Ian Hammersley is the CEO at Smartebusiness, a UK agency focused on eCommerce growth. Earlier this year he wrote an excellent book with his brother (and smartebusiness CMO) Mark. It’s called “Ultimate Guide to e-Commerce Growth: 7 Unexpected KPIs to Scale an e-commerce shop to £10million plus”. I’ve known Ian and Mark for many years so as soon as I heard about the book I just knew I had to get one of them on to tell us all about it – and share some great tips from their years of eCommerce experience too!
About the Business
- Agency business based in the UK and New Zealand
- 16 years industry experience
- Co-author of the KPI strategy book Ultimate Guide To E-commerce Growth: 7 Unexpected KPIs To Scale An E-commerce Shop To £10 Million Plus
How Ian Got Started in eCommerce
Ian and his brother Mark started an eCommerce consultancy 16 years ago. At that time they were already doing lots of general digital work but were driven by their clients into the newly burgeoning eCommerce environment. The two quickly became fascinated with the puzzle of why some businesses were growing and scaling well and others weren’t.
The team had half a dozen clients that were consistently scaling up and half a dozen that really weren’t moving. Frustrated with not understanding the underlying metrics that were causing success or lack thereof, the two wanted to dig in and understand what the consistent elements were that made businesses successful or not. For the past 16 years, Ian and Mark have devoted themselves to identifying those elements, the result of which are contained in the Ultimate Guide to E-commerce Growth.
The book embodies the primary philosophy that the brothers have in regards to successful eCommerce business, which is that growth is all about the maths. The great thing with this approach is that it takes the emotional component out and gives guidance based on data and numbers.
Listen to learn how taking the emotion out of decisions can transform your business
Understanding Conversions
One of the KPI’s that Ian says is particularly valuable is their breakdown of conversions. Rather than approach conversion as all encompassing, Ian prefers to break it into three parts: Add to basket, basket to check out, and from check out to purchase.
The numbers here are based on businesses who have a healthy customer base with a proportionate amount of return business.
1.) On average, 10% of all traffic should add something to their basket. Ian says it can be difficult to get your conversion rate up if you don’t have reasonable repeat business and that metric will be lower for people with fewer repeat customers
2.) Of those people who are in the add to basket category, on average 55% should move on to checkout.
3.) Of those people proceeding through checkout, 85% should place the order.
When looking at these numbers, businesses can begin to see where their conversion rate is lacking, which can help them decide exactly where to focus. For a company who has an 85% checkout rate, but a 1% add to basket rate, it is far more crucial for them to focus on their add to basket, which will create a positive lift throughout.
Data is Key
Ian says that for their own business, the team forces themselves to always look at the data before making a decision. Guessing, he says is emotional and doesn’t lead to proper solutions.
The common denominator for all business types is that it’s ultimately the maths holding it up. Ian says that customers looking at the actual numbers is the best way to make decisions.
Average Order Value
Another favorite KPI of Ian’s is Average Order Value. Getting your average order value up by a small amount can cause massive outcomes. If for instance, you have an average order value of £100 and you can increase it by 3 quid, the effect is mind blowing on overall revenue.
There are only two ways to get the average order value up.
1.) More expensive products
2.) More items per order
This is a very simple area to optimize in order to get amazing returns. Ian says the easiest way to do this it to get more items per order by doing things like adding a ‘sweety page’ between the basket and checkout that offers add on items.
The best way to incentivize shoppers to add more to the basket is to offer a one time deal in that space. When the online customer has already made the emotional decision to buy from you, it’s fairly easy to get them to buy more from you. The worry is that upselling will make people leave with the intention of returning later, but Ian says this is unfounded.
If you’re selling a problem solving purchase like a car battery, people are coming for that specific need. Getting them to buy a complimentary item is the goal—and Ian says adding 10% is a great benchmark.
Ian and Mark’s book contains five more stellar KPIs for growing your business by the numbers. Their 16 years of industry experience and obsession with finding patterns that make success happen for eCommerce companies is packed into this incredibly valuable book.
eCommerce Book Top Tip
- Shoe Dog: A Memoir by the Creator of Nike by Phil Knight
eCommerce Traffic Top Tip
- Email—you don’t have to pay to recruit a customer. Think of google shopping as recruitment and email as reactivation
Tool Top Tip
- Google Analytics is a free, incredibly powerful kit. The trick is knowing where to look. It’s important to focus on what’s good and what’s bad. If you don’t know what you’re looking at and what you need to be looking for.
Growth Top Tip
- The Market Square Test—Ian and his team always ask the following question: If you were in a market square and all the market traders were selling the same thing you are selling, you need to know: What is your value proposition? What are you selling it for? What’s the delivery? How long is it going to take to get to its destination? What’s the return policy? Etc.
Interview Links
Related episodes
- My top 5 eCommerce Books to read over Christmas 2015
- Latest UX tips and tricks with Matt Isherwood
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Just ordered the book! Great episode
Thank you, Jake