How to improve your ROI — ways that never crossed your mind
When your company’s success is at stake, all you can think about is conversion. Without it, you can just pack up everything, because what is the point of running your own business when it is not profitable?
So ultimately, you try to measure it, monitor any changes and compare against the competition to raise it to the next level. However, it is worth looking at this matter from another point of view. Your bank balance not only indicates how much you earn, but also how much you can shell out.
In pursuit of boosting conversion rates by optimising a shopping cart or increasing paid advertising and re-marketing, we can sometimes forget about things in the background like the day-to-day operating costs, which have a significant influence on a business’s profitability. It is also relevant how the process of procurement services, consumer complaints and logistics are processed, because it all has a huge impact on the customer experience.
Optimising the e-commerce process is certainly not something to ignore. The process is automated and systems handling the business side are integrated, the majority of businesses are noticing big improvements in this area. However, the most concerning thing is the absolute lack of measurable parameters, which do influence a business’s ROI.
Imagine a store without analytics
You can ask yourself a question: Is an online store possible without analytics? Yes, but does it make sense in business terms? Not really.
We measure appointments, analyse user’s behaviour, monitor conversions and abandoned carts, along with dozens of other trackable components. Sadly, many businessmen fail to bear in mind another important part of their businesses — internal processes.
Do you know how long it takes to handle an order (accept it, forward it to the warehouse, assemble it, print out the invoices and receipts, package it, expedite it, dispatch to courier)? How many orders are fulfilled on time and how many of them are overdue? How many employees are concerned in handling one single order, any complaints or issuing refunds and how long does all this take? How many e-mails, chats or phone calls are dealt with by the store every day? How many of them are handled by one employee and how much time is spent dealing with them? These kind of questions, are endless…
Unfortunately, without measurable parameters, it is difficult to observe which fields must be optimised or require immediate attention. In a simple example to confirm this, How often have you noticed the clerk in the store explaining to the customers that they can pack their purchase in a fancy box with a bow on it? If you’ve never experienced it, you probably wouldn’t see the point to add such information to a product’s card.
If you monitor the analytics, you can easily spot the significant changes in movement or conversions, analyse the reasons and properly react. In the case of interoffice processes, usually you do not have such tools available and you can only base your findings on your feelings, (“maybe people who handle phone calls or chats are not suitable for such tasks?”) or you just wait for major failure i.e. escalating grievances connected with lengthy waiting times to receive an answer.
“If you do not know what to measure, for a start you can measure anything — it is better than doing nothing at all”
Defining key performance indicators for interoffice processes should be equally relevant as the installation of statistics for a newly opened store, and usually does not require a lot of effort or financial expense. Store, accounting and storage software frequently provides enough data to measure at least part of a predicted KPI (i.e. order-cycle time). Do not be discouraged if you are not able to analyse everything, the most important thing is simply to start. In accordance with Lean Management’s philosophy you must constantly monitor all the processes and think about what to improve in the future. If you fail to do that, how do you measure efficiency of implemented changes?
Experience shows that it is common even in large companies, that pursued and evaluated changes are based on intuition and experience. So how can we reliably evaluate the effectiveness of implementation (e.g. systems handling complaints) if we are unaware how much time it takes to handle a single complaint before and after the implementation? If an online store requires periodical utility tests, A/B tests or sales funnel analysis, the same concerns apply to the interoffice process. We need measurements which show us the results before and after evaluation.
“Effective internal processes equal better customer service, which leads directly to conversion.”
