September 07, 2022
Do you want to realize business value by realizing untapped revenue uplift potential? Prioritizing the commercial focus and planning of development and roadmap activities can be conducted in many ways. CRO optimization is typically one of the primary drivers when trying to optimize performance, or dealing with challenging times and wakening of sales. However, the full value of your optimization efforts is only realized when prioritizing across all elements of the customer journey with a data-driven approach while applying best practices in online commerce. With this approach, you will uncover opportunities to realize the full revenue potential.
Introduction
The competition for online market share has rapidly increased over the last couple of years. Efforts to grow online revenue have risen to the top of the agenda in most companies. Many have shifted from having offline sales channels as the primary revenue stream to online becoming a significant share of overall revenue. Omnichannel-driven sales have become a key driver of online success.
As a consequence - the challenge of gaining more online-driven revenue has become an even more crucial discipline for companies. The challenge of doing this and prioritizing your efforts is not a simple exercise.
In our conversations and experience with many different brands there are some common traits we typically encounter:
- The basic commercial excellence of driving online sales as a separate discipline is not prioritized or structured in the eCommerce/omnichannel part of the business. Especially when the efficiency and detail of sales optimization known from physical stores is absent, low priority, or not operational.
- There is not a clear overview of where to focus commercial efforts with the highest impact. Often efforts are centered around channel optimization or very generic CRO optimization efforts. Investments in platforms or capabilities lack a clear view and understanding of the business case compared to alternatives.
Reasons for being in this situation are often shifting priorities. Things have moved too fast to establish an online presence, or efforts around driving paid traffic have been more effectful and core focus of attention when the underlying marked growth was dramatic.
A simple place to start addressing these challenges is to establish a baseline of the current performance with a focus on what works. This is not just focusing on best practices on a generic level, but also starting to look inside to what might be possible to change with smaller concrete initiatives.
Unlocking value through uplift assessments
Valtech has been engaged by different global brands and companies to identify revenue uplifts along the customer journey and provide direct initiatives to implement.
The uplift assessments have identified estimated revenue uplift impacts for brands, where suggested initiatives - if implemented to the best extent, could provide a huge impact on the overall revenue growth seen over a year's timeline. The value is based on the last 12 months of sales and will (in addition to the immediate value) drive change, and establish new ways of working that increase important areas within digital maturity.
The factors driving the benefit and value of optimizing revenue
When looking at a commercial assessment of the online customer journey to uncover uplift potential, different focus areas can help realize where and what to optimize in order to create an uplift.
Companies do not have to look further ahead than what the existing data tells.
The primary factors driving the benefit and value of optimizing revenue are in our experience - conversion, navigation, merchandising, promotions, site speed, and traffic. Potential questions to raise could be:
- Conversion What optimization opportunities are there in the purchase flow? This includes Product Listing Pages, Product Details Pages, and the Check-out Flow.
- Navigation How can we optimize navigation in terms of product and category performance?
- Merchandising How can we optimize merchandising across the site?
- Promotion How can we improve our promotions (content/timing) to achieve growth?
- Site speed What impact does site speed have on performance, and where should we prioritize? Or improve?
- Traffic How is traffic performance and distribution, and how can a changed mix affect performance?
When calculating the estimated revenue uplift from the above areas we base this on specific initiatives suggested within one or several of the areas. The initiatives are very concrete and hands-on for the client to implement. Revenue uplift potential from each of the suggested areas of improvement are documented as an added revenue percentage to current performance.
Improvement points are prioritized and recommended and a pipeline of concrete initiatives that can either be implemented or tested is created. Often, we recommend testing before implementing, but sometimes, implementations are more relevant and evident to optimize immediately.
Summary of Approach and Key value
In our experience focusing on activating the current data and optimizing the journey through smaller commercial initiatives serve as a realization for figuring out how to optimize the existing customer journey and provide a better online experience. Areas that were previously considered difficult to execute or prioritize – suddenly become very concrete and move to the core of commerce team discussions with a boost in the commercial mindset as a result.
Besides driving internal maturity, there is an added value of this approach; everything you do in marketing efforts or other efforts suddenly becomes more effective due to having reduced friction and increased relevance for your customers.
When could this approach be relevant for you?
As illustrated in this article there is typically a lot of value (revenue) being left on the table by identifying these quick wins and executing them. But how do you know when this is the case?
In our experience this is highly relevant to look further into if you can answer yes to just one of the below statements:
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Statement |
Answer |
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1 |
I am not sure where and how to optimize of our current online commerce presence |
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2 |
I am not sure where to prioritize and execute with impact |
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3 |
I am pressured on low sales performance and lack effectful initiatives to turn it around |
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4 |
Marketing budgets are being sliced and we have been told to make the best out of what we have |
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5 |
We do not have an overview of where in the journey people drop off and why |
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6 |
We are not aware which UX initiatives are best-practiced and can help push sales. |
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7 |
The organization is not aligned on commercial priorities but prioritizes out of different reasons. |
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Client Example #1
Valtech is engaged with the leading global beauty retailer, L’Oréal, in Germany, to help optimize and orchestrate the focus on revenue uplift by focusing on eCommerce optimization through A/B testing among other initiatives.
Valtech recently did a revenue uplift analysis for the local Luxe D2C Division in Germany which identified an estimated impact in the revenue uplift range if the suggested UX initiatives were to be implemented to the best extent. The uplift value was based on the last 12 months of sales, and it could potentially drive UX changes and establish new ways of working for long-term business impact and customer journey personalization. By investing in core experiences and the customer journey in itself, companies do not have to look further ahead than what the existing data tells. Becoming data-driven and getting the most out of existing platforms can be done in many ways.
Other client cases
Among other clients are Nordic retailers, who have experienced incremental value uplift by focusing on several factors driving revenue optimization efforts and investments in platforms and capabilities to target potential sales.
Want to get started today?
The Commercial Strategy & Data Transformation team within Valtech is ready to assess the current conditions in order to identify new revenue potential. The project can often lead to:
- Strategic dialogues focused on conversion rate optimization efforts and advisory on investments considerations in platforms or capabilities
- Roadmap planning focused on Optimization
- Data tracks supporting commerce growth and a stronger digitalization footprint
