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How to: Improve Conversion Rates, Increase your Advertising Effectiveness and Build a New Asset all with one Simple Technology - Lessons Learned

A guest post by Iz El-Bahnasy, founder of Gather. Gather is an intelligent customer capture tool for Shopify, that is specifically engineered to grow your store’s email list and help increase sales.

Building an email list of prospects and existing customers is a pivotal strategy for many online store owners.

In this article, I demonstrate why that is the case, and how to leverage technology to automate the building of your email list as a highly targeted channel and an assent to your business.

I work with many online stores. In my conversations with merchants, the questions that often come up are:

How do we get more qualified traffic into the store without relying on advertising?

How do we improve conversion rates and profit margins?

To address these questions, let’s start with 5 main sources of online traffic, also known as channels to the market.

Channels to the Market

  1. Advertising
  2. Social media
  3. Customer referrals
  4. Email marketing
  5. Organic traffic from content marketing

To make effective, each of these channels require time or money.   Let’s have a look at each one.

Pay Per Click advertising is effective, be can become costly. Once you stumble upon a profitable keyword (i.e. a keyword that converts well, and is attractive in pricing), it is usually only a matter of time before competitors place higher bids, kick starting a - non profitable - bid war.

Producing relevant content on social media takes a lot of time and effort; and the effectiveness of your efforts are hard to measure.  Social media works well with consistency; the more often you post something the better the channels work for you.

Customer referrals are usually more effective than advertising. Customers are more likely to trust recommendations from their friends. But in order for referrals to work effectively, you sill need to work hard on seeding the initial funnel of customers. If you’re starting out, relying on referrals isn’t the best strategy.

When it comes to enticing repeat sales, or promotions, email is king! Email marketing has proven to be very effective over the years. Like with referrals, before you can utilise email marketing, you need to first build a substantial mailing list.

Organic traffic takes a lot of effort and time to build up.  It takes writing content that is both relevant to the products you sell and has search demand on Google to attract a substantial number of customers to your site. Once established, organic traffic becomes a great evergreen source of leads and sales.

In the early days of your store, how can you tackle the above channels smartly? What channel should you start with?

First, Focus on Improving Conversion Rates

There are two things we can do to increase sales.

  • Increase the number of potential customers coming in. (i.e. the traffic, or seeding the funnel).
  • Improving our conversion rates (i.e. converting more visitors to customers).

It isn’t great for your team’s moral that when you launch, nothing happens for months. Hardly any traffic, and no data to work with.  So If I was to share a tip with you, it would be that successful stores I have worked with have started by investing in advertising, from day one, whilst working on other channels.

They then slowly shift away from advertising, as their organic traffic, social media and email lists grow.

Whilst they are in that initial phase of relying solely on advertising, their profit margins are low because advertising eats away at it. So they have to work hard at optimizing the other factor, i.e. conversion rates.

Conversion rates could simply be explained as the number of sales as a ratio of the number of visitors. Let’s say that this is typically around 2-5%.

This means, over 95% of visitors, and the money spent to acquire them, is lost. Remember, these will be targeted visitors, they will be interested in what you are selling; but will either not be ready to buy or they will just be shopping around.

So isn’t it such a waste, when they walk out of your store and never come back?

What about if we could do something else with the 95% of customers who come and leave. What about if we had another conversion funnel for them.

What about if we could extend the initial funnel from simply

visits -> sales,

to

visits -> staying in touch -> then sales.

The staying in touch phase is commonly known as Activation, which means starting a relationship with your customer first. I found that email capture is one of the best ways of staying in touch with a customer. Here are a number of ways my clients capture customer emails:

  • Through an email signup form on each page of their store
  • Through a signup form on the order confirmation page
  • By using a widget or a popup signup form

For example, working with Nina from beautifulbecause.com.au, I found that using an opt-in popup widget produces visitor -> signup conversion rates of typically 10% - 20%. Ok wow, so instead of losing 95% of your visitors, you are retaining a chunk of them and have the ability to directly connect with them later.

Build the Asset

All of a sudden, instead of most Nina's hard work and money going to waste, with an email popup widget she is able to build a new channel to the market, the email channel. Over the months, the newsletter list became an integral asset of Nina’s business; one that adds to its valuation.

What Nina does now, is that she sends out a weekly newsletter with the latest offers and articles she writes on the blog, once every week to her list.

This newsletter drives spikes in sales on the day it is sent, and for a day or two after. What this means, is that in many cases, Nina should have eventually generated sales out of the visitors who weren’t quite ready to make a purchase at the point when they first landed on the store.

The customer chose to sign up instead, and with that, Nina had a better chance at converting them later.

What that also means, is that instead of having a visitor -> sales conversion rate of 2-5%, Nina could increase that by adding an extra step in her sales funnel: the Activation stage.

This Activation stage can be important for the survival, and eventually, thriving of your store.

Be the First to Give

I found with my clients, in order to gain the permission to send prospect customers emails, it is always best to provide something, of value, in return.  The behavioural principle behind this is called Reciprocity; the act of giving before asking

In eCommerce, doing so should be fairly simple. Giving a discount code (no matter how small it is) typically achieves these results:

  • It increases the chances of customers to signup to your mailing list, as there is something in it for them.
  • It makes customers feel good, in that they don’t have to pay full price for their order.
  • It drives action to make a purchase.
  • It can make your store the preferred choice over competitors.

I found, whilst working with my clients, that it didn’t really matter how big a discount code was. I run through the experiment I undertook with Beautiful Because that cemented this, it is documented in a case study I wrote about them.

In summary

Activating a customer is the middle step, required to help increase your conversion rates, especially when you wouldn’t typically convert most of your customers from the first visit.  Giving something to your customer in the return for their contact details works well in getting permission to add them to your mailing list. Over time, your mailing list becomes an asset to your business.

About the Author

Iz El-Bahnasy is the founder of Gather. An intelligent customer capture tool for Shopify, that is specifically engineered to grow your store’s email list and help increase sales.

To find out more about how Beautifulbecause.com.au; a successful ecommerce store have used Gather to add 2300 customer emails and generated over $100,000 worth of orders from customers who signed up  through Gather, get the case study here.

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