Increase Customer Acquisition, Conversion Rates and Profit ...

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Jun 26, 2012 (4 years and 9 months ago)

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Increase Customer Acquisition,
Conversion Rates and Profit Margins
with Znode
®

© 2011 Znode, Inc. | 888.755.5541 | www.znode.com
WHITEPAPER

Being in more places at once enables you to attract more
customers, thus allowing for higher revenue potential. The Znode
ecommerce platform provides businesses the ability to execute a
comprehensive multi-store strategy that has been a key component
to their growth objectives and online success.”

-Travis Williams, Director of Marketing
SK8 - 1.3.11
a Yell Group Company
Table of Contents
Introduction.............................................................................................................................3

Why do you Need a Multi-Store Strategy?............................................................................4

Dividing your Business............................................................................................................5

Examining Sales and Profitability............................................................................................6


Determining a Multi-Store Strategy........................................................................................6
Implementing Multiple Stores................................................................................................7
Evaluating Results...................................................................................................................8
Achieving Success with Multifront™......................................................................................9
Optimizing Conversions.......................................................................................................10
Potential Challenges with a Multi-Store Strategy.................................................................10
About Znode
®
......................................................................................................................11
2
Expand Your Online Footprint™

© 2011 Znode, Inc. | 888.755.5541 | www.znode.com
a Yell Group Company
Using Znode’s multi-store strategy, you can significantly increase profit
margins, as well as customer acquisition, loyalty and conversion rates.
In our previously published white paper (“Using a Multi-Store Ecommerce Strategy: How to Significantly Increase
Customer Acquisition and ROI” available at: Znode.com) we discussed how this multi-store strategy can benefit your
business. In this document, we show you - step by step – one way that this strategy can be implemented using Znode’s
industry leading ecommerce platform, Multifront.

3
Introduction
Expand Your Online Footprint™

© 2011 Znode, Inc. | 888.755.5541 | www.znode.com
a Yell Group Company
A Multi-store strategy can significantly increase sales and profitability by
enabling more targeted marketing efforts.
Companies can launch additional online storefronts in order to market to more distinct customer demographics. Doing
so increases the focus of stores to be more closely aligned with customers’ specific interests and preferences. The result:
improved customer acquisition, conversion rates, and retention.

Although retailers can already present targeted marketing in order to attract customers, it has been difficult to extend
the personalized experience to the actual storefront. But extending the personalization experience through a multi-store
strategy is precisely what creates powerful SEO capabilities, messaging opportunities, customized work flows, and more
in order to increase sales and profitability.

Using Multifront as an ecommerce platform makes it easy to execute a highly effective multi-store strategy.
But how can a company use Multifront to create and then transform a multi-store idea into a highly profitable and
efficient marketing vehicle? This article provides you with a road map to achieve this objective.
4
Why a Multi-Store Strategy?
Expand Your Online Footprint™

© 2011 Znode, Inc. | 888.755.5541 | www.znode.com
a Yell Group Company
The first step to creating a multi-store strategy is to examine your business.
How can it be divided to create smaller, niche markets?
Let’s look at ShoeStomper.com, a fictitious retailer specializing in online shoe sales. ShoeStomper.com found they could
categorize their business by Product Line, Brand, Season, Customer Type and Geography. From there, they created the
following subcategories:
In addition to the categories above, ShoeStomper.com could also segment by marketing initiative, co-branded stores,
franchise locations, or B2B versus B2C. They could even create a store to test new product lines.
5
Dividing Your Business
Expand Your Online Footprint™

© 2011 Znode, Inc. | 888.755.5541 | www.znode.com
a Yell Group Company
Next, consider the data within each category. What stands out as highly
profitable? Do some products sell at a particularly high or low volume? Are
there unique attributes about certain product lines or brands, such as lower
than average customer acquisition costs?
ShoeStomper.com reviewed sales and profitability data, using Multifront’s powerful reporting tools.
The data (above, left) shows that women’s dress shoes are a significantly
profitable product line. Further examination of this product line (above, right)
reveals that Brand B women’s dress shoes are the most profitable compared to
other brands. At right is a breakdown of the key metrics that drove sales and
profit for Brand B.
Determining a Multi-Store Strategy
Once trends have been identified, brainstorm a list of ways to both leverage what’s already working well
and improve performance of what isn’t.
ShoeStomper.com identified a number of potential multi-store strategies:

Launch a separate storefront specific to Brand B women’s shoes, leveraging this popular product line to drive
sales and profitability.

Launch a separate store specific to Accessories to take advantage of the fact that lower cost inventory enjoys
the benefit of lower Pay Per Click (PPC) marketing costs. This would allow ShoeStomper to use the lower PPC
costs to acquire customers that could then be cross-marketed to for other, more profitable, products.

Launch a separate store specific to Running Shoes in order to strengthen the least profitable product line.

Launch a separate store for a product line or brand with poor search engine performance, in order to
experiment with SEO free from risk of affecting the existing store’s ranking.
6
Examining Sales and Profitability
Expand Your Online Footprint™

© 2011 Znode, Inc. | 888.755.5541 | www.znode.com
Determine the most viable option from your list, and use Multifront™ to
easily execute it.
ShoeStomper.com decided to focus on option 1, the Brand B specific store. Using Multifront, ShoeStomper.com was
able to:

Launch the Brand B storefront in only one day using the single admin dashboard to share the merchandise,
shipping options, promotions, tax rules, customer accounts, workflows, and other attributes that already exist
on the ShoeStomper.com primary site

Establish a unique URL for BrandBwomensshoestore.com, fully supported by Multifront

Create highly targeted art, content, and messaging to visitors that could not be done on the original storefront
without impacting other product lines

Use the 21 SEO best practices included in Multifront to drive free, organic traffic

