Growing e-Commerce revenue can seem like a daunting task: there are many moving parts, and an overwhelming number of constituencies involved. In this post, we’ll highlight some popular e-Commerce revenue growth strategies to help you select and implement a growth plan of your own.
- Marketing has evolved from an art form to a science (but don’t neglect the importance of a good brand)
- First there was demand generation, then there was testing; today, eRPM represents the next revenue growth frontier
The art of online marketing
Despite advances in both technology and strategy, there will never be a substitute for the marketing professional: these individuals are – and will probably always be – responsible for creating a strategic framework for success and for performing whatever heavy lifting is required by the task at hand. To foster growth, some marketing professionals are biased towards promotions and demand generation, and with good reason: in the past, demand generation and market advertising represented the key – indeed, the only way – to success. Today, however, a revenue growth strategy that relies too heavily on demand generation makes the marketer’s goals more difficult to achieve. Advertising costs are rising and marketers are facing rapidly diminishing returns.
Some great deal of other marketers rely on branding and user experience – these individuals often have a passion for aesthetics and often champion major site re-design initiatives.
Both approaches have the potential to yield significant strategic value and produce revenue growth; however, in practice these strategies require significant and continued investment in terms of both time and money.
It’s about measurable results
Considering the stakes, many companies are incorporating new website testing methods as a part of their existing strategies in order to measure the effectiveness of costly marketing campaigns.
The argument is sound: rather than arguing internally about which website changes are most appropriate, companies are letting live visitors drive their roll-out plan. Often times, online testing will uncover unexpected results that reveal strategic visitor preferences.
However, the use of A/B or multivariate testing (MVT) is not without its risks: as described previously in our recent post, A/B and multivariate testing does not work on e-Commerce sites, the use of traditional testing solutions – as in, those that ignore the time-varying nature of visitor behavior – is like driving a car while only paying attention to the rear view mirror.
It’s about user experience
Another popular revenue growth strategy is the personalization of e-Commerce sites. Personalization is a growing product category that has attracted may new players to the e-Commerce space. In fact, some A/B and MVT vendors are now starting to emphasize ‘the experience’ by drawing a parallel between test outcomes and positive experiences, thereby eking a seat in the personalization space by association.
The most popular features in this category are visitor targeting, product recommendation, badging, and merchandising. Here, the argument is made that a more personalized experience will tend to result in more positive revenue outcomes.
While this approach makes sense, often times the technical capabilities of the software available today are lacking. One of the best ways to ‘smoke test’ the value of any particular solution is to ask its users exactly how much new revenue was generated over a certain time interval as a direct result of their personalization campaigns.
It’s about sustainable revenue growth
e-Commerce Revenue Performance Management solutions have been introduced recently to help bridge the gap between testing, personalization, and demand-generation efforts. However, some well-known brands remain skeptical – their e-Commerce site, they proclaim, plays a much bigger role than simply a revenue-generator. In fact, some would claim that promoting company brand and driving traffic to their brick-and-mortar stores are the website’s top objectives.
Fortunately, the ability of eRPM solutions to optimize in real time, handle multivariate site changes spread across multiple pages, and capture multiple goals and transactions, does not preclude its use for other objectives, including general branding, promotion, and as a leading source of actionable insights. In fact, eRPM solutions empower marketers and brand managers to interact with their live audience while generating real time feedback in measurable ways. This enables data-driven decision-making that benefits both the strategic (brand) and tactical (revenue generation) corps.
Wrapping it all up
The landscape of online marketing is constantly evolving – we expect to see the expansion of current roles in e-Commerce as technology enables richer and deeper optimization techniques. eRPM represents a new frontier in not simply revenue generation tactics, but also as a chief source of actionable insights that can have significant strategic importance for brands.