There are several levers with which you can WooCommerceoptimize. From the right growth strategy to the target-oriented measurement of success to increasing performance. This is how your online shop becomes more successful.
Our interview with eCommerce expert Franz Sauerstein tells you the most important tips, tools and methods. He helps companies on a daily basis to optimise their WooCommerce Shop.
Franz, in your opinion, what are the most important approaches for the optimization of WooCommerce? How can shop owners improve their conversion without considerable effort?
Optimization can mean many things - but for our customers, it's all about increasing the margin before overheads and profit. Both can be improved by reducing costs - but less than nothing spent is not an option. 🙂 That's why, after discussing the potential cost savings, we focus on increasing sales.
There are only three levers to increase sales in a WooCommerce Shop. Either you step up:
- The total number of customers or
- The turnover per order or
- The orders per customer
For the successful, rapid growth of a shop, you need to know exactly which of these three levers will realize the largest additional margin (or profit). And what effort is required for the implementation.
An example: A shop with 1000 customers, 50 Euro turnover per order and no regular customers makes 50.000 Euro turnover. The marketing costs are 14 percent, the costs for purchasing, handling and shipping are 43 percent. If this shop concentrates on acquiring new customers and increases this by 30 percent, then the margin and profit will also increase by 30 percent.
Leverage: turnover per order and regular customer
But if the shop focuses on more sales per order (increase of 30 percent), the margin rises by 49 percent and profits by as much as 94 percent. If the shop finds ways to turn customers into regular customers (we reckon again with 30 percent), the margin increases by 57 percent and profits even by 120 percent.
"More sales per order and new regular customers increase the profit more than the acquisition of new customers.
You can easily run this analysis yourself by looking at your operational evaluation of the last 12 months and examining this data with a scenario analysis in Excel. More about the backgrounds and a finished computer can be found in my article Growth lever in eCommerce. Or here as a video on YouTube:
Once the potential of the individual levers is known, the next step is to estimate the effort required for implementation. A good indicator is always, if no efforts have been made yet, to implement the maximum possible leverage. For example the acquisition of regular customers. Then the Pareto Principle. If, on the other hand, "everything" has already been tried to pull a lever, one should exchange ideas with other shop operators and look for further possibilities together. Or get an hour or two of help from an eCommerce marketing expert.
Most likely, you will find opportunities to pull a lever when talking to colleagues or experts. Then you should test them one after the other. When the possibilities are exhausted, look at the next lever. This whole process is repeated every quarter in order to always pull the currently "longest" lever.
I see time and again that only a few online entrepreneurs measure their success consistently. Which performance indicators should they monitor regularly? And what conclusions can be drawn from this?
Personal success is defined by each individual. Anyone who opens an online shop wants to make a profit in the long term. For example, when profits are to be distributed to employees, customers or the company. In the short and medium term, however, the margin can also be the most important key figure for success - if the shop is to grow faster, for example. Of course: with a higher margin you can invest more in growth in the next step.
The profit consists of the margin less overheads. So when we talk about margin, we mean the company's margin before overheads, also known as contribution margin.
This means that we already have three numbers that should be measured constantly: The margin before overheads, overheads and profit. The margin arises from sales, less
- Product costs
- The costs for handling and shipping
- the costs of marketing
These figures should also be measured continuously. The turnover itself consists of the three components mentioned above: The total number of customers, the turnover per order and the number of orders per customer.
Measuring success needs a goal
Those who measure these figures on a monthly basis and recognize their trends lay the foundation for their own success. In addition to these absolute key figures, you can also derive the following values as required:
- The contribution margin per customer over the lifetime (lifetime value)
- Relative indicators such as marketing costs per customer acquisition
- The relationship between marketing costs and lifetime value or
- The amortization time per generated customer
Further evaluations can be added as required. For example, if you have found out that the marketing focus should be on generating new customers, then it is worth taking a close look at the web shop's user numbers and its eCommerce conversion rate. If a qualification strategy is established or optimized via email marketing, lead-opt-in rates and conversion rates of emails to purchase must also be analyzed.
These granular key figures should always be linked to a purpose. The motto "Just raise it because you can" is a waste of time.
How much time do you need per month to generate the described reports? You should record this. If you use Google Sheets, for example, you may decide that automation via paper would be more efficient. Or outsourcing to a virtual assistant.
What role does the performance of WooCommerce really? Does Google really reject slower portals? And what advice do you give to your customers to achieve a faster page speed?
A fast webshop is naturally more fun for the customer than a slow one - the experience is simply better. Who likes to wait? I like to use Pingdom Tool to measure loading speeds; it should be better than 2 seconds.
Slow portals are punished by Google - but the page speed ranking factor only comes into play if two search results fight for the same place in the results list, because both are equally "good" in Google's eyes. So you should take page speed optimization seriously, but not let it drive you crazy.
Straight Google lighthouse and PageSpeed Insights play at "driving crazy" in the premier class. Sometimes aspects of the loading speed of a shop are tested that make no sense. Or the tools suggest measures that cannot be implemented with modern content management systems like WordPress WooCommerce, Shopify & Co.
