There are several levers you can use to optimize WooCommerce . From the right growth strategy to target-oriented success measurement and increased performance. This is how your online shop becomes more successful.
Our interview with eCommerce expert Franz Sauerstein reveals the most important tips, tools and methods. He helps companies optimize their WooCommerce shop every day.
Franz, what do you think are the most important approaches for optimizing WooCommerce? How can shop owners improve their conversion even without considerable effort?
Optimize can mean many things - but for our clients, it's about increasing the margin before overhead and profit. Both can be improved by reducing costs - but you can't spend less than nothing 🙂 That's why, after discussing potential cost savings, we focus on increasing revenue.
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 successful, rapid growth of a shop, you need to know exactly which of these three levers will realize the greatest additional margin (or profit). And which effort is necessary 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 focuses on acquiring new customers and increases this by 30 percent, then the margin and profit will also increase by 30 percent.
Leverage: Sales per order and regular customers
But if the shop focuses on more sales per order (increase of 30 percent), then the margin increases by 49 percent, the profit even by 94 percent. If the shop finds ways to turn customers into regular customers (we again calculate with 30 percent), then the margin increases by 57 percent, the profit even by 120 percent.
"More sales per order, as well as new repeat customers, increase profits more significantly than acquiring new customers."
You can easily drive this analysis yourself by looking at your operational analysis for the last 12 months and examining that data with a scenario analysis in Excel. For more on the background and a ready-made calculator, check out my post Growth Levers 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 to implement them. A good indicator is always when no efforts have been made to implement the greatest possible leverage. For example, the acquisition of regular customers. Then the Pareto principle applies. If, on the other hand, "everything" has already been tried to pull a lever, you should exchange ideas with other shop operators and look for further possibilities together. Or get an hour or two of help from an expert in eCommerce marketing.
Most likely, in conversation with colleagues or experts, you will then still find ways to pull a lever. Then you should test them one after the other. When the possibilities are exhausted, you look at the next lever. You repeat this whole process every quarter in order to always pull on the currently "longest" lever.
I see time and again that few online entrepreneurs consistently measure their success. Which success metrics should they monitor regularly? And what conclusions can be drawn from this?
Every person defines personal success for themselves. Anyone who opens an online shop wants to make a profit in the long term. For example, if the profits are to be distributed to employees, customers or society. In the short and medium term, however, the margin can also be the most important key figure for success - for example, if the shop is to grow faster. Of course: with a higher margin, you can invest more in growth in the next step.
GDPR and Facebook Ads
Profit consists of margin minus overhead. So when we talk about margin, we mean the company's margin before overhead, also known as contribution margin.
That means we already have three numbers that should be measured all the time: Margin before overhead, overhead, and profit. The margin comes from the sales, minus the
- Product costs
- The cost of handling and shipping
- The cost of marketing
These figures should also be measured constantly. The turnover itself consists of the three components mentioned above: The total number of customers, sales per order, and the number of orders per customer.
Measuring success needs a goal
If you measure these figures on a monthly basis and recognize their trends, you lay the foundation for your 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 key figures such as marketing costs per customer acquisition
- The relationship between marketing costs and lifetime value or
- The payback period 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 metrics should always be tied to a purpose. The motto "just collect them because you can" is a waste of time.
How much time do you need each month to generate the reports described? You should record that. If you use Google Sheets, you can then decide, for example, that automation via Zapier would be more efficient. Or outsourcing to a virtual assistant.
What role does the performance of WooCommerce really play? Does Google really punish slower portals? And what do you advise your customers to achieve a faster PageSpeed?
A fast web shop 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 penalized by Google - but the ranking factor pagespeed only comes into play when two search results fight for the same place in the results list, because both are equally "good" in Google's eyes. Pagespeed optimization should therefore be taken seriously, but don't let it drive you crazy.
Google Lighthouse and PageSpeed Insights in particular play in the top class when it comes to "driving people crazy". In part, aspects of the loading speed of a shop are tested that make no sense. Or the tools suggest measures that are not even implementable with modern content management systems such as WordPress , WooCommerce, Shopify & Co.
Not all measures make sense
For example, Google suggests using the WebP image format. But Chrome does not support this yet. The test also complains if you use Content Delivery Networks (CDN) - because the requests are routed via an additional server. This is despite the fact that a CDN speeds up the playout of international shops at any point on the globe.
But how do you make webshops and WooCommerce faster? Simply put, the speed depends on the page size and the number of requests the browser makes to the server. The smaller the site is and the less requests are made, the faster the site loads.
The page size and the number of requests can be read out via Pingdom Tools or the Chrome Developer Tools. Both tools also provide waterfall charts to quickly visualize which loads take how much time.
Possibilities for optimization
With this knowledge, one should then:
- Compress images and adjust their display
- Enable Lazy Loading
- Use caching
- Keep all themes, plugins and WordPress even up to date
- Deactivate 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 load scripts on sites on which they are actually needed.
- Load non-critical scripts only at the end of the page build
- Update the PHP version
Every online store needs a unique selling proposition, a niche. What can that be if you sell very generic goods? Do you have a few examples for us?
No, seriously, unique selling proposition is not the same as niche! A niche is typically defined as a (demographic) group of people: Single cat owners, realtors, young mothers, car lovers... The problem is: even within these niches, people differ extremely! Real groups of people form, however, when people share similar opinions and worldviews.
A unique selling proposition is the distillation of understanding about the customer's problems and solutions - as well as their current situation. Add to that the knowledge of the competition, their offerings, and how they differ from your own offering. Last but not least, you decide which aspect of your own offering 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. Therein also lies the secret to successfully differentiate 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's 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 self-collection on a cargo bike from the nearest warehouse.
Our target group also believes that climate protection should cost something. Through this, we can enforce higher sales prices - or even subscription payments. And if our target group is very socially minded, our company might even consider distributing profits to employees (and even customers). This behavior can be leveraged to reach our potential customers where they are. And where they talk to others with similar world views or challenges (online).
What advantages do you see in general with WooCommerce, but also what disadvantages?
The fact that the software is free of charge and above all open speaks for WooCommerce . These two factors have created a large ecosystem. Ready-made Themes and Plugins are plentiful, access to capable developers is easy and the community helps each other. Just like in the WooCommerce Germany community on Facebook.
The openness of the software makes it completely changeable and adaptable to any need. The high flexibility makes WooCommerce 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. However, this is also necessary, as 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 are easiest to outsource if you don't have any technical expertise yourself? Or if the online shop is to be operated alongside the actual retail store?
The eCommerce business model consists of the main areas of purchasing, logistics, marketing and sales - supported all the way by software. 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 hosting, backups, updates, testing and data recovery (in the event of a disaster) themselves. These tasks can be outsourced for 50 to 150 euros per month. Or you can opt for WooCommerce managed hosting with good support.
Outsourcing for WooCommerce
The logistics - storage, shipping, returns - can be handled by Amazon's warehouses (Amazon FBA). Or by logistics startups like ODC. Shopping planning no longer has to be done on demand, by feel or by Excel spreadsheet.
Software such as Inventory-Planner automatically raises alarms, makes purchasing suggestions and can even order automatically. Even most of the work in marketing and sales can be outsourced: the optimization of the website, the development and implementation of marketing strategies, the reporting or the work on advertising campaigns are suitable for this.
I always offer our clients two options: The strategic support of the marketing or the strategic-operational takeover. In the first variant, we develop the strategy together with the customer and support the implementation and control, in the second variant, we take over completely.