The Only 3 Ways to Increase Your Ecommerce Revenue
Here at Metacake, our passion, purpose, and focus is helping businesses create long-lasting, profitable ecommerce channels. A big part of that is increasing revenue in healthy ways, which increases the value of the overall business. While a “growth at all costs” mentality is a fast track to bankruptcy, healthy growth sets you and your business up for a more stable and more profitable future.
There are really only three ways to increase your ecommerce revenue: increase product prices, acquire more customers, and sell more to your current customers. In this article, we’ll take a look at each of these revenue growth levers and how you can start employing them in your business today.
Revenue Growth Lever #1: Increasing Your Product Prices
The first way to increase your ecommerce revenue is to increase your product prices.
We know what you’re thinking: “The customers I worked so hard to get are going to be upset, and visitors will be even harder to convert!”
But that’s not the case. Did you know that what you charge for your products actually has very little to do with the product itself?
The price people will pay is completely relative to the perceived value of the product. We’ll dive into how to leverage value to charge more in other articles, but the way that you charge more for anything is by increasing the perceived value.
So how do you do that? Here are three ways:
*Note: It should go without saying that your product must be great at fulfilling whatever it promises the customer on the product page.
1) Create a real brand.
Creating a brand is not just about a trendy logo or catchy tagline. Take the time to create a real, recognizable brand that connects with customers emotionally, tells a compelling story, builds trust with customers, and establishes authority and expertise in your space.
A brand is a real asset and the only competitive edge you have against your competition. Therefore, it’s the most important thing you can do to increase the value and success of your business.
When you have developed a brand that customers love, you can charge more for what you sell than your competitors do (and the knock-off versions on Amazon).
2) Create more value for your customers
This can be done by offering excellent customer support and de-risking the sale with a trust-building guarantee or warranty. Communicating your authority and expertise in your space also adds value, as does plenty of education and tips about how to get the most out of the product they purchase. All of these elements are best communicated through content on your website and your email marketing.
3) Outline a value stack
To really make a profit-generating impact when raising your prices, outline the value stack for customers so they have access to a visual representation of what they’re buying into. This is not simply listing the dollar signs, but creatively showing the customer the value of the product compared to the result they’ll get from buying it. Value is only helpful if it’s seen, so you must help the customer visualize it!
Pro-Tip
Before increasing your prices, let your loyal customers or VIPs know by running an “unsale”. This is essentially running a sale before increasing your prices, or just telling your customers prices are going up, so this is their last chance to get your products “at a discount” (the current price). It’s a nice way to thank your customers for being here and supporting your business!
Revenue Growth Lever #2: Acquire More Customers (Without Increasing Ad Spend)
The second way to increase revenue is getting more customers. Customer acquisition should always be a big focus for ecommerce stores, but can come at a price. Before you simply ramp up your paid traffic budget, let’s look at three ways to acquire customers more efficiently:
1) Increase your store’s conversion rate.
If you can revamp your website to improve the store’s conversion rate, you will be seeing more visitors complete checkout and therefore acquire more customers from the paid traffic you’re already sending to your site.
So take the time to examine the customer experience—from start to finish—and make sure there are no unnecessary friction points or barriers getting in the way of potential sales.
The simplest way to improve your conversion rate is to make sure your ecommerce store follows a path already proven by numerous successful ecommerce sites. Lucky for you, we’ve taken our combined decades of experience building revenue-generating ecommerce stores and put together a framework for you to follow called the Perfect Ecommerce Website. Check it out here!
Once you have that framework in place, which acts as the foundation of a success store, you’ll also want to practice traditional conversion rate optimization. This is a data-driven, systematic strategy to increase all the metrics across your site that lead to a purchase. Knowing what your site’s metrics are and how to judge what’s working and what’s not in each step of the customer journey is critical.
2) Retarget site visitors using ad funnels
The reality is, most site visitors will not purchase on their first interaction with your site. So leverage all traffic that has hit your site but not purchased yet with retargeting ads and email or SMS follow up.
It’s important to not be obnoxious or intrusive with this retargeting. Be intentional with your messaging in follow up ads and emails, always building trust and adding value across your marketing channels, so these visitors feel compelled to come back (not run away).
3) Develop a revenue-generating email system
We can’t stress the importance of email marketing enough! When done well, it can easily become the marketing channel with the largest ROI— in fact, email can contribute to 30% of your revenue. Be sure to capture email addresses from site visitors on your homepage and then have an automated flow ready to send information about your brand and special offers that will incentivize that first purchase.
Revenue Growth Lever #3: Sell More to Your Current Customers
The third way to increase your ecommerce revenue is to sell more to your current customers—in other words, increasing customer lifetime value. Customer lifetime value (LTV) is a golden metric for your business and a multiplier for your revenue.
Aside from creating a great brand with raving fans, the best way to increase LTV is by creating some sort of continuity program that incentivizes customers to keep coming back. A few examples include:
- A subscription program
- A membership program
- A loyalty/rewards program
- Creating consumable products (products customers will run out of and need to order again)
- Focusing on R&D to maintain a growing ecosystem of products
Ready to Increase Your Store’s Revenue?
You likely see methods for increasing ecommerce revenue all the time, but these three ways are really the only methods for doing so healthily.
By dialing in your brand and creating value for customers, you can increase your product prices while maintaining customer satisfaction. Additionally, you can acquire more customers without breaking the bank by improving conversion rates or following up with site visitors who haven’t purchased yet. Finally, you can get more out of your current customers by creating loyalty programs and subscription services to boost customer lifetime value. All of these tactics will help you confidently grow your ecommerce business if implemented properly.
With that said, if you’re a 6-9 figure ecommerce brand looking for surefire ways to produce steady revenue growth, we’d love to talk with you. Click below to contact our team of ecommerce growth experts and start taking bold steps to unlock the huge potential of growing your ecommerce revenue today!
