Jon MacDonald, Founder and President of The Good appeared on the eCom Ops podcast to share key insights on eCommerce growth, the tools he uses for optimising his conversion rate and his thoughts on how discounts affect an eCom store. Check out all the other episodes of eCommerce Operationshere.
You can learn more about Jon and The Good here:
Journey into eCommerce and conversion optimisation
Jon initially worked with Adobe Flash animation technology back when it was a popular tool. Due to this interest in eCommerce, Jon started his own company, The Good. These were the early days of eCommerce, and the company began working with brands such as Nike from the start.
In the early days, The Good offered three months of optimisation for every platform they built for their clients. One reason for this was that Jon wanted to give his team some time to fine-tune the site and improve. The other reason was for clients to get a good experience, and to build a good relationship by offering them support and improving on the website they had created.
After a few years passed, Jon took feedback from his clients about why they chose The Good and they all had the same answer: the three months of optimisation offered after the website was built made them choose The Good over any other company. Jon realised that more than the site building, it was the optimisation that clients valued most. So he decided to focus only on that, especially as it was not a service being offered by others. Currently, the company has been focusing on only optimisation for nine years. They have worked with companies like Nike, Adidas, Xerox, The Economist etc.
What are the clients like and what shopping system do they use?
Usually, the clients they have are those that are over 5 million in revenue annually. Most are in their second stage of growth, where they want to expand. What is essential for Jon is that they should have a good number of visitors. This is so the AB or multivariate testing being done by their company has enough traffic for the data can be complied and considered statistically significant.
In terms of platforms, a majority of customers use Shopify, especially those that have launched over the past few years. Second to that is BigCommerce. Jon has noticed WooCommerce also being used for smaller shops.
A typical test case setup at The Good
They always start with tracking every click and movement of visitors to the site, so they get heat maps, scroll maps and click maps to see how people are engaging with the content on the site. For Jon, just analyzing this data is not enough, though. They also take a qualitative look at how visitors to the site react.
For this, they carry out user testing, by sending users to the sites, with profiles that match those of an ideal customer profile for an eCommerce site. They ask the users to complete some simple tasks on the website and to tell them out loud what they think as they complete these tasks. This way, they get the analytical data but also have an idea of how customers would feel about the site when they visit it and why they take certain decisions such as making purchases or leaving.
After gathering all this data, the team comes up with testing plans and roadmaps. They also take into account the complaints from consumers they receive while conducting their research. Jon says that for an effective and pleasant experience for a customer, it’s essential to take a step back. An eCommerce site owner knows their products and site very well, so they find it easy to use. But for a new customer who visits the store for the first time, everything is new. They may have issues which an eCom operator has not considered. That’s why a fresh perspective by someone from the outside is a good idea.
Tools for conversion rate optimisation
There are many tools available that can work on platforms like Shopify. One that Jon and his team use are Optimizely. However, it is expensive, so it doesn’t suit everyone. A more accessible option is Google Website Optimizer. These tools help to modify the code of the website before it is rendered back, so they allow multiple tests to be done on one site, making it easier for Jon and his team to collect data.
What separates the winners from the losers?
Empathy for the customer using the website is number one. Companies who empathize with customers always perform much better. Another winning trait in eCommerce is to make use of data. Tracking customer activity and analysing it is a great tool to have a better site.
One thing Jon advises against is copying a competitors’ website. In his experience, some companies just copy a famous brand’s website because it looks aesthetically pleasing, but they don’t gain any sales from it. This is because there are too many unknown variables. The company they are copying might have lousy conversion rates, or the outlook of the website might just be a testing phase. What works for one brand may not work for another. The best way to succeed is to focus on your consumers and be guided by what they respond well to.
What are the uses of conversion rate optimization for eCommerce operations?
The process of optimising the conversion rate affects many metrics that eCom operators would be interested in. As the name suggests, conversion rates are improved. In addition to that, average lifetime customer value and average order value see an improvement as well. Another positive aspect is that optimisation lets the operators see what happens post-purchase and how the overall communication is with customers.
The data provided by conversion rate optimisation helps to guide order fulfilments as well. In Jon’s experience, websites that offer free shipping and fast shipping do much better, especially as customers tend to compare them with the biggest brands like Amazon. So optimisation can affect the operations side of an eCommerce site too, which is why Jon recommends all eCom operators to pay attention to this facet as well.
What does Jon think about discounts and their affects on a web store?
Jon is against using discounts on products as a tactic to win customers. Many brand try to use these as an incentive for visitors to make purchases, but Jon says it has adverse effects in the long run. The new customer will always expect a discount and will not want to pay full price. They will also think of the product as less worthy. Another issue, from an optimisation point of view, is that the data becomes very difficult to use because the same customer might start using different email addresses or incognito browsers to gain the discount offered to new customers. So there is no check on the lifetime value of a customer. Discounts end up being a drain on the margins of the seller unless a considerable volume of products is sold.
A better option to entice customers is to use offers, like offering free shipping or giving a small gift with purchases etc. The customer feels this is an added gift or add-on and will appreciate it but won’t expect it to happen every time.
The role of automation in eCom
Jon sees it as inevitable and feels that AI might be the way forward. He envisions an AI that would be able to pick up points on the website that need optimisation and improvement. In fact, some level of automation is already being used when multiple tests are done, as they have formulas that point out which version of the variant shows more efficiency.
Another type of automation that helps with optimisation are heat maps that work through computer models. These are very useful for small sites that don’t get a lot of traffic. Usually, for sites with a small number of visitors, a standard tool like Hotjar takes a long time to build a heat map.
Jon’s biggest influence: