How to prioritise conversion fixes by revenue impact

Prioritising Conversion Fixes by Revenue Impact to Stop Leaking Revenue

When it comes to stopping revenue leaks at the checkout, prioritising conversion fixes by revenue impact is crucial for e-commerce store owners who want to maximise their sales from existing traffic. This process involves identifying the most critical issues that are causing revenue loss and addressing them first. By doing so, online store owners can ensure that they are making the most of their existing customer base and increasing their overall revenue.

A study by Moz found that even small improvements in conversion rates can lead to significant increases in revenue. For example, if an online store has a monthly revenue of R100,000 and a conversion rate of 2%, a 10% increase in conversion rate could result in an additional R5,000 in revenue per month. This highlights the importance of prioritising conversion fixes by revenue impact to stop leaking revenue.

Understanding the Method for Prioritising Conversion Fixes

The first step in prioritising conversion fixes by revenue impact is to identify the areas of the website where revenue is being lost. This can be done by analysing data from tools such as Google Analytics. By examining metrics such as bounce rates, average order value, and conversion rates, online store owners can pinpoint the pages and processes that are causing the most revenue loss.

Once the areas of revenue loss have been identified, the next step is to calculate the potential revenue impact of fixing each issue. This can be done by using a formula such as: potential revenue impact = (number of customers affected) x (average order value) x (percentage increase in conversion rate). For example, if 100 customers per month are being lost due to a faulty checkout process, and the average order value is R500, and fixing the issue could increase the conversion rate by 5%, the potential revenue impact would be: 100 x R500 x 0.05 = R2,500 per month.

After calculating the potential revenue impact of each issue, online store owners can then prioritise the fixes based on the potential revenue impact. This involves creating a list of all the issues that need to be fixed, along with their corresponding potential revenue impact, and then addressing the issues with the highest potential revenue impact first.

Calculating the Potential Revenue Impact

Calculating the potential revenue impact of each issue is a critical step in prioritising conversion fixes by revenue impact. To do this, online store owners need to gather data on the number of customers affected, the average order value, and the potential increase in conversion rate. This data can be obtained from tools such as Google Analytics, as well as from customer feedback and testing.

For example, let’s say an online store has a checkout process that is causing 20% of customers to abandon their carts. If the average order value is R200, and the store has 1,000 customers per month, the potential revenue impact of fixing the checkout process could be: 1,000 x R200 x 0.20 = R4,000 per month. This calculation assumes that fixing the checkout process could increase the conversion rate by 20%.

A Worked Example of Prioritising Conversion Fixes

Let’s consider an example of an online store that is experiencing revenue loss due to several issues. The store has a monthly revenue of R50,000 and a conversion rate of 1.5%. After analysing data from Google Analytics, the store owner identifies three areas where revenue is being lost:

• Checkout process: 15% of customers are abandoning their carts due to a faulty checkout process.
• Product pages: 20% of customers are leaving the site due to poor product descriptions and images.
• Navigation: 10% of customers are getting lost in the site’s navigation and are unable to find what they are looking for.

The store owner calculates the potential revenue impact of fixing each issue as follows:

• Checkout process: 1,000 x R50 x 0.15 = R7,500 per month.
• Product pages: 1,000 x R50 x 0.20 = R10,000 per month.
• Navigation: 1,000 x R50 x 0.10 = R5,000 per month.

Based on these calculations, the store owner prioritises the fixes as follows: product pages, checkout process, navigation. By addressing the issues with the highest potential revenue impact first, the store owner can ensure that they are making the most of their existing customer base and increasing their overall revenue.

How to Apply This Method to Your Own Store

To apply this method to your own store, you need to start by gathering data on the areas where revenue is being lost. This can be done by using tools such as Google Analytics, as well as by gathering customer feedback and testing. Once you have identified the areas of revenue loss, you can calculate the potential revenue impact of fixing each issue using the formula outlined above.

After calculating the potential revenue impact, you can then prioritise the fixes based on the potential revenue impact. This involves creating a list of all the issues that need to be fixed, along with their corresponding potential revenue impact, and then addressing the issues with the highest potential revenue impact first.

It’s also important to regularly review and update your list of issues and potential revenue impact. This will ensure that you are always addressing the most critical issues and maximising your revenue. To get started, you can run a free scan of your store using a tool such as Audience Connect’s store scanner to identify areas where revenue is being lost.

Common Mistakes to Avoid When Prioritising Conversion Fixes

When prioritising conversion fixes by revenue impact, there are several common mistakes that online store owners should avoid. One of the most common mistakes is to focus on fixing issues that are easiest to fix, rather than those that have the highest potential revenue impact. This can lead to a significant amount of time and resources being wasted on issues that are not critical to the store’s revenue.

Another common mistake is to fail to regularly review and update the list of issues and potential revenue impact. This can lead to the store owner becoming complacent and failing to address new issues that arise. By regularly reviewing and updating the list, online store owners can ensure that they are always addressing the most critical issues and maximising their revenue.

Finally, online store owners should also avoid relying too heavily on tools and data, and forget to gather customer feedback and test their fixes. This can lead to a lack of understanding of the customer’s needs and preferences, and can result in fixes that do not have the desired impact. By gathering customer feedback and testing fixes, online store owners can ensure that they are making changes that will have a positive impact on their customers and their revenue.