How i am increasing our conversion rate with offers - podcast episode cover

How i am increasing our conversion rate with offers

Sep 28, 202417 minSeason 1Ep. 79
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Episode description

My name is Evan, I own a crafting company called Scorch Marker and I coach people that sell products. I can teach you how to make videos just like me so you can sell more products.

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Transcript

Today, we're going to talk about offers. An easy thing to lose sight of, but at the core of your conversion rate. Last December, we ran a sale Scorchmarker. Deals up to 70 percent off the holiday sale. We put slow moving inventory on a heavy discount. And we started giving free gifts with every purchase. Big banner on the website. Conversion rate was around three percent. Did really great. Three, three and a half. Over the moon. It was fantastic. January 2nd, the holiday sale ends.

We take the discounts off. We remove the deals. We take off the mystery gift and conversion rate plummets. Half a percent. 0. 75 percent. 0. 8 percent. Not good. Conversion rate is one of the many levers that we have to pull to dial our sales up and down. Don't get me wrong. I know it's not easy. But when we look at these levers that we can pull, conversion rate is one of them. Average order value is another. The type of traffic that we're sending is another, the way we build our landing page.

We have the price point of all of our products. All of these things play a factor. I was doing it wrong. That's why this is so important to talk about. I was trying to conversion rate optimize my way out of a low conversion rate. Let me explain the difference really quick, because I didn't quite understand what I was doing wrong.

Conversion rate dropped, like I just mentioned, and so I was going in and trying to reword our offers, change the landing page, add new pictures, change the button color, you know, rearrange things on the page, try a new style, copy a different brand. the offer was the same. One bottle of Maker's Magic for 20. It's not good enough, My partner, Nick, is mentored by a nine figure operator he does over a hundred million dollars a year in sales, 60 million of it last year was done with one offer.

So when we reach out to him and we say, Hey, you ever had conversion rate drop off a cliff and you had all these challenges happen right after a sale ends, or it just happens all of a sudden, yes, of course we changed the offer. And it was in that moment that we were like, Oh my gosh, duh, been trying to use conversion rate optimization and little micro wins to stack up. It wasn't about that.

No amount of conversion rate optimization and button colors and arrangement and copy is going to sell a bottle of maker's magic for 20 to these people when they could just go to Amazon, get it in two days. We needed to change the offer. So what do I mean by offer? That's what I want to talk about today. I see it happening time and time again with all kinds of brands that I work with people that we coach people that are in the accelerator people in operator Academy offer.

I'm not pretending to be the end all be all source of information on this either, but I do want to share with you what I'm learning and how we're solving for it and the fact that I saw a 300 percent conversion rate lift on my website today after changing offers. So, what is an offer? So what's an offer? I think it's pretty self explanatory, yet at the same time, I totally overlooked it. Offers are how you're presenting your item for sale. What do they actually get and how are you wording it?

Here's a good example. Buy one, get a second half off. Buy two, get one free. Instead of selling a three pack, buy two, get one free. Right? Instead of selling one for 20, buy one, get a mystery gift included. That's what I mean by offers. And Alex Ramosi wrote a fantastic book on offers called a hundred million dollar offers. It's a great read. I study it like a textbook. I have it behind me on my shelf. I love it. Building the offer stack.

I don't know why I thought I would be immune from it in e commerce. But I am not. I am not. So how are we going about solving this challenge? Because it's clear to me that it's not a conversion rate optimization issue. I'm not going to be able to tweak my way out of it. I need to take big strides. And offers are what allow you to take the strides, and conversion rate optimization is what allows you to minutely fine tune it.

Okay, so you have the fine tune adjustment, which is CRO, and then you have the big adjustment, which is offers. Another way to look at it would be, um, I don't know if anyone played violin or string instruments, but you have the big tuners on the back. The pegs where you can twist and you can get large chunks of string moved and tightened. But then you have the micro tuners down by the bridge where you can twist them ever so slightly and just get a fine tune adjustment.

That's exactly what I'm talking about here. Offers are the pegs, the large adjustment, CRO is the fine tuning. This is what I'm learning. Working with 7, 8, 9 figure entrepreneurs. Asking them these questions. That's why it's so important to have a network and a group of people around you. My business could have died before I figured this out. But luckily there were other people around me that had gone where I want to go and had the answers that I was looking for. So how are we solving this?

Well, it's clear to us that we need new offers so we've created a list of potentials. One of the first things that I did was I talked to our customers. Yep. I meet with our customers and creators every week. And I asked them, what kind of deal would get you excited? Hey, would you give me your email and a pop up for 15 percent off? Most of them said no. I was like, would you give me your email for 50 percent off your first purchase? And everyone's like, Oh yes, a hundred percent.

