[Offer Grid] 📬 | How to Use These 3 Magical Online Retail Marketing Methods | Issue No. 4

Hey lovely humans!

In this world of growing artificial intelligence on nearly every platform, I want to acknowledge you for your organic intelligence in this little space we’ve made together.

It’s these warm, human connections that will continue to make the world go ‘round. And we can nurture them in all manner of beingness.

The more robot we face in the world, the more humanness we will need.

This isn’t a fear statement. I actually like and use A.I.. I like technology as a source of solutions for all sorts of issues in life.

But I don’t use it for this newsletter. These words are entirely my own. These experiences are my own. I write from the perspective of caring about my clients and readers.

So, let’s get on with it, shall we?

But first…

📈 In ecommerce retail news…

Do you Amazon? Is Alibaba part of your retail stack? The U.S. stock market is still quite bullish on the industry, as evidenced by these stock recommendations.

It’s good to be part of a winning team. Whether your business touches any parts of the businesses mentioned in the article, they certainly do help to create an environment in which ecommerce / online retail continues to thrive.

Now let’s jump into our main focus for this week, namely making more cash per shopping session.

A group of online retail marketing pros I was hanging out with a number of years ago had a rule of thumb that stated that we couldn’t afford to sell services to businesses that had average order values (AOVs) under $50. The reasoning was that a lower AOV didn’t leave enough room for profits in the business, and still be able to afford to pay for our digital marketing services.

There’s truth to this measure for everyone in business. Don’t market to people who can’t afford your stuff.

But there’s a deeper lesson here.

If your business is one of these that has a low AOV, I want to share some ideas that can fix this problem (and fix it quickly) and perhaps move you to the next level of growth in your business in the next month or three, and then ongoing.

Oh, and these three methods are not the only three arrows I have in my quiver. These are just the tip of the iceberg. Let’s call it, “a good start”.

Let’s set the stage.

First, take a look at what happens when a business has a low average cart value. 

One particular client sells craft items. Her products are not pricey. An excellent business person, she watches her metrics closely.

Her AOV varied month to month, she was definitely well under the $50 we would have looked for if she wanted to outsource her marketing.

As consultant to her business I wasn’t breaking my threshold rule.

In spite of her often low cart value, we did build her business up to $89,000 revenue months. So please know that we’re talking about a real and successful business here. We just had some efficiency to work out.

Her sales had seasonality, often around gift-making and giving. In between gift-making seasons she often had very low AOVs because she was selling $5 things and people didn’t routinely stack up their shopping carts.

One customer made a $14 purchase. That purchase cost her more money to ship out than her profit. That’s a loss.

We continually looked for and tested ways to increase sales per session.

Another example: this client was selling clothing accessories. He didn’t sell the clothing itself. His products were bling for the clothing. His AOV was $27 with very little variation throughout the year.

But then there are others. The businesses with the $175 and the $229 AOVs who can actually afford to pay staff, for example.

These businesses with higher cart values have way more wiggle room with profits. The costs to get the products out the door leave a lot more money in the till.

If you’re currently experiencing low AOVs, or if you want to increase your sales per session even if your cart value is higher, keep reading. You’ll love these ideas.

The $229 AOV business and the $14 AOV business both have opportunities to earn even more cash per sale using a variety of strategies.

And these methods aren’t only for online digital marketing. Online and offline marketing alike can benefit from these concepts.

No matter what your AOV is currently, let’s take a look at three different ways you can…

 Earn more per sale.

The first concept is one of the methods Amazon used to skyrocket its online sales: Frequently Bought Together (FBT).

You can use this technique to help customers buy more at one visit, simply by showing them what item goes with the product they’re currently looking at.

You can use an FBT app, or simply show other products on a product page in your store.

In a brick and mortar store you simply merchandise your displays to show that this hat goes with this jacket.

FBT isn’t complicated, and you can keep it simple or make it as complex as you like.

I feel lukewarm about this method of attempting to increase cart values. It’s passive.

Don’t get me wrong. I wouldn’t turn down the sales created by this method.

I’m just not a huge fan of selling by showing pictures and expecting clicks.

I don’t like it in email marketing, and I don’t like it on websites.

However, if you’re only going to do one thing to try to sell more items per shopping session, and this is the one thing you’re willing to do, add some images of items at the bottom of your product pages with links to other product pages.

It’s simple. It could result in low single-digit increases. But hey, you won’t want to turn down more sales, right?

Now, if you want to do something a little more engaging and active, here’s method number two.

The second method you can use to improve your AOV is bundling.

How many products do you offer in your store that, if a customer bought one she’d be even happier with three?

Call me crazy, but frequently when I find a clothing item I like I buy multiples of the same item.

My friend the crafter (with the $14 AOV) discovered that she could move the needle up to $45 and more by creating bundles of items.

Same with my bling friend. People who like bling frequently like it in different ways. So why not offer bling for a bunch of different outfits.

And, not for nothing, after about a year of doing this he nearly tripled his annual revenue. Bundling was a big part of his success.

I mean, when you think about it, doubling or tripling wouldn’t be that hard if you’re selling in bundles.

Sure, not everyone will buy a bundle. But if you’re making $27 on average and you make 100 sales (just to make the numbers easy), you’ve made $2,700.

Now, if just 10% of your customers buy bundles of three (which makes their cart value $81), you’ve increased by $810.

That 10% would only have earned you $270. But because you asked them to purchase a bundle, you earned $810.

