4 Steps to Increase Online Conversion Rates — Catalog Success Webinar Recap, Part 2

For catalog/multichannel merchant Creative Irish Gifts, 2005 proved to be a turning point. After 18 straight years of profit growth, the marketer of Irish and Celtic-themed gifts was confronted with a crisis. It was greatly overmailing a tapped-out prospect universe, said Rob O’Connor, vice president of Creative Irish Gifts, during the recent Catalog Success webinar, The Coordinated Sell — Redefined for 2009 & Beyond, sponsored by Sigma Micro. The result: For the first time in the company’s history, it lost money.

This led to a strategic decision on the company’s part to shift its focus online. With the company realizing 2 percent to 3 percent annual growth online since it went live with its e-commerce Web site in 1997, and Web sales accounting for 33 percent of the company’s total revenue in 2005, O’Connor decided it would be wise to focus his resources on converting customers online.

O’Connor presented four steps his company followed to get itself back on track and earning a profit. It started with improvements to its site. As a result, in the three years following the shift in focus to online, Creative Irish Gifts’ online revenue has increased by an average of 8 percent (of total revenue) per year, with online revenue projected to account for 65 percent of total company revenue in fiscal year 2009.

(For part one of our coverage of this webinar and a recap of the presentation by Stephen R. Lett, president of the catalog consulting firm Lett Direct, click here. You can also find a link to take you to a free rebroadcast of the event at the bottom of this article.)

Here’s the four-step process Creative Irish Gifts followed to increase its online conversion:

1. Offer a broader choice of merchandise online. With the introduction of Web-exclusive products, Creative Irish Gifts was able to offer a broader selection of products for those consumers searching for specific products, O’Connor said. These products generally come from four sources:

* items judged as good sellers but not financially justified to be in the catalog;

* marginal-selling items dropped from seasonal catalogs;

* line extension of products (e.g., “for more Belleek China, go to our Web site”); and

* all drop-shipped items discontinued from the catalog, which are particularly attractive because there’s no inventory cost associated with them, O’Connor noted.

Web-exclusive items have provided strong profit contributions, O’Connor said, because “there’s virtually no direct selling expenses.” For Creative Irish Gifts, Web exclusives have increased line items per order and average order value. He further advised other marketers to cross-merchandise Web exclusives in their catalogs through the use of box ads and referencing line extensions.

2. Recognize that mass e-mails enhance your overall contact strategy. O’Connor cited the following techniques Creative Irish Gifts implemented to improve its interactions with customers and prospects:

* it sent one e-mail per week, and more preholidays;

* conducted A/B split testing to refine promotions (e.g., minimum order for a discount vs. no minimum);

* promoted the benefits of the e-mail campaigns in its catalog (e.g., sign up to receive 10 percent off …); and

* at the start of every e-mail promotion, the offer is prominently displayed at the top of the company homepage in a banner ad for the duration of the promotion, a technique that generates twice as much revenue as the clickthrough revenue that Creative Irish Gifts gets from the e-mail, O’Connor said.

3. Build traffic to the site by means other than the catalog. Tactics used by Creative Irish Gifts include affiliate marketing, paid and organic search, and shopping sites. “We studied the back-end profitability on this, and it’s very low cost,” O’Connor said, noting that upon testing, the two-year lifetime value of prospects acquired through these channels matched those of catalog-generated customers.

Natural search has proven to be particularly effective for Creative Irish Gifts, O’Connor said. “Identify your top keywords,” he said, “and then feed your site with these keywords.”

4. Site improvements to enhance the conversion rate. Now that you’re bringing all this new traffic to your site, focus on increasing the conversion rate, O’Connor said. Here are some of his keys to conversion:

* optimize site search function;

* analyze cart abandonment and site 800-number feedback (At Creative Irish Gifts, those who abandon their carts get e-mail surveys asking about their shopping experience and how it can be improved upon.);

* offer expandable navigation menu choices so when you click on a homepage product category you get a drop-down menu of all the subcategories;

* ease of navigation; and

* rapid checkout.

If you missed the webinar and would like to tune in to a replay, click here to register and replay it for free.