Using Data to Shorten Your E-Commerce Sales Cycle
As publishers have gotten deeper into the e-commerce game — selling subscriptions, digital memberships, event tickets, and affiliate products online — we have turned our attention to the infamous marketing funnel.
We can see what percentage of visitors become email subscribers, how many email subscribers engage with content, and what portion of those readers convert to revenue-generating customers.
But while we’ve grown obsessed with understanding where we lose people along the funnel, we often forget to pay attention to another equally important factor: time.
Moving readers through the funnel faster leads to dramatic revenue growth. You get cash sooner, and that cash can be reinvested in campaigns to drive the top of the funnel more rapidly. It’s simple math; if you can get a prospect through the funnel in one month rather than two months, and you continuously invest in filling the top of the funnel, you will double your sales.
On the ad sales side, we understand the power of a faster sales cycle time. A recent Harvard Business Review article showed that the half-life of a digitally sourced lead is extremely short, and most companies are too slow in following up on them.
Once someone’s behavior signals they’re ready to buy, it’s time to take swift action. HBR found that, “firms that tried to contact potential customers within an hour of receiving a query were nearly seven times as likely to qualify the lead … as those that tried to contact the customer even an hour later—and more than 60 times as likely as companies that waited 24 hours or longer.”
It’s time to apply these principles to the e-commerce side of our business. In this article, we’ll explore how data can be our pal in accomplishing such a feat.
Find Your Focus
Before you can start optimizing your e-commerce sales cycle, you need to understand how it works right now. Begin by measuring your current sales cycle time, meaning the average time from first interaction to conversion.
Usually publishers just look at funnel stages in aggregate: How many visitors did we have last month, how many email newsletter sign-ups did we get, and how many subscriptions did we sell? Instead, we need to start looking at cohorts to figure out how long it takes an individual reader to go from first-time visitor to paying customer.
The good news is that most analytics suites contain the ability to track this. In Google Analytics, for example, the feature is called the Time Lag Report. This report counts the number of days from the first user interaction (e.g., impression, click, direct session) to conversion. If you’re not looking at this data, now’s the time to start.
Next, identify any bottlenecks in your cycle time. Start by segmenting your time lag analyses by different groups of customers. Consider things like how long it takes to convert someone who comes from organic search versus social, or from an email campaign versus direct, or from mobile versus desktop. Are there any significant delays in conversion in any of the segments?
Once you’ve identified gaps, you can find a segment to focus on and come up with a plan to test tactics to shorten the e-commerce conversion cycle time.
Test These 3 Things
The best way to work towards shortening your conversion cycle time is to theorize as to why there’s a delay in certain segments. Think through why certain strategies may or may not be working. Then brainstorm a list of possible solutions and test them.
To give you some food for thought, here are three things proven to accelerate the sales cycle. Consider picking one, depending on what problem you’re trying to solve.
- Improve your value proposition description. Most websites fail what I call the “5-second rule.” If you want a customer to take action (i.e., sign up, subscribe, enroll, purchase) you have 5 seconds to catch their attention. You must demonstrate who you are targeting, what problem you solve for them, and why you can do that better than anyone else immediately. Otherwise, you’re likely to lose them. Can you do a better job of explaining who you are and who you want to help across all your marketing materials?
- Reduce the risk of your offer. It’s six to seven times easier to upsell someone compared to getting them to say yes in the first place. Ask for a lower commitment. There are a few ways to do this. You can offer a lower time period; say, a monthly membership instead of annual. You can offer a lower tier product, like access to your archives but not your live webinars. Or, you can offer a money-back guarantee or trial period.
- Personalize the content. Even if you’re not prepared to implement 1:1 personalization, can you at least segment your readers into interest categories and deliver content that is most relevant to that segment? A classic example is a newspaper detecting someone is a sports fan, and then serving them sports content above all other types.
You Still Need to Nurture
All of this is not to say that you need to beat a prospect over the head with a sales offer the second they arrive on your site. Rushing to the sale will almost always backfire. By monitoring your time to convert, you can delicately balance lead nurturing with striking when the iron is hot. Finding that sweet spot allows you to ask for the appropriate sale once the prospect has indicated interest through their behavior.
Shortening the e-commerce sales cycle for your digital publishing business can generate impressive revenue growth. But like any business decision, you can’t charge blindly ahead when altering your marketing funnel. Instead, take the time to analyze your existing sales cycle and identify the weakest points. From there, gather the team and think about why those lag times exist. Once you’ve found your weak points and have crafted some compelling theories for why your sales cycle slows at certain points, you can systematically take steps to improve the cycle and hasten the time to conversion.
Rob Ristagno, Founder and CEO of the Sterling Woods Group, previously served as a senior executive at several digital media and e-commerce businesses, including as COO of America’s Test Kitchen. Ristagno is passionate about helping others grow near-term revenues by applying data science to uncover and test low-risk, high-reward sales and marketing strategies. Committed to spreading this message, Rob is the author of A Member is Worth a Thousand Visitors and the developer of the Growth Mindset Assessment.