Not all measures are useful
Google, for example, suggests that the image format WebP to use. But Chrome does not support this yet. The test also complains when using Content Delivery Networks (CDN) - because the requests are routed through an additional server. And this despite the fact that a CDN speeds up the playback of international shops at any point on the globe.
But how do you make webshops and WooCommercenow faster? Simply put, the speed depends on the page size and the number of requests the browser makes to the server. The smaller it site is and the fewer requests are made, the faster the site .
The page size and the number of requests can be adjusted via Pingdom Tools or the Chrome Developer Tools read out. Both tools also provide waterfall diagrams to quickly visualize which loading processes take how much time.
Possibilities for optimisation
With that knowledge, you should then:
- Compressing images and adjust their display
- Activate Lazy Loading
- Using Caching
- Keep all themes, plugins and WordPress even up to date
- disable and delete plug-ins that are not needed - or replace them with better alternatives
- Avoid or reload sliders and videos in the header area of the shop
- Only sites load scripts on which they are needed
- Load non-critical scripts only at the end of the page layout
- Update the PHP version
Every online shop needs a unique selling proposition, a niche. What can it be when you sell very generic goods? Do you have some examples for us?
No, seriously: The unique selling proposition is not the same as the niche! A niche is typically defined as a (demographic) group of people: Single cat owners, real estate agents, young mothers, car lovers... The problem is: even within these niches, people are extremely different! But real groups of people form when people share similar opinions and world views.
A unique selling proposition is the distillate of understanding about the customer's problems and solutions - as well as his current situation. In addition to this, there is the knowledge of the competition, their offers and the differences to one's own offer. Last but not least, you decide which aspect of your offer you want to be known for.
Unique selling proposition vs. niche
The communication of these parts forms the unique selling proposition. And people feel understood when this communication expresses similar opinions and world views. This is also the secret to successfully differentiating generic goods: The company, the brand of the company, must have opinions and express and live them.
A simplified example: Our target group finds climate protection important. That is why we sell our washing machines with an extended warranty, free repair service, compensation for their manufacture and operation, and CO2-free delivery - if desired, by picking them up at the nearest warehouse on the load wheel.
Our target group is also of the opinion that climate protection should cost something. This enables us to enforce higher sales prices - or even subscription payments. And if our target group is very social, our company might even consider distributing profits to employees (and even customers). This behaviour can be used to reach our potential customers where they are. And where they talk to other people with similar world views or challenges (online).
Which advantages do you see in generalWooCommerce, but also which disadvantages?
The fact that the software is free and above all open WooCommercespeaks for itself. These two factors have created a large ecosystem. Finished Themes and Plugins is abundant, access to skilled developers is easy and the community helps each other. Such as in the WooCommerce Germany Community on Facebook.
Due to the openness of the software it is completely changeable and can be adapted to any need. The high flexibility makes WooCommerceit a solid choice for shops of any industry, products of any kind and all legal environments.
Another advantage of WooCommerce is the security and innovation of new features through active further development. But this is also necessary because WooCommerce is not only popular with shop operators, but also an attractive Target for hackers.
Be careful when selecting plugins
The disadvantages of WooCommerce are the downsides of the advantages: For WooCommerce itself, the core, there is no guarantee of support - you don't pay for it. At the same time, the high flexibility and the mature ecosystem make it easy to "trickle down". I've seen shops with 100 plugins too often by now. It's problematic when the shop's performance and sales suffer from such actions.
If you are looking for (good) additional functions, you will quickly end up with the premium providers who are subject to payment. These plugins are still cheaper than hiring a developer. But often you have to test many different plugin alternatives to find the right one for your shop.
This is because there plugins is hardly any pre-selection. To add a booking system (hotel room) to WooCommerce, you have the choice between the official plugin the plugin of Tyche's software and 4 other alternatives. For a layman the selection means a lot of hard work.
Which areas can be outsourced most easily if you have no technical expertise yourself? Or if the online shop is to be operated next to the actual retail shop?
The business model in eCommerce consists of the main areas of purchasing, logistics, marketing and sales - supported by the software across the board. These core areas of the business model should be managed in-house, but their subordinate tasks can be outsourced.
A few examples: No shop operator should take care of thathosting , the backups, the updates, the testing and the data recovery (in case of a case). These tasks can be outsourced for 50 to 150 euros per month. Or you can choose WooCommerce managed hosting with good support.
Outsourcing at WooCommerce
The logistics - storage, shipping, returns - can be handled by Amazon's warehouses (Amazon FBA). Or through logistics start-ups like ODC. Also the purchase planning has not to be done on call, by feeling or by excel sheet for a long time.
Software such as Inventory-Planner automatically sounds the alarm, makes purchasing suggestions and can even order automatically. Even most of the work in marketing and sales can be outsourced: website optimization, development and implementation of marketing strategies, reporting or work on advertising campaigns are suitable for this.
I offer our customers always offers two options: The strategic support of marketing or the strategic-operational takeover. In the first variant, we work out the strategy together with the client and support the implementation and control, in the second variant we take over the whole strategy.