That is a deal they want to talk about. We underestimate the power of deals and the virality factor of word of mouth with these. This is what I realized. But let's continue. I also asked them what kind of a discount would make them excited. Where is that threshold? 30 percent and below, they're not really that excited. It's not like, whoa. Oh, it's really interesting. Free plays a big role too.

For example, I asked them, would you give me your email for a free mystery gift included in your order? Everybody was like, yes, a hundred percent. I would punch in my email to get a free mystery gift with my order. And that's the thing. The mystery gift could cost less than the discount. You see what I'm saying? 10 percent off is usually more expensive than a mystery gift. If sourced and purchased the correct way. Crazy. That's a great example of an author reframe, right?

You, instead of giving a 15 percent off, you give them a free mystery gift included. They get more excited. It saves you money and overall customer experience is better. So I'm learning this from our, our customers and our crafters and our ladies and I'm asking them more questions. It's very insightful. Would you be interested in a free plus shipping offer? Right? What if you saw a maker's magic, get this bottle for free.

All you have to do is pay shipping about half of them would be like, Oh yes, I would definitely do that. And the other half are like, it feels kind of like an infomercial. Where else do you get this data? So we talked to the customers, got a lot of insight from them, which helped us narrow down our discounts. Then we made a list. Yep. We have two hero products, two products that really do well. Our Scorch Markers and our Maker's Magic.

Scorch Markers are the markers and the Maker's Magic is our craft glue sealer project finish. So we created offers for each one. We started with a lead magnet and then we went to a trip wire and then we went to a core offer and then we went to a profit maximizer. Not important if those don't make sense. Let me explain. The lead magnet is what they see in the email pop up when they get to our website. How do we increase the value of our traffic and get them to subscribe and give us their email?

I don't know. Free gift with purchase. So, when our website pops up, literally, you see, let me see if I can show you really quick. This is what you see as a lead magnet on our website. Now, want a free mystery gift with your order, enter your details and choose the type of crafting that you're into. This is a lead magnet. This is designed to capture traffic and push people over the finish line of purchasing. A lot of people will do 10 percent off, but I asked my customers, it's not good enough.

A lot of people do 25 percent off, not good enough. Some people do free shipping, not good enough. Free mystery gift, good enough. So I literally did a photo shoot, took a bunch of images, and this is our lead magnet. We set that up using Clavio for the lead magnet capture. And then when it comes to adding the item to the cart, we use a service called Rebuy. Rebuy has some cool order bump functionality. Another one that you could use is one click upsell OCU. It pairs really well with Zipify.

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After a short application process, you're done. There's no monthly fees, no account minimums, no minimum balances, and no hidden fees. So big thanks to Relay for sponsoring this podcast. I'll leave an affiliate link in the description so you can try it out for yourself. All well and good, leading man at Nevin. Now what, what do you do with that email? What if they don't buy? Hmm. So this is where the path kind of splits on the customer journey. Um, if they make a purchase, great.

We'll talk about that in a minute. If they don't make a purchase, they go into our welcome flow and we begin to nurture them with fun, exciting, inspirational emails that hopefully educate them on the product, get them invested in us as a brand and as a company. And we become a regular, valuable source of information for them in the crafting space. Based on what they choose, they get routed into different welcome flows.

And we nurture them in different ways and share different products with them based on their interests. We only have like two main products, so it's not that big of a deal, but this is the flow that we've set up to really make it an exceptional process. Okay, that's lead magnets. You know, what about tripwires though? What does that mean? A tripwire is usually an offer that is anywhere from zero to 7. I'll give you an example.

We want them to put in their payment information and make a purchase from us no matter how big or how small, because we want the chance to upsell them and take them through an ascension path. We're starting with free plus shipping for a Maker's Magic. We have a little two ounce bottle that we filled up specially for them. And you get it for free. All you have to do is pay 6. 95 for shipping. That covers our costs and our shipping of the product and it gives them a chance to try it.

But we don't want them to buy just a small two ounce bottle of Maker's Magic. So after it's been added to cart, we asked them if they want to upgrade their order. Hey, one whole bottle of Maker's Magic for half off. We've got this special deal for customers right now for half off your first purchase. How can you resist a half off a whole bottle of Maker's Magic as opposed to paying 6. 95 for a little two ouncer.

So after they purchase, we have a post purchase upsell says, Hey, we've got this great deal. If you want to upgrade by to get one free, plus we'll throw in a free ornament, a limited edition glitter and a funnel. We are trying to create irresistible offers. Now, we've made a bunch of different variations of this. You know, buy one, get one half off, buy one, get one free, and these are just the ones that we're starting to test.

