Here’s what I learned this week

Last week I talked about all of us being potentially wrong.

This week there were a lot of people in the LinkedIn Universe that were posting about questioning KPIs.

So what does this mean for the future of ecommerce?

Massive simplification.

I like to start most of my weeks with a hypothesis.

Where is the lowest hanging fruit for a brand to get more product in hand?

Obviously this is when people add things to the cart.

This Week’s Gauntlet

Is 100% sign up rate possible?

Is 100% subscription to conversion possible?

What are the unit economics behind tackling the highest point of intent and split testing variables to create a purchase?

This is something I’ve been thinking about recently when it comes to customer intent and conversion.

In theory there is likely an offer presented at the proper time that would cause most if not all people to convert.

This is the hypothesis at least.

In practice though, this just doesn’t happen.

Our top performing popup happens on desktop devices when people add a certain value to the their cart.

It’s got an 18% opt-in and 84% subscription to conversion rate.

So it’s doing pretty well, the 16% that don’t convert, it all comes down to timing of when they are looking to purchase.

Nearly all of them weren’t looking to purchase today and the drop off is noticeable from 97% conversion for people that answer Today, dropping to less than 50% for all other answers provided.

The truth is a lot of people that have intent, sign up for a discount, but the timing isn’t perfect will not convert and the longer away they are from being in the market usually the less likely they are to convert.

This is my starting point for this week, a clean slate to better understand the market dynamics of converting as many non-subscribed visitors that add products to their carts as possible.

The thing is, this is a great lesson in CRO (Conversion Rate Optimization).

It’s just not possible to convert everyone.

82% of the people that added something to the cart, said no to 20% off on that cart.

That should tell you something about general browsing behavior.

Of those that did opt-in to that offer, doesn’t even convert 100% of the time…

What I’m getting at here is there’s no world where everyone that comes to your website that shows intent converts 100% of the time.

The test for next week is going to be to reroute those that don’t fulfill the timing component of their answers to some other offer to see if those numbers can get up even higher.

Is it worth an extra discount to get an order that wouldn’t normally happen?

If the goal is product in hand, how do we squeak out the additional orders to ensure that everyone that shows interest walks away with product in hand?

So assuming that most of these visitors are new, every action with these visitors directly feeds into the Cost to Acquire a new customer.

Essentially, we’re caught between a rock and a hard place where we want to treat even those that show the most intent differently but we have a sliding scale to ensure a purchase or moving up the timing of a purchase to get to 100% subscription to conversion rate.

Remember the average CAC is often more than the cost of good of the products being sold, but the inflated prices cover that cost.

In fact, the only reason that prices are so high these days for consumer goods is not the materials used but the cost to acquire a new customer.

What would an additional 88% of subscribers look like that add things to their cart? What would an additional 16% of orders look like?

Fixed costs are starting to take a toll

I’m hearing from a lot of brands that things aren’t looking so good right now.

They have been signing up to lots of software services that are promising instant results but it seems like things aren’t quite working the way they would like.

This doesn’t surprise me, there’s a huge gap in knowledge when it comes to understanding the customer journey and we’re seeing the first real classes of agency raised individuals now in charge of brands marketing strategies, the problem is they come from the days where it was all paid media growth driven and that’s not real business nor a viable path forward today.

So in an effort to sure up their balance sheets they are removing fixed fees of software for an easy win, but this is a temporary band-aid on a much bigger situation.

My Tech Stack

Here's my tech stack for ecommerce today:

This is all we use to run our business:

Shopify - Platform
Klaviyo - Email & SMS
Okendo - Reviews
Re:do - Returns
Promi - Discounting
Formtoro - Popups / Data Collection and Analytics
Meta - Ads
Order Limits - MinMaxify - Limits products per order
Shopify Flow - Automation for certain orders
Simple Bundles - Bundle App

Meta to run ads,

Simple bundles to create an intro offer,

Order Limits to restrict that intro offer to one per person,

Shopify Flow to cancel orders second intro orders to prevent abuse,

Formtoro for popups to collect data relevant to your email signups with Analytics to rank your quality of audience and help you build better ads,

(video: youtu.be/LaDEcmTEoKE)

Promi to show coupon codes created via Formtoro or included in URLs from

Facebook Ads on page without having to create multiple bundles to test pricing (huge time saver),

Klaviyo to send campaigns and segment your list based on zero party data from Formtoro,

Re:do to handle your returns and special flows for intro offers to green returns and store credit only, and

Okendo to get all that sweet feedback from people after they purchase your product,

Klaviyo to ask everyone that left a great review to add it as a comment to your top Meta ads.

You can sprinkle in some email flows and campaigns on rotation to drive repeat purchases from those that have already purchased.

That's where all your email revenue is going to come from.

If you do this on repeat you'll drive a lot of first time customers affordably and be able to scale just about any DTC business margins willing.

Simple tech stack, repeatable strategy.

I see a future where rather than gamifying the shopping experience with gimmicks and upsells, we actually just make good products, treat customers with respect, and work our way into putting the customer first.

This is what’s missing from the customer experience these days.

We love the idea of tricking, convincing, and the game of persuading someone to make a purchase instead of just building a great product and focusing on clarity of messaging to people similar to those that not only purchase but purchase multiple times.

The new wave of ecommerce brands are going to fall into a few very specific categories.

1. Lifestyle or sport training aids

Where there are hobbies and sports and the ability to improve, you’ll have a market.

Golf training aids are always a big market because the game is tough and people play from age 5 until death - that’s a long time to sell people stuff.

2. Something that targets an insecurity

Weight loss, health, baldness, etc. people spend a lot of money to look good and will continue to do so.

3. Things that promote learning and healthier habits

I see a lot of room in the kitchen and household gadget market, everyone cooks, there’s going to be room in this space.

Insecurities and self improvement will always be the best format for DTC brands.

Watch for this next wave of stores and ideas.

The Takeaway

Have a great Sunday!

-Jon

Catch up on past posts: https://ecomwithjon.beehiiv.com/

You can learn from me: jonivanco.com