Give complete control to the marketing staff to implement promotions and merchandising management across
all stores, again, with the use of Multifront’s easy to use single dashboard

Drastically reduce development time using Multifront’s flexible, standards based architecture

Collect the useful data needed to identify business opportunities with Multifront’s powerful reporting and
analytics tools

Create Pay Per Click (PPC) campaigns with an increased quality score due to increased congruence between
PPC ad and website content, thus lowering customer acquisition costs and increasing ad positioning and
customer acquisition volume

Obtain co-marketing funds to support PPC campaigns from the manufacturer of Brand B shoes based upon the
commitment to singularly promote the manufacturer’s brand

Supplement success of your new storefront by adding offline marketing campaigns that can support and
benefit from the targeting of the Brand B storefront
a Yell Group Company
7
Implementing Multiple Stores
Expand Your Online Footprint™

© 2011 Znode, Inc. | 888.755.5541 | www.znode.com
a Yell Group Company
8
Review your new data and compare it to the previous figures.
After launching the Brand B storefront, ShoeStomper.com found:
For Brand B, the additional storefront:

Increased the number of Brand customers by 100%

Increased Brand B sales by 116%
Overall, launching the Brand B storefront:

Increased annual company-wide sales by $1,039,500 or 7%

Increased annual company-wide profit by $599,584, or 16%
Expand Your Online Footprint™

© 2011 Znode, Inc. | 888.755.5541 | www.znode.com
Evaluating Results
a Yell Group Company
9
Five reasons why ShoeStompers.com experienced outstanding results
Increased Reach
The launch of the second store enabled highly targeted marketing methods, which doubled the company-wide volume
of Brand B customers. The increased targeting enabled a smaller volume of traffic to convert to the same number of
sales transactions as compared to the original storefront. In other words, conversions increased because the message
was delivered to more qualified prospects.
Improve Google scores
Additionally, because Pay Per Click ads were more consistently aligned with Brand B site messaging, Google scores
increased which yielded higher traffic and lowered marketing expense.
More qualified prospects
Because the second store was more personalized to the target market, the number of transactions per customer
increased by 10%. The customers reached have a preference for Brand B, which the site specializes in. This makes
it more likely they’ll return to the site for future purchases in comparison to the return rate at the ShoeStompers.com
primary store. The second store’s narrower product focus also enables customers to locate their item in fewer clicks,
leading to increased conversions.
Higher customer relevance
Because of the small niche that the Brand B store fills, the customer can be presented with far more relevant cross-selling
opportunities, such as accessories that are very suitable to Brand B. Thus, average order value increased by 5%.
Reduced comparison shopping
Customers arriving at a niche site are coming to a site specializing in the exact brand they want. They feel that they have
arrived at their desired search target, and are far more likely to get what they want. Because of this feeling of affinity,
they are less likely to comparison shop. This reduces overall price sensitivity. By raising prices and increasing the sale
of higher margin accessories, overall gross profit margin increased by 3%. The Brand B’s manufacturer’s commitment to
share in PPC marketing expense further boosted profit margins.
Expand Your Online Footprint™

© 2011 Znode, Inc. | 888.755.5541 | www.znode.com
Achieving Success with Multifront™
Online retailers are well aware of the need to test all aspects of user
experience—for example, varieties of button colors, product positions, and
paths to purchase in order to optimize the performance and profitability of
their online store.
Most companies are limited by their ecommerce platforms. For example, should they want to test promoting a specific
product with greater prominence on the home page of a store, they first have to remove another strategic item from the
page. If they elect to continue with this risky testing proposition, the capacity for performance improvement is limited to
the amount that benefits exceed costs associated with removal of the other strategic item.
Using Multi-store, however, you can launch, promote and manage an additional storefront within a few hours. You can
run as many tests as you like in a second store without any risk of harm to your primary store.
Potential challenges with a multi-store strategy
Even though businesses produce excellent results using multi-store strategies, very few retailers are taking advantage.
Here are two of the main reasons why this is the case:
Knowledge Gap
The capability for easily creating multiple storefronts is quite a recent development. Many companies are simply unaware
that it can be done.
Burdensome Technology
Most ecommerce platforms prohibit launching a second store. Using these platforms, companies must build another
store completely from scratch - creating a new products database and a completely separate administrative interface.
Software development can reach hundreds of thousands of dollars and take six to twelve months to deploy. In addition,
storefront administrators face the added burden of managing multiple databases and dashboards.
a Yell Group Company
10
Optimizing Conversions
Expand Your Online Footprint™

© 2011 Znode, Inc. | 888.755.5541 | www.znode.com
a Yell Group Company
Znode
®
a Columbus, Ohio based company has established itself as an
industry leading ecommerce solution. Our
highly flexible
ecommerce
platform enables businesses to easily build and manage rich, multi-store and
multi-device ecommerce websites with a significantly higher ROI.
Znode is trusted by leading global brands including LoJack, Waste Management, Wawa, Channellock, Arbor Day
Foundation, Sonos, Fechheimer (Berkshire Hathaway) and others.
Znode is ranked #223 on the INC 500 list of America’s fastest growing companies.
Znode is a wholly owned subsidiary of Yell Group - a Global company that owns several media brands with over
1.3 million customers worldwide.


Contact Us
Znode, Inc.
8760 Orion Place, Suite 120
Columbus, Ohio 43240, USA
Tel: 1.888.755.5541
Intl: 1.614.768.1150
Web: www.znode.com
Resources
Product Overview: www.znode.com/znode-multifront
Live Demo: www.znode.com/demo
Customer Portfolio: www.znode.com/portfolio
11
About Znode, Inc.
Expand Your Online Footprint™

© 2011 Znode, Inc. | 888.755.5541 | www.znode.com