Memo #1

eCommerce Merchandising Test That Generated +$448 000 in Profit per Year for One of Our Partners!

Memo1

What do you do when it seems like you hit a wall in scaling your business? When you, your 1K, 5K or maybe 10K per day, but ROAS just dips into an unprofitable territory and not any tactics or a trick seems to do the job?

This week we will invite you to think outside of the box.

You see, eCommerce is not just a channel-specific activity collection. You often must think about it as a whole and know how to link and synchronize separate activities and channels together to get the maximum out of it.

Today we will tell you the most profitable and impactful test we usually run for our clients/partners OUTSIDE of their Facebook Ads manager and it falls more into Conversion Rate Optimization and Merchandising Category.

What we do is split test the product price points using A/B testing software like VWO or Google Optimize at, at least 3 different levels and later on at different ways to “spice up” the offer.

Sounds simple right?

But it can be really impactful and if you haven’t done that, you could be missing +10-25% of potential revenue (numbers we usually see with our clients and about 50% of these tests results in success).

When running the tests what is very important is not to make a novice mistake and not just focus on the conversion rate on these tests. But focus on what matters based on business goals:

- You want to steal maximum market share and maximize the growth speed? – Focus on conversion rate, revenue per visitor & lowest breakeven ROAS combo. So you could scale your ads as high as possible and acquire the most customers.

- Do you want maximum profitability? – Focus on revenue per visitors and profit per sale.

We have run a test like that for one of our partners in the beauty niche just the last week!

After doing market and positioning research and knowing that this product was underpriced comparing to some of the premium competitors, we have decided to split test prices higher than the current one. The first price increased by about +20% and the second one (Variant 1) by about +50% (Variant 2).

It lasted just a few days and netted about +22% increase in revenue!

Taking into the account that this client is currently making around 2-3MM per year, that at very least leads to +$448 000 increase in revenue and PROFIT (calculated from 2MM mark). But taking into consideration that we plan to 4x them in 2020, that can very easily become a +2MM a year worth test!

And you know what is the best part of it? It doesn’t end just here…

The next test our team will run will be optimizing on the best price point presenting it in different ways and offers.

Like:
1. With smaller discount value, but Free Shipping added.
2. Bigger price, but a Free Gift added.
3. Etc.

And the sky is the limit!

Ready to Take Your eCommerce Business to the Next Level?

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