketing. To succeed, you need to consider and act on one very important fundamental step, choosing the right email marketing software.

Ecommerce Optimization Is Critical

First things first: Is your email platform optimized for ecommerce? Many email software providers integrate seamlessly with WooCommerce — and those providers should be at the top of your list.

Read on for some additional considerations.

List Segmentation Is a Crucial Email Marketing Capability

Subscriber list segmentation is a big consideration. You need the ability to segment your list based on the different stages of the buying cycle.
You will have “tire kickers” who like to shop but may never buy. You will have recent, first-time buyers. You will have seasoned customers and repeat buyers. You’ll have customers who are different ages, genders and live in different locations. Your email marketing approach to each of these segments will be different.

For example, if you sell apparel, you might find your male customers in northern Ohio are more interested in buying knitted caps in the winter than your female customers in southern Florida.

You want a targeted email marketing service that will help you market effectively to every segment of your list. You want to be able to cross-sell and upsell new customers efficiently.

Automation Is Important, Too

When your customers are making a purchase, they are prime candidates for additional sales. You want to send post-purchase thank you emails with messages such as “Customers like you also found these similar items very interesting.” This could lead to a lot of additional sales for you; sales you might otherwise lose.

The best email marketing software providers give you the option to automate emails for common scenarios like these. Other emails that successful ecommerce stores automate include welcome emails, and abandoned cart emails.

Bottom line: Choose an email marketing program specifically designed to help you maximize your ecommerce success by speaking to different types of customers in ways that are meaningful to them.

Scalability for Your Future Growth

If you are just starting your WooCommerce store and your email marketing journey, you may want a very basic “bare bones” free email marketing tool, but it’s quite possible your needs will change over time.

Will you want to get in a situation where you have to switch programs “mid-stream” in your campaign? Would you be better off selecting a program that may be a little more difficult to get started, but is more scalable and will accommodate your needs as your business grows?

Ask yourself these questions as you are making your initial selection of the right email marketing software.

Pricing That Fits Your Budget

Whether you are just getting your email marketing efforts ramped up, or have been at this a long time, you will want to take email marketing software cost into consideration.

Some email marketing tools are free up to a certain list size or number of emails sent. Those with a more robust feature set require a considerable monthly investment. Happily, many email software providers allow you to start small — even for free — and then pay more as you scale up.

Reliability: Get Your Emails Delivered!

This is critical. Especially from the standpoint of inbox message delivery. The world’s most persuasive, compelling email won’t help you if it never gets to your subscribers’ inboxes. The best email providers give you tips on making sure your emails are staying out of spam folders.

Customer Service and Support When You Need It Most

What happens when you have a time-critical situation and you need help from the company that sold you the email marketing software? You don’t just need it, you need it now!

When this happens, you will need your problem solved ASAP. This is not the time you want to get the unwelcome surprise that your email marketing software provider has really poor customer service. Determine the level of service and support before you make your final purchase decision.

Ease of Use: Make Your Life Easier

Whether you are new to email marketing, or you are a seasoned pro, you have no shortage of challenges running your business. Do you really want to be shackled to an email marketing software platform that’s a pain to use? No, of course not.

So look for a program that you find easy to use. It will make your day-to-day life in digital marketing a lot easier!

In light of these criteria, how will you come to the conclusion that a product is the best email marketing platform for your needs? Do your homework!

Seek out independent, third-party reviews, including end-user product reviews. Read the provider’s website, blog, and downloadable content thoroughly. Take full advantage of any free trial you are offered, and ask the customer support team relevant questions.

What’s the Best Email Marketing Software for You?

Now let’s take a look at some individual email marketing platforms and examine the pros and cons.

MailChimp

If you are just getting started with targeted email marketing, and want an easy-to-use program at an affordable price, take a good look at MailChimp.

“We use the premium version of MailChimp to send our emails,” says Stephen Hart, CEO of Cardswitcher, a payment processing comparison website. “I like its relatively simple design and layout, and find that it’s pretty easy to pick up if you need to teach new team members how to use it. It’s also not too expensive which for a startup like us, is really important.”

This program is the most popular on the market, especially with startups and small to medium-sized businesses. It has a free option that accommodates up to 2,000 list subscribers and 12,000 emails per month with no shortage of useful email marketing tools.

Its automation features include welcome emails, abandoned messages, and product recommendations. Automation makes it an ideal choice to integrate with ecommerce programs, including WooCommerce, and here’s some great news: MailChimp’s integration with WooCommerce is free!