Now 10% of your customers earned you 30% of your revenue.

So can you get more customers like these?

How can you invite 30% of your customers to purchase a bundle of products, up from 10%? 

At 30% you’ve nearly doubled your revenues, making $2,430 (with far fewer customers).

That’s less shipping, packaging, tracking, follow up, and all of that.

Maybe your cart value isn’t as low as $27.

If bundling was the only crafty bit of business sorcery you managed in a year, you’d certainly be doing something right.

And you’ll find that you don’t just make bundles of blue socks. You can also offer color variety packs. Or you could try all blue with different styles: knee highs, no-shows, and crews. And then you can try color and style packs. Or make-your-own-set.

Whatever it is, the sky is the limit on creativity when it comes to bundling.

If customers like 3-packs, will they buy 4-packs?

Bundles don’t require an app either. Don’t make this hard.

You might start by creating a SKU bundle on its own product page. Show photos of the things together, or whatever your bundle looks like. With its own SKU you have a bona fide store item. So if you’re doing catalog ads, collection pages, or whatever else, this bundle shows up as a single product.

OK, you say. But what about some big guns? What else do you have that can really blow things up?

I hear you.

Let’s put some mustard on this hot dog.

Now, for the third way to increase your AOVs, this is one of my favorites.

Honestly, it’s bundles on steroids.

Let’s talk about subscription boxes.

If you sell consumables, subscription boxes are the bees knees.

Seriously, send out a box of your things, they get used up, and send another the next month.

And it’s all on autoship until the customer says stop.

Funny story, I was coaching in an online retail digital marketing group and one of the brightest stars in the bunch of students was a young man who sold a subscription box of tampons. No kidding. He was doing great month after month. He was killing it.

There are two lessons there. One, you can sell anything by subscriptions. And two, you don't have to be the same sort of person as the customer you’re selling to.

Anyway…

Subscription boxes are brilliant. 

They’re great for moving larger amounts of product than you might have sold otherwise, without it.

And for increasing the lifetime value of your customer, these are also the way to go.

On average, across a number of industries, the stick rate (retention of a subscriber) tends to be about four months.

That’s not a real number for you, but it gives you a rule of thumb to look at as you start.

Some businesses and products lend themselves to subscription boxes more easily than others. But, as I said earlier, the sky is the limit when it comes to creativity.

I don’t quite see how to do subscriptions for high ticket items, but those are different businesses with different issues. I won’t tackle those today. I could see this model work for adjacent products that go with your high ticket sales.

Reply to this email if this is your situation.

But for consumer items, craft items, health and beauty products, supplements, food items, pet toys, printables, all sorts of apparel, home decor, software, luggage, jewelry, and any sort of consumable or items of the sort that a person could reasonably or unreasonably want more than one, subscription-of-the-month will work.

If you can ship it, and if you can sell the need for monthly purchases, you can sell a subscription box.

Imagine the process. 

Each month you set up your 15… 55… 650 boxes in a line. 

You’ve got the inventory, packing materials, and whatever other extras you might add in (because who doesn’t love an extra sample or sticker or gift in a package?)

You’ve got your subscription customer labels.

And out the door you go, using whatever your shipping method is.

Track your results.

Subscription box fulfillment day should be the biggest boom to your regular monthly gross each month.

You’ll hit those credit cards each month, like clockwork.

You’ll send out those boxes each month, like clockwork.

It’s marketable. It’s predictable. It’s beautiful.

Then you can sell more subscriptions. And you’ll want to sell more subscriptions because the renewals (called stick rate) will fall off. It’s just part of doing business. 

Some people will come in new each month. And some people will fall off.

As I mentioned earlier, you can start by using the industry standard of four months as your standard expected stick rate.

But then track your numbers. Maybe your stick rate is five months. Or maybe it’s nine months. 

Stick rate actually has more to do with relationship building than the types of products you’re selling.

I would argue, though, that if your stick rate is only two months, or if you get high refund requests, you have issues beyond renewals.

As you’re starting, factor in a 1-2% refund rate to start, and go forth and prosper.

When you learn your numbers you will learn what to adjust.

What do subscriptions do for your average cart value?

How can you turn your subscription customer segment into a thirsty community?

Promos by email and social media surely will stoke the fire and encourage new members to buy the subscription.

But the subscription buyers themselves have already proven themselves. What more can you give them to keep them coming back, month after month?

Giving isn’t just products. Giving is also building that warm human connection.

Now more than ever humans crave connection. Being part of your community will be a gift to your customers. Throw some love on them regularly. Treat them like the precious part of your busines that they are. Find ways to show them how to use your products (whatever that means to you and to them).

Their happiness can lead to your happiness.

OK, dear friend, that’s it for this week’s rant.

Next week, more good ideas about ecommerce, retail, and how to succeed using proven methods. I can’t wait!

Best to ya,

Amy

P.S. We’re one week out from my new short-course that showcases 40 different methods you can use in your store to spice up any sale. These are for every day, special offers, and whenever you want to change up your selling environment.

And none of the methods include the dreaded, “Shop Now” button. (Shudder. I hate those things.)

The course is a short, highly consumable, easy to apply, choose-your-own-adventure format.

Watch this space for updates.

P.P.S. Please forward this email to anyone you know who works in ecommerce or retail. That’s online, brick and mortar, or both. As they say, “sharing is caring”. (OK, that was too sweet, but whatever.)

Always feel free to reach out with ideas or comments.