[Video] Site Review: Quality Inventory Provides Greater Sales than Elegant Site Design

Summary: What can we learn from VacationRentals.com, the #2 vacation rental website on the internet? Well, first, simple websites often outperform slick elegant designer websites. Second, having quality inventory is far more important than having the best looking website. Focus on beating your competition by having high quality products and services and don't worry about having the best looking website in your industry.

How can I analyze the reasons for a low conversion rate?

Sometimes in-depth research is required to generate an accurate comparison between your website and your competitors'.

Summary: The past two articles have emphasized the importance of product mix in determining website success. How can you figure out if a low conversion rate is due to a poor product mix versus a bad website? This question will be discussed in this article.

How can you identify the reason for a low conversion rate? As I mentioned in a previous article stressing the importance of analytics, you can't measure yourself against yourself. The best way to measure your success and identify methods of improvement is to benchmark your website against your competitors.

What type of benchmarking do you need to do?

Since this article is discussing website conversion rate, the answer is to compare your conversion rate to the conversion rate of your competitors. For example, do you sell Caterpillar tractors? What is your conversion rate on those tractors? What is your average competitor's conversion rate? Even better, what is your best competitor's conversion rate?

If your conversion rate on a product is 8%, is that good or bad? Well, it always depends on the average for your industry. If the average conversion rate for that product, in your industry, is 3%, then you're doing great. If the average conversion rate for that product, in your industry, is 15%, then you have some serious catching up to do.

What conclusion should the data help you reach? Here are two conclusions:

1. If your conversion rate is below the competitor average, then you probably need to improve your website.
2. If your conversion rate is low, but at or above the competitor average, then improving your website is unlikely to help generate a higher conversion rate. Perhaps you need to sell a different product. You're already at or above the industry average. Unfortunately, this product doesn't look like it sells well in general.

Unfortunately, figuring out the conversion rate for your competitors can be difficult. It may require some in-depth research. Each company will likely have to find industry specific resources in order to do their own analysis.

(Now that we are on the subject, I am interested, myself, in finding this data. I will do my best to dig around and see if there is a conversion rate research database out there. However, I doubt there is one. Nevertheless, if you are aware of one, I would appreciate your notifying me about it.)

In conclusion, make sure that you are benchmarking your conversion rate against your competitors and not against yourself. Benchmarking how you rank in your industry is the only objective way to identify whether a conversion rate is low because the product you're selling just doesn't sell well or if you have a problem with your website and marketing approach. By doing this benchmarking you allow your business to make much more intelligent decisions in product selection and web strategy.

Does website design matter? Re-emphasized lessons from The Popcorn Factory

There is nothing outstanding about The Popcorn Factory's website. The key is their product selection.

Summary: The other day I wrote an article that analyzed the key reasons for The Popcorn Factory's astounding 29.5% conversion rate in December of 2007. To translate, this conversion rate means that nearly one out of every three visitors to The Popcorn Factory's website actually bought something! Today, I want to re-emphasize those lessons in a more concise manner.

After looking at the success of The Popcorn Factory, and the relatively simple website they use to generate this success, the natural question is, "does website design really matter?" The answer is No...to an extent. How can we show this?

First, from the standpoint of aesthetic beauty, The Popcorn Factory website is not one of the more attractive websites out there. It's design is very plain, and really not very attractive compared to the really good sites. There are no pictures of beautiful people eating popcorn; there are no animated videos; the color scheme is a rather bland pastel purple, dull pink, and red.

Secondly, there are few calls to action and no empty marketing slogans like, 'Putting quality first.' or, 'Perfectly popped popcorn every time.' They do have an Easter sale currently on the website, but it doesn't scream at you with flashing lights or multiple exclamation points!!!!

Put simply, the website does exactly what its supposed to. It sells popcorn. No more. No less. And sell popcorn it does, very well in fact.

As mentioned, the key lesson from The Popcorn Factory is the importance of choosing products that are already primed for success. Don't choose a product that will require you fight an uphill battle just to get customers interested in it.

Warren Buffet has been known to say, 'Give me a great [profitable] industry and poor management any day, over great management and a poor [unprofitable] industry.' What did he mean? He meant that a profitable industry allows even the worst managers to have a measure of success. Whereas, an unprofitable industry will make even the best managers look like perennial failures.

The same applies to websites. As an owner, it is better to have a poor website selling a product everybody wants, than to have a great website selling a product nobody wants. The website selling the in-demand product will win every time.

Does this mean that anything we can say about website design then is invalid? Absolutely not. If the Popcorn Factory improved their website, no doubt they would also improve sales. Warren Buffet would not turn down great managers in a great industry. That's a one, two punch. Similarly, no company would be wise to turn down having a great website, just because they're already selling a great product.

What's the conclusion? Absolutely, review your product selection, and make sure you're selling products that the customer already needs or strongly desires. Once you've reviewed your product selection once, review it again. Keep doing it until you know your product selection is excellent. Then, once you've done this, start investing in improving your website to maximize your chance of getting the sale. Don't do this process in reverse.