Plus, MailChimp’s robust segmentation, A/B testing, reporting, and personalization features make it easier for you to optimize your email marketing results.

Keep in mind that the free option, although it may be right for some customers, offers support (email only) for a 1-month period. There is no tech support option after that.

ConvertKit

ConvertKit targets their email solutions toward creators of content, music, and art. The service offers customers the ability to create custom forms to offer incentives, and tag and segment users. On the back-end, you can view your email marketing funnel as a flow chart with their visual automations tool.

The company has more than 80 integration partnerships, notably with WooCommerce and WordPress. It works with the tools many ecommerce businesses already have.

The company is aware that many potential customers may already be using a different email provider, so they have created guides on how to switch your account over from the main players.

ConvertKit charges based on the number of email subscribers your business has. Their lowest-priced plan, for customers with 1,000 subscribers or fewer, is $29/month — which includes email and live chat support. They offer a free 14-day trial to test out their services.

Drip

A moment ago, we talked about how important it is for you to choose an email marketing platform designed to support your ecommerce efforts. Drip is just such a program. It is specifically engineered with automation features to help you enjoy more success with your WooCommerce store. It offers a host of integration options including Facebook ads, payment systems, etc.

Drip offers you a free, 14-day trial. After that, you can subscribe to three different tiers of service, including the basic plan that allows unlimited emails for up to 2,500 users for $49 per month. You also have a money-back guarantee with every plan.

One potential drawback is some startups and small businesses might find the basic plan price point too expensive.

GetResponse

GetResponse describes itself as “An All-In-One Online Marketing Platform To Grow Your Business”. It offers subscribers the ability to do email marketing, create landing pages, and hold webinars.

It gives users scalable automation features including the ability to build intuitive workflows. You can also use the GetResponse ecommerce tools to track cart abandonments, website visitors, and successful purchases. GetResponse also integrates with WooCommerce.

You have the choice of four different pricing plans, from basic/beginner to enterprise level. The most basic pricing plan offers a list size of 1,000 users for $15 per month. It gives users a free 1-month trial, no credit card needed.

Keep in mind that GetResponse’s most basic plan does not include ecommerce or CRM integration, or most of the platform’s automation features.

Constant Contact

Constant Contact is a successful, well-established company that has been in business for over 20 years. It has a number of features that can help make email marketing much easier for you, including an easy-to-use, drag-and-drop editing tool and over 100 email templates which you can access with the free trial. It also integrates with WooCommerce.

Constant Contact’s solid automation features include welcome emails for new subscribers and the automatic re-sending of emails that did not get opened the first time they were delivered.

No contracts are required and Constant Contact requires no credit card for its 60-day free trial. Once you join, you have a 30-day money-back guarantee, with a discount of up to 15 percent. The most basic program is $20 per month for 0 to 500 subscribers.

One caveat: This plan does not include email automation or subject line A/B testing.

ActiveCampaign

ActiveCampaign offers email marketing must-haves like templates, segmentation, dynamic content, and robust reporting. They have also branched out into other important customer engagement touchpoints.

The service can act as a sales and CRM platform, with tools to automate the sales funnel, including integration with major email services. ActiveCampaign has also developed lead scoring and win probability to help sales teams prioritize more efficiently.

ActiveCampaign also provides SMS messaging and on-site messaging setup.

The full-funnel service helps you be more consistent with your customer messaging, and make sure no one falls through the cracks.

ActiveCampaign offers a 14-day free trial.

Smart Approach, Successful Business

As online marketers, you and I have different needs, situations, and circumstances. Even so, we can all benefit from a solid email marketing strategy backed by the right tactics and tools. Choose the right email marketing software for you as part of a smart approach to digital marketing, and be prepared to see your sales skyrocket!

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Which version of these introductory sentences do you prefer?

(A): “Online store owners must conduct tests of their marketing elements with scientific precision.”

(B): “Online store owners are really just mad alchemists—standing in the lab of their websites, trying to find the magical elixir for converting website visitors into customers.”

Version A is a little dry, but it delivers the point quickly. Version B is more engaging, but it also takes longer to read. Maybe you like your sentences to get to the point, or maybe you like them more poetic. (Remember your answer. You’ll need it later.) Either way, you just participated in a round of A/B testing. We hope you feel smarter.

As both of these sentences suggest, A/B testing is a scientific approach that every marketer and online store owner needs to master to improve their conversion rate optimization (CRO). Why? Because it’s a proven strategy for converting more customers and selling more products and services.

Now that we’ve covered a real-world example of A/B testing, let’s look at an academic definition.

