You Can Grow Your Shopify Business Into A $10M Brand! Here’s How
Increase these three KPIs to turn your Shopify brand into a 7 or 8-figure business.
Many entrepreneurs and small business owners think there’s some kind of cap on how big their business can be or how much they can make. We’re going to let you in on a little secret: you CAN scale your direct-to-consumer business, and NOW is the time to do it. With eCommerce booming and becoming the most essential way to shop, your business has every potential to earn 7 or 8 figures. However, you have to scale it to see that kind of return.
We’ve made it easy with a brand-scaling framework that will help you achieve reliable growth for your Shopify store. Our framework is focused on supercharging the three most important key performance indicators (KPIs) to increase your brand awareness, customer engagement, and, ultimately, your bottom line.
ECommerce Isn’t Complicated, It’s Just Math.
You’ll see all sorts of TikTok videos and downloadable guides filled with hacks and tips to improve your digital marketing, eCommerce marketing, content marketing, and more. But at the end of the day, scaling your Shopify brand comes down to improving the three metrics that fit into our magical formula (it’s not actually magic, it’s a proven and tested formula, but magical sounds better.)
The “magical” formula:
Conversion Rate X Average Order Value X Sessions = Sales.
Let’s break down each of these metrics to help you understand how this works and why it works for all kinds of brands across the Shopify marketplace.
Conversion rate: is the rate at which you get conversions compared to the number of visits to your website.
Average order value: refers to the average amount that customers spend at your website.
Sessions: refers to the number of unique visits to your website (which is different than the number of unique people who visit.)
When we begin working with eCommerce brands, we will break down their current analytics into this formula to get a baseline we can compare our efforts against. From here, we will work to improve each of these individual metrics. While improving just one metric can make a difference in your bottom line, improving all three will have a much bigger impact. Here’s an illustration to show you the difference:
Conversion Rate
Average Order Value
Sessions
Sales per year
Baseline
2%
$75
60,000
$90,000
Difference in metrics
4%
$75
60,000
$180,000
4%
$150
60,000
$360,000
4%
$150
120,000
$720,000
If you are able to double each of your metrics, you can increase your bottom times by 8 times the baseline. While improving each metric will, of course, be good for your business, the art of scaling means being able to address all of these at once to get the best results possible and take your business to the next level. Finally, while your AOV and Conversion rate metrics have a defined amount by which you can improve, upping your sessions is an infinitely scalable, making it a valuable KPI to focus on.
The Ecommerce Brand Scaling Framework
Now that we’ve covered the formula, we will scale. As you may have figured out, this framework is designed to increase each of the core KPIs laid out in our formula above. We’re going to go through each step to help you understand their purpose and how to improve them.
Improving your conversion rate
Your conversion rate is based on many different factors:
User experience/website quality: this is the most important factor in converting customers. Ensure your website is fast, mobile friendly, well-branded, and takes the user through a good “journey” from start to finish. The best way to test and improve this area is by getting feedback from customers on the experience and adjusting from there.
Product-market fit: In order to scale your business, your product(s) must be appealing to your customers and communicate that they will solve a relevant problem in your audience’s lives. Ensure you are attracting the “right” audience to your product by adjusting targeting and be sure you have quality pictures and descriptions of your product.
This may sound like a lot of work, but never fear! We offer a custom Conversion Rate Optimization service to take the guesswork out of your hands and get your Shopify business converting fast.
Increasing your average order value
As far as KPIs go, improving your average order value may be one of the simpler metrics to achieve. Getting creative with how you sell and upsell your products is the name of the game. Here are a few, easily implementable ideas:
Offer bundle and save deals: encourage higher-value purchases by offering a “deal” on multiple different products or a pack of the same product.
Implement cross-sells: offer complimentary products or “others also bought” content on your page to encourage multiple item purchases. For example, if you’re selling dog harnesses, ensure that your harness product page includes an option to add on a leash or a matching collar.
Upselling and post-purchase offers: Offer an “upgraded” product before checkout and/or make sure that when your customer leaves, they want to come back! Offer a discount code for the next time they shop or follow up with an email to show them more products they might like.
Many eCommerce sellers skip over the average order value metric, but it is actually one of the most effective ways to scale quickly. Book a one-on-one call to discuss increasing your AOV here.
The real key: increasing sessions on your website.
As we mentioned above, increasing your sessions is the one metric without a ceiling. We approach improving this metric in a three funnel:
Increasing cold traffic: building awareness for your brand and product on a macro scale, via Facebook or Google ads.
Increasing warm traffic: turning relatively new audiences into familiar ones through email marketing, retargeting ads, and more.
Converting hot traffic: working to convert your warm audiences through abandoned cart emails, discount offers, and retargeting ads to your warm traffic.
As you scale, increasing each part of this funnel will increase sessions and lead to conversions. However, it works in tandem with the other two metrics in that, if you have 100,000 sessions per month but you don’t have a quality purchase funnel, or your website doesn’t work properly, increased sessions won’t do a thing for you.
The Final Secret: Which Metrics to Improve First
AOV and Conversion Rate: improve the experience on your site and ensure you have your cross-sells, upsells, and bundles in place.
Sessions: don’t focus on increasing your traffic until you have your other metrics in a row (that’s the saying, right?)
Need a little more help getting started? Get your website audited by our eCommerce experts and take the first step toward getting your business to BOOM!