Review your products, then improve your website. If you do these two things, in this order, you put yourself in position to maximize sales growth and profits.

What gave The Popcorn Factory the highest conversion rate on the internet?

The Popcorn Factory's basic homepage doesn't explain their high conversion rate.

Summary: In December of 2007 the Popcorn Factory had the highest conversion rate, 29.50%, of any major website (MarketingCharts.com, 2007). For most retail websites, a conversion rate of 10% is considered excellent. Anything below that is considered average (Eisenberg, February 3rd, 2008). What can we learn from The Popcorn Factory to help us improve our own conversion rates? In this article we will answer that question by looking at one very important reason behind their success.

No doubt there are many reasons that The Popcorn Factory has one of the highest conversion rates online. However, as I researched this article, one reason kept coming up, product selection. Not all products sell well online (Warren, 2000). The Popcorn Factory has done a good job of identifying what sells well online and investing their resources in those products. They have done this in the following ways:

1. The Popcorn Factory sells a product the customer already wants to buy.
2. Their online product mix is specific to online tastes and is different than their offline product mix.
3. Their products are well suited to being delivered by mail.

Let’s discuss each of these points one by one.

The Popcorn Factory sells a product the customer already wants to buy. If you manufacture a product, improving on this point may be difficult for you. However, if you are an online retailer retailing other vendor’s wares, then this is entirely within your control. The simplest way to increase your conversion rate online is to start with great products. This quote bears that out:

“People's motivations trump any great or poor [website] design. If people have made up their mind (persuaded themselves), that they want to buy flowers or popcorn from the particular retailer then they'll work through almost any poor shopping process…” (Eisenberg, January 29th, 2008)

How can you improve your product mix? Put extra effort into the product selection process. Read product reviews, see what people are talking about. Are there any trends you can take advantage of? Product strategy is not my area of expertise. Nevertheless, the key point I want you to take from this article is that bad product selection will trump good website design. So don’t invest more money in improving your website or increasing your online marketing if you don’t already have products that the customer desires. After all, we can put lipstick on a pig, but it’s still a pig. A better website might just end up being a better color of lipstick for a litter of ugly piglet products.

That brings us to the next point.

The Popcorn Factory’s online product mix is specific to online tastes. The Popcorn Factory has a print catalog as well as their website. Cheryl Zatz (the Vice President of Marketing for The Popcorn Factory as of at least October 2006) made clear in a ComputerWorld.com case study that, “the Web site doesn't simply replicate the paper catalogue: the number of products is limited, to avoid creating navigation problems for users, but the site does include a number of exclusive lines.” (Warren, 2000)

If you already sell products offline, moving online may not be as simple as putting pictures of your products on your website. Here the Popcorn Factory specifically faced a navigation issue. They didn’t want to overwhelm users. Nevertheless, not all products are tailored to the online world. For example, a clothing store that sells suits and dress shoes will probably find dress shoes are far easier to sell online than suits. Clothing that needs to be tried on first may be harder to sell than shoes that have fairly universal sizes. Such differences may affect policies such as return policies. Return policies online may have to be different than the return policy you’ve used successfully in the past.

These are just some of the things to think about. There are probably dozens of factors I could list. However, hopefully you see the point. When you decide to go online make sure you think through how the customer’s preferences are different online than when he is buying from you in your store or even over the phone. Your online policies, prices, product descriptions, may need to be different.

This brings us to our last point.

The Popcorn Factory's products are well suited to being delivered by mail. The Popcorn Factory started as a mail-order business, so their products are already nicely suited to being delivered through mail. What does this mean for those of us who don’t have mail-order businesses to learn from? We can take a look at the products we’re trying to sell online and make sure they really fit the online purchasing model. For example, the majority of cars will probably always be purchased locally. The internet is a powerful marketing tool for cars, but most customers want to test drive the car they ultimately buy. On the other hand, tin cans of popcorn are very easy to sell online. The cost is low; if you don’t like the popcorn, you’re not out a lot of money. Popcorn is a pretty standard product that is hard to mess up, so there isn’t much fear of completely botched service.

Thus, it is wise to ask yourself the following questions: Do customers understand your product well enough that they would feel comfortable buying it online? Is your product’s value proposition only convincing when seen in person? All of these factors will affect your conversion rate. Again, these factors are far more important than the overall look and feel of your website.

In conclusion, product selection on your website is going to have a larger impact on your conversion rate, than even the best website design can have. The Popcorn Factory achieves a high conversion rate, not because of outstanding website design, but because of outstanding products. Focus intensely at improving the product selection on your website and you will naturally see an improved conversion rate.