What we do is we run these tests for a couple of weeks, we send outside traffic using the same Facebook ads, and then we monitor the conversion rate, the take rate, and everything else associated with the KPIs that we're specifically tracking. Nick, my partner, is leading the charge on most of this, but I'm helping build all the creative and stuff. The plan is to test our offers, test, test, test, until we find one that's above 3 percent conversion rate.

Once we find that winning offer, we stand that funnel up and we leave it alone and we try and grow it. But when it starts to decrease in performance, we just stop and we let it lead. We leave it there. And then we go spin up another one. We go try another offer. We try more. This is our strategy right now to increase conversion rate by big swings, as opposed to micro amounts. Let me give you another example with the scorch marker. We're doing free plus shipping as well.

We're also testing, get a free scorch marker, just pay for shipping. Percent off your first order. We're also trying to buy two, get one free. We're also doing buy two, get one free, plus all of these extras. We're doing the same exact thing with different ads and different products. We're testing it to find the best conversion rate. So that covers the lead magnet, and the trip wire, how should these offers be priced? Well, I want to talk about that.

The profit maximizer is our hundred dollar kit, which we would love for everybody to purchase. You see, we set our core offer at the target AOV. We want to target AOV around 50. So that's where the core offer is structured 40 to 50 range. The profit maximizer is around a hundred dollars. It's bumped up significantly so that we can increase AOV. But let's back up a little bit.

Let's talk about each one in order, so we have the lead magnet, which is free, and then we have the tripwire, which is getting them to pull out their credit card and make a purchase from us. And that's usually zero to 7 and we make it a no brainer. If they've done that, then we go into our core offer and we upsell them. And that's anywhere from 20 to 50, which is our target AOV range.

And then after that they go into the profit maximizer, which is up at 100 So there's an ascension ladder of offers to work through We've created three or four offers for each step and each product in this process. So we have like 20 different things We're gonna test and we do that by sending traffic using Facebook ads to different landing pages and then we let the software split test and Feed the results back to us So we'll run an AB test on Zipify and we'll run traffic to it.

And Zipify will tell us which one has performed the best. This is how we are solving for our conversion rate problem. This is how we are trying to fix it. This is how we are trying to become more attractive to our customers. This is also a way for us to liquidate our dead inventory without having to push sales and selling it, a lot of the items that we have in our store, I purchased before I understood how to launch and source products. I'll go over that in more detail another time.

But long story short, I've got a few hundred thousand dollars of inventory. That's just not selling. So instead of trying to fire sale it and get some money back, I'm going to try and wrap it up into our offers to make our products way more interesting and way more valuable to the customer. I'm trying to surprise and delight them and make their day. I don't know if it's the right thing to do, but I feel like it's the best path right now.

And I'll definitely keep you posted on how everything is going. But it's an offer game. We're experimenting using these techniques on Shopify mainly. Our D2C channel. But we're also trying some similar style discounts on Amazon to see what works. I want to end with this. There are no rules. You can do whatever you want when it comes to offers, the value creation and customer journey.

But if you focus on surprising and delighting the customer, I think we went, I'm looking at our conversion rate right now. Yep. It was 0. 6 percent yesterday. We rolled out an offer. Last night. And now we're at 2. 4%. Our conversion rate is up by 377%. Now this is just 12 hours, right? I can't say that this would continue and I just need more data to look at it. But this is the kind of swing that you can get in your conversion rate by altering your offer. You don't always need new products.

You don't always need new customers or better ads. Sometimes you just need a better offer. All right. Let's talk about our sales numbers. Let's start with retail. We had 0 in income over the last 30 days. So that is off the table, 0 in income. Now when it comes to Shopify over the last 30 days, we've done 44, 000 in sales, 44, 000. And that is a 0. 6 percent conversion rate. You see what I'm trying to solve for this?

If that conversion rate doubles, our sales double with the same amount of spend. That's why I'm working so hard on it right now. Figuring this out right now and I'm going to share with you what I'm figuring out so that you can learn with me. Amazon. 124, 000, 124, 000 for the last 30 days. And the conversion rate dropped significantly last month. It was around 13, 14, 15 percent is now at 8%. So the conversion rates gone down on Amazon too. This is to be expected after Q4, this is normal.

However, one of our big rocks this year for the company is to optimize. Our selling channels, that means getting conversion rate up. That's why this is such a focus for me. And I talk about it so much. These are really big levers. We can pull to affect our business. So it's 168, 000 in revenue in the last 30 days. I hope that gives you some insight. I'd like to take a moment to thank you for listening. Your attention means the world to me. It really does.

If you've gotten to a point where you have any questions or you're ready to apply for the Operator Academy, shoot me a DM so I can take care of you. Otherwise, keep doing the boring work and be good to future you.

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