Increase Customer Acquisition & Profit Margins Using Multifront TM

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1 Increase Customer Acquisition & Profit Margins Using Multifront TM Learn how Multifront ecommerce can help you significantly increase customer acquisition, profit margins, loyalty and conversion rates. Presented by

2 Overview 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 to Significantly Increase Online Retail Sales 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. Topics Include: Dividing your business Examining sales and profitability data Determining a multi-store strategy Implementing multiple stores with Multifront Evaluating results 5 Reasons for success with Multifront Market testing with Multifront Challenges of a multi-store strategy About Multifront Page 2

3 Why do you need a multi-store strategy? 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 TM as an ecommerce platform makes it easy to execute on 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 roadmap to achieve this objective. Page 3

Dividing your business 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.

4 Dividing your business 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. Page 4

Examining sales and profitability data Next, consider the data within each category. What stands out as highly profitable? Do some products sell at a particularly high or low volume?

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.

5 Examining sales and profitability data 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 crossmarketed 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. Page 5

6 Implementing multiple stores with Multifront 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. Page 6

7 Evaluating results 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 B 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% Page 7

8 Five Reasons for success with Multifront Why did ShoeStompers.com see such outstanding results? 1. 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. 2. 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. 3. 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. 4. 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%. 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. Page 8

9 Optimize Conversions with continuous testing 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. But 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. But using Multi-store, 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. Challenges with a multi-store strategy Even though businesses produce excellent results using multi-store strategies, very few retailers are taking advantage. Why? 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. Take advantage of Multifront to make a multi-store strategy simple and cost effective Multifront is a powerful.net ecommerce platform that adapts to your needs. It s designed to help you build web stores faster than ever before without compromising creativity. And, it s the only ecommerce platform that makes efficient multi-store strategies viable. Page 9

About Znode, Inc. As an established software company, Znode s mission is to improve all aspects of online commerce: store development, sales analytics, and the shopper experience.

10 About Znode, Inc. As an established software company, Znode s mission is to improve all aspects of online commerce: store development, sales analytics, and the shopper experience. We do this by creating highly adaptable software that s easier to implement and support, provides better backend data, and works intuitively for the shopper. Our mission and agility help us focus on what s next (innovation) and what s now (the needs of our customers). Established and emerging creative agencies and retailers choose Znode because our products help them work faster, smarter, and more profitably. Znode Customers: Visit Znode.com or call to learn more about how a multi-store strategy on Multifront can increase your sales and profitability. Page 10

10 Things to Look For in ecommerce Solutions

10 Things to Look For in ecommerce Solutions Introductory Page 2 Introduction Choosing an ecommerce platform for your enterprise or B2B website generates many concerns regardless of whether you re an administrator,