References:
MarketingCharts.com. 2007. “Top 10 Online Retailers by Conversion Rate - December 2007”
Eisenberg, Bryan. January 29th, 2008. “Top 10 Online Retailers by Conversion Rate: 12/2007”
Esenberg, Bryan. February 3rd, 2008. “Top 10 Online Retailers by Conversion Rate: An Analysis”
Warren, Liz. May 18, 2000. “Positive approach to e-business will pay dividends for SMEs”

Question from Readers: Is it enough for a discounter to show the discount off list?

Currently JewelryAndWatches shows the discount off list on their website, but this isn't enough.

After viewing the video: Site Review: Online Bargain Hunting Website, a viewer sent this comment. The viewer made a good point which merits a response.

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Just out of curiosity did you click on any of the products on that website home page? If you had you would have seen that it is shown what the list price is and his sale price like the Cartier womans watch you pointed out in the video

"The #1 challenge for an online discounter is to prove that you truly provide a meaningful discount." - Ayo

List Price : $3,650.00

Our Price : $2,910.00

$740 dollars is a meaningful discount

If someone is shopping for a high end product like a watch such as Cartier they would already know what a good deal is since shopping for a watch of such a name is not an impulse purchase, like a $30 DVD player from walmart would be.

- DG

[Ayo's Response]

Hi DG,

Thanks for the feedback! Those are good points.

I did see that JewelryandWatches.org shows the list price on the product page. Unfortunately, to keep the video short, I wasn't able to talk about everything I looked at before recording it.

However, though the discount, I still felt JewelryandWatches.org should provide a more explicit comparison.

Here is my concern. As of today (March 7, 2008), if you search for "Cartier Women's Pink Santos Demoiselle Watch" in Google you basically find that all online vendors sell this same watch for the same price, $2,910.

Since there is no easily accessible online evidence that this watch is being sold for more than $2,910 online. JewelryandWatches.org can seize the moment, by telling us who exactly is selling this watch for more than $2,910. This will clear some of the customer's skepticism.

For example, if JaW (JewelryandWatches.org) could link us to the Cartier website and show the page on which Cartier shows the list price for this watch, that would be much more convincing.

The problem with list price, is that many list prices are artificially high. Many products are never really sold at list price. So in the customer's mind, selling a product below list price is no longer considered a discount.

For example, when a car dealership shows the list price (MSRP) on a car, let's say $25,000 and then shows the dealership price...say $23,000. How many of us really take the dealership discount at face value? Is the discount on list meaningful? Or is the customer more interested in the discount versus other dealerships? If all dealerships in the country are selling the car for $23,000, then this price is no longer perceived to be a discount.

Unfortunately, industries are so competitive, that we have come to expect real product prices to be below list prices. Thus, to the consumer a real discount is, not the discount from list, it is the discount below his other options.

If no other company on the web sells this watch for a higher price then $2,910 ceases to be perceived as a discount. Thus, JaW can benefit by telling the customer who exactly is more expensive than JaW's price. It's okay if that discount is versus a brick and mortar, JaW should just tell the consumer that. More information is better than less information.

Nevertheless, as I mention on my website the day after creating this review. If it is not possible for a company to provide a discount, it may be better to advertise another differentiator. For example, JaW's could say, "We've scoured Amazon and found the best deals on Amazon for you." Or JaW could say, "We provide a wealth of knowledge on Jewelry and Watches." The point is that, somehow, JaW needs to get the customer to buy on their website, and whatever their selling point is, they need to really convince the customer that it is a real selling point.

Again, thanks for that feedback! I'm providing only one perspective. It's definitely not the only perspective.

Best,
Ayo

[Video] Site Review: Online Bargain Hunting Website

Summary: A good homepage is one that gets straight to the point. In today's review of DealJuggler.com, we see a website that does this well. This is probably why DealJuggler.com is a consistent money maker. However, as with any website, DealJuggler.com can make improvements. Most importantly, the quality of some images on this website is poor. Poor quality images immediately make your website look amateurish. By improving this aspect of DealJuggler.com the website would look that much more professional. However, changes like this won't drastically change DealJuggler.com's earnings. This is a good website, without too many bad points. The best way for this website to grow sales is to keep finding shopping bargains. Watch the video to see the entire review.

[Video] Site Review: Family Discount Shopping Website

Summary: Today we review, Frugal Parents Online, a website that helps parents save money online by offering shopping tips. This website does a good job of using pictures to set the right tone. For a small mom-and-pop website like this, the About us is effective. It is written in the form of a letter to the reader. However, Google advertisements play too dominate a role on the homepage. It hides the quality content the owner has made available to readers. We have to always be careful not to focus so much on the revenue driving potential of our website that we obscure the focus of the website, which is to help others.

[Video] Site Review: Music Instruments Website

Summary: Today I review a music instruments website. This website does an excellent job of providing visitors with articles, encyclopedia links, pictures and more about hundreds of instruments around the world. By educating customers, this website will satisfy visitors and get more Google search visitors. However, the site lacks a method for speaking directly to the customer, like I am with this blog. Blogs give a visitor incentive to come back to your website for further education. Watch the video to see the full review.