Years ago, I was a member of an online business forum. And I’d see some pretty strange questions. One popular one was, “My sales are down, what should I do?”
What was even stranger was the advice they’d get. Just bizarre.
What you shouldn’t do
Most of the advice would be along the lines of, “Learn SEO so you can get more traffic.”
There are three problems with this:
#1: SEO takes time to learn and do. (Even if you can find a good teacher.)
#2: Not everyone is suited to SEO.
#3: It doesn’t solve the problem.
Here’s the thing…
I’m a great believer in ‘the law of cause and effect’ – that if you’re seeing an effect, there must have been a cause.
So, if you were getting 100 sales a week, and now you’re only getting 50, something happened to cause this.
And, instead of ignoring the problem and trying something new, you need to find out what the problem is. Because, if you can fix it, you’ll double your sales instantly.
What you should do
Before you can solve the problem, you need to know what the problem is.
A sudden drop in sales is usually caused by,
(A) A drop in traffic.
(B) A drop in conversion rate
(C) Occasionally, drop in both traffic and conversion rate.
I’ll ignore C because it’s pretty rare, and because the solution is just a combination of the solutions to A and B.
So, let’s start with step 1: Finding out whether you have a traffic problem or a conversion problem.
Diagnosing a traffic problem
Hopefully, you’re using Google analytics and have it set up properly. (Including goals.)
If not, you’re going to have problems. Maybe you can get the data from web logs, but that would involve a LOT of data crunching just to get “best guess” answers.
OK, let’s assume it’s set up and correct.
Look at visitor levels over a recent period. Is traffic down?
If it is, look at traffic sources and find out WHICH traffic sources are down.
If it’s SEO, have your rankings dropped? If it’s PPC, which metric is down? Impressions? Click rate? Impression share? Average ad position? Is this metric down for all your campaigns/ad groups or just some?
Just asking these questions should, at the very least, help you understand WHY traffic is down. And, instead of a general “My sales are down”, your problem should now be, “This traffic source is providing fewer visitors because…”
But what if your traffic hasn’t decreased? In that case, you’ve got a conversion problem.
Diagnosing a conversion problem
For ecommerce sites – or any site with a checkout – you want to find out whether the problem occurs BEFORE people add to cart, or after.
To do this, you need to know what % of people add to cart. And you need this % from two different time periods.
So, say sales dropped two weeks ago, compare the last 14 days to the previous 14. Is the % up, down, roughly the same?
If it’s down, is it down by a similar % to the decrease in conversion rate?
e.g. If your conversion rate dropped from 3% to 1.5%, and the % of people adding to cart dropped from 6% to 3%, then you know the problem has nothing to do with your checkout process.
On the other hand, if % of people adding to cart only dropped from 6% to 5%, that would only explain 1/3 of the decrease in conversion rate. And the reduction from 6% to 5% might just be seasonal or a statistical fluctuation.
So, chances are, it’s an issue with your checkout process..
If the problem is with the checkout process, have you changed anything? If you haven’t, has the payment processor had technical issues? Or has your site had problems connecting with the processor? (One common problem is expired security certificates.)
If the problem happens before the cart
IMO, this is the hardest problem to diagnose because there are so many possible reasons. At this point, I’d be bombarding you with questions like…
- Have you changed anything on the website?
- No, seriously, have you changed ANYTHING AT ALL on the website?
- Do you have products that were in stock and now out of stock?
- Are your competitors running sales, or cut their prices? (What do you mean you don’t monitor what your competitors are doing?)
- Has your bounce rate increased? If so, for which pages? (BTW, if your bounce rate in analytics is under 10%, your bounce rate is wrong.)
- Which landing pages are seeing a reduction in conversion rate?
- Which pages are showing a decrease in average page value?
These questions may lead you to the answer. Or, maybe you need to keep digging.
If you follow the above process, you’ll go from asking why your sales are down, to asking a far more specific question.
And, as the saying goes, a problem well-defined is a problem half solved.
But, of course, to do this, you need good data. And, unfortunately, most companies have bad data. Over and over again, when I get a new client, they have errors in their analytics.
So, my advice to you is to check your analytics to make sure that the data is correct and complete. Because you’ll never know when you’ll really need it…