What Is A/B Testing?

A/B testing is the process of identifying the more preferred version of two or more examples of marketing content. During the A/B testing process, marketers run versions of a web page, observe which gets more interaction (e.g., likes, clicks, views), then use that version to optimize conversion rates. A/B testing is also known as split testing, variant testing, or bucket testing.

Although web pages are a common subject of A/B testing, you can split test virtually any marketing element. At the micro-level, a store owner could try varying the color of a “Buy Now” button to see which one got more clicks. At the macro-level, a firm could run two versions of their checkout process to see which one resulted in fewer carts abandoned.

Why A/B Test at All?

A/B testing is not just a thing you do. It’s an attitude towards your business that keeps you dedicated to constant improvement. Plus, split testing is simple to execute, affordable to maintain, and applicable to every part of your business. These qualities make it a low-risk endeavor. A/B testing is the way you can fail fast and break small things. Use it to improve these areas of your business:

• Engagement
• Traffic
• Marketing ROI
• Bounce rates
• Conversion rates
• Sales
• Content quality

The A/B Testing Process

A/B testing is basically an experiment following the scientific method. Here are the seven basic steps of A/B testing.

1. Identify What You Want to Test

Gather what conversion rate optimization (CRO) data you currently have. What specific conversions are you trying to raise? More subscriptions? Higher email opens? Increase your newsletter sign-ups? Now, identify the marketing asset responsible for these conversions—like form field design, email copy, and landing page layout.

2. Decide What “Success” Looks Like

You’re doing testing because you’re dedicated to improving your site. So, you know what underperformance looks like. But what does success look like? You have to decide on that before you continue with testing. Otherwise, you can’t correctly interpret the results. You won’t have any data points to compare. Is it a percentage increase in page opens you’re after? Maybe it’s a rise in revenue over the quarter. It could simply be a true vanity metric, like more positive customer feedback on your website redesign. Whatever “success” looks like, decide now.

3. Find a New Strategy

You may know what your goals are, but do you know how get there? Start by gathering best practices. For example, if you want to split test a landing page, include best practices for a highly converting landing page. Maybe you want to try out a new blog post format. Make some hypotheses about your outcomes that match up with your success goals.

4. Create a “B” Version of the Original

Create a variation of the asset you want to test. Find online tools like a CTA Button Generator or Headline Analyzer to test out new approaches. If you’re using WooCommerce, try an A/B testing plugin to manage your tests. Or use complete A/B testing platforms like Unbounce or Optimizely, which have easy-to-use page builders that don’t require developer resources or site integration. Of course, you can have a version C, D, E,…, which can give you more data points, but that’s more creating, tracking, and analyzing you have to do.

5. Deploy Your New Strategy

Run the test and take measurements. Randomly assign visitors to interact with your control version (A) and experimental (B) version. To keep your test valid, control all variables external to any changes you’re making.

For example, you’ll usually want to test both variations at the same time and for the same duration, unless time is what you’re testing. If possible, target customers using the same browser and devices (e.g., Chrome and Desktop). Different browsers can vary in page load speeds depending on bugs, fixes, and software versions.

6. Analyze the Data

Now that you’ve run your experiment, it’s time to look at the results. But just because landing page A got more newsletter sign-ups than B doesn’t mean you’ve got a winner. The difference in the two may not be statistically significant. You can’t control for every variable, and randomness could be the explanation for different results. Upload your data to a free A/B test calculator to see if your results are actually meaningful and not the result of random chance.

7. Repeat Ad Infinitum

If you want real results out of your CRO strategy, make A/B testing a mainstay of your overall marketing efforts. A/B testing is never finished, only abandoned. It’s a simple idea: The more you optimize, the better your conversion rate will get.

A/B Testing Example

Here’s a real-world example of the A/B testing process at work. The analytics company ComScore wanted to increase leads for their sales team through social proof and customer testimonials. So, the company decided to A/B test around the effectiveness of these campaigns.

ComScore’s Director of Web Marketing, Ferry Gijzel, began by gathering existing company data. Gijzel ordered an audit of demo requests to see how effective the company’s lead forms on their product pages were at generating requests.

The audit revealed lower numbers than were expected—something definitely needed changing. But change how? The answer lay in A/B test results.

Gijzel and team investigated their existing product page design, researched ways to adjust them, and hypothesized probable outcomes.

