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25 June 2010, 07:27
Small Changes Will Equal Big Profits by M. Glanfield
How Small Changes Will Equal Big Profits
One Small Idea = 14% Increase in Revenue
Sometimes you come across one small idea that doesn’t take too much to implement but that makes a huge change.
I came across one of those last March (2010), and it immediately started making a huge difference in my revenue.
Whenever I make changes I’m happy enough to see a 1-5% increase in sales, but in this case I added close to 14% (13.7% to be exact) to my monthly revenue.
So what was the change?
Having a Daily Deal
Now, this wasn’t my idea. I don’t really care that is wasn’t as I don’t usually have unique ideas.
I got this idea from a friend of mine who runs a quilting website over at The Missouri Star Quilt Shop (yes, that’s right, quilting).
I saw that they were running a Daily Deal – basically one item would go on sale for a ridiculous amount for one day, and a new item would come up every day.
They even used a lot of their home page real estate to advertise I added the red arrow, so don’t think they did something that ugly on that pretty a site…
The owner of the store told me that people loved the Daily Deal, and even if they didn’t buy right away it kept them coming back every day to see what was the current deal.
And hey, if people keep coming back, they are MUCH more likely to purchase.
So I thought, “Hey, if he can do it, so can I!”
So here is what I did:
1. I decided that whatever the deal was I would not lose money on it, so the discount depended on my margins.
Basically I could do between 35% to 70% off depending on the items, and still make money. That way if people only buy the Daily Deal I still make money, although not as much as a normal purchase.
2. Since I’m inherently lazy, I even wrote a little program that would pick a new deal every day.
You don’t have to do this. It really is only about 10 minutes of work per day. Easily outsourced, or easily done if you are a one-person operation.
3. I created a “Daily Deal” newsletter, where people could sign up to get an email every day for the Daily Deal.
I made it crystal clear that they would get an email every day, so nobody has complained (yet).
4. I also have a little ad space on the side of my store and main pages that show the current daily deal.
Ok, so it isn’t that exciting, but it was sure worth a try.
13.7% increase in revenues…
So I checked back on it after a month and was completely surprised to see a HUGE spike in revenue.
(And yes, 13.7% increase is huge for an e-commerce site)
I was quite happy with it, and so refined it and continued.
It has already accounted for over $20,000 extra in revenue, just in the past few months, so I’m quite happy about it.
An important note…
Now, I know some of you will say “But that’s just revenue, not profits” and you’re right, it’s not a 13.7% increase in profits.
But keep the following points in mind
1. It’s an increase in revenue, not replacing what people would have bought.
2. I NEVER lose money on the Daily Deal, I only make money.
3. It’s much easier to get somebody to buy AGAIN that it is to get them to buy the first time, so this gets me more customers.
4. I’ve seen people talk about the Daily Deal on my forums and elsewhere, so it gets me free traffic and publicity.
5. All of the above reasons are awesome, especially for a change that took me one day to make.
I just emailed the owner of the quilting store to see if he has any other ideas, because hey, if it works half as well as this one, I’ll be one happy e-commerce site owner.
Enjoy!
From Matthew Glanfield blog to you
Margarita Nomeikiene
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