At the time, ComScore’s pages included a product description, customer testimonial section, and a CTA for a demo request. Gijzel hypothesized that making the customer testimonials more prominent on the page would lead to an increase in demo requests. If more prospective leads saw a recognizable brand singing ComScore’s praises, then demo requests should increase.

The ComScore marketing team created three product page variations—changing the placement of customer logos on the page—and kept their current one as a control. Then they tested the new variations on 2,500 new visitors and tracked the page views of the last step in the funnel—the “Demo Request Confirmation” page.

The A/B test results showed a clear winner—a variation using a vertical layout with a prominently displayed logo on top of the testimonial. The new product page increased leads by 69% compared to the original one.

Google-Safe A/B Testing

When running multiple variations of a landing page, you’re redirecting traffic to multiple URLs. If you’re thinking that A/B testing might affect your SEO ranking, you’re right. Google understands and advocates for split testing. But you have to follow Google’s Webmaster rules for A/B testing if you want to keep from being penalized. If you follow the rules, you’re good to go.

Here’s how:

No Cloaking

Cloaking is the practice of presenting different content or URLs to human visitors versus Google Bots. Basically, Google doesn’t want you dividing your audience up this way because it can’t accurately “read” your pages if you send its bots to different content than your human users see. The mismatch creates inconsistent search results. Cloaking is banned by Google’s Webmaster Guidelines and will get you demoted and possibly removed from the search engine completely.

Use rel=“canonical”

When running an A/B test with multiple URLs, use the rel=“canonical” link attribute on all of your alternate URLs to show that the original URL is the preferred version. Google recommends rel=“canonical” rather than a noindex meta tag because it matches your intentions better.

Avoid 301s, Use 302s

When your A/B test redirects users from your original URL to a variation URL, use a temporary (302) redirect not a permanent (301) redirect. This tells Google you’re only diverting traffic for a short amount of time—that you’re experimenting. The 302 will keep the original URL in Google’s index rather than replacing it with the test page.

Keep Your Tests Short

Google advises site owners to keep testing periods as short as possible. The search engine suggests two weeks as a guideline for most tests.

Once the test is finished, update your content to the preferred versions and remove all of the other variants. If you wait too long, Google will think you’re trying to trick them.

Google gets especially suspicious when you have only one variant that you’re serving to a large percentage of your visitors.

A/B Testing Tools

There are plenty of A/B testing tool options to choose from depending on the size of your site and testing needs. These tools fall into two categories.

A/B Testing Platforms

All-in-one platforms like Optimizely or VWO have plans to meet the needs of small or enterprise- level stores. These paid testing platforms make it easy to manage multiple experiments at once. And most feature a page builder or visual editor for customizing your page variations with your own branding. So, building out your variations won’t require developer resources.

Testing platforms track your incoming A/B testing data, reporting on results and automatically testing for statistical significance. These platforms are easy to use and integrate with your site, but their monthly pricing plans may cost more than you’re willing to spend.

A/B Testing Plugins

Testing plugins are an affordable alternative to all-in-one testing platforms. If you’re using an ecommerce solution like WooCommerce, you have access to WordPress-supported A/B testing plugins like these:

Content Experiments With Google Analytics

If you’re into using Google Analytics, you can use Google’s Content Experiments to track changes to features of your website. The process is a little complicated and requires some experience with Google Analytics. But Content Experiments is free to use, and you can do things like this:

• Compare how web page variations or app screens perform using a random sample of your users
• Define what percentage of your users are included in the experiment
• Choose which objective you’d like to test
• Get updates by email about how your experiment is doing

To use Content Experiments, you’ll need to get a Google account, create a Google Analytics account, and add tracking codes to your web pages. After you set up Content Experiments, you can manage your experiments more easily by setting up A/B testing with WordPress page builders like Beaver Builder.

A/B Testing Keeps It Real

Testing removes the subjective component from your decision making. It eliminates common contaminants within the decision process—like relying on the highest paid person’s opinion. Ideas can actually move from whiteboard sessions to real-world implementation. In short, A/B testing keeps your marketing real.

Store owners who attribute their success to making “gut decisions” won’t be in business long. It’s a romantic notion that is quickly being replaced by experimentation and testing, which brings us back to this question:

Which version of the sentence did you pick? A or B?

(A): “Online store owners must conduct tests of their marketing elements with scientific precision.”

(B): “Online store owners are really just mad alchemists —standing in the lab of their websites, trying to find the magical elixir for converting website visitors into customers.”

On a gut level, version B is the more engaging, less bland introductory sentence, but it may be the worst at converting. Or, it may make no difference at all. The point is, you can’t know unless you test it.

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