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Spend 13% To Increase Sales By 30%
With No Labor Costs!

White Paper by Michael Roebuck

Oglesby, IL - September 2006 -- Are you familiar with SLI Systems? SLI Systems offers an e-commerce site search service that is compatible with your Yahoo! Store. Here is a great explanation of the system as stolen from the SLI Web site, "Learning Search is a site search solution built on SLI Systems' patented advanced search technology. It continually "learns" from past site search activity by tracking visitors' aggregate search queries and click-thrus, and uses that data to deliver results based on popularity. Whether companies use their Web site to sell products, provide support or information, Learning Search will return the most relevant search results, which helps attract and retain customers, and ultimately increases sales. Studies show that most people search within a site, and also that they expect to find what they're looking for on the first page of results, or they'll abandon the site. Learning Search delivers the results people are looking for on the first page 95% of the time, which means more satisfied, and potentially more loyal customers." How loyal are these customers? I'm glad you asked.

Industry experts have reported that 20-40% of on-line shoppers use search to find a product. 47% of those searchers who fail to find what they are looking for in one search will leave the site. That's enough to get me thinking that we need to look at site search and how it ties into the big picture: Sales. Yahoo! can not track sales based upon who uses the Yahoo! Stores provided search option, but with SLI, I was able to capture the sales from people coming in from the search results page.

My research has shown that clients do generate revenue from search. It’s not all additional revenue, but goes to show that the search feature is important. By additional revenue, I mean revenue that you would not normally have received anyway. A customer may have found your web site through Pay Per Click or some other method, but once on your site, they used the "search" option. We replaced Yahoo's! built in option with SLI. Since the advanced search offered by SLI is a “learning search” meaning it gets smarter as more people use it, I was able to show that my client's revenue increased every month while usage remained similar. I assume as the search results became better, it was a better shopping experience for the user and therefore more sales.

Below are the results so far. Note that these numbers represent search referrals only and not entire web site sales.

Month
Searches
Orders
Revenue
Rev Per Visit
% Difference
Rev Per Order
March 4,258 272 $22,282.00 $5.23   $81.77
April 4,616 285 $24,908.00 $5.40 3% $87.40
May 4,377 303 $26,968.00 $6.16 14% $88.79
June 80 2 $218.00 $2.73 (-56%) $87.50
July 4,078 232 $21,748.00 $5.33 95% $93.54
August 4,017 311 $28,789.00 $7.17 34% $92.50

Notice the June numbers declined? That's because we took the Learning Search service offline, thinking it wasn't working. Actually, once we did this, we checked the referral URL's and realized we weren't tracking the inbound referrals correctly. Nevertheless, we rode out the month and started advanced search again promptly on July 1.

From July to August, sales increased by over $7,000 from the previous month, a 32% increase. As you can see, sales from search are increasing while the number of search queries remain fairly flat. If I can increase sales by a couple thousand dollars a month by offering visitors a better search. I'm going to do it. It’s still a test in progress, and it hasn't been running long enough for the numbers to level out but it seems to be a good way to go.

When we first signed up with SLI, sales trackable to the Yahoo! Stores provided site search was under $22,282 per month. If I can level out sales from search at the current $26,000 per month, that's a $4,000 increase for a fraction of that cost. And that Cost of Sales is well within the bounds of a profitable investment. Personally, I think we are increasing more than that when you include the lifetime value, or return rate as that must be impacted by the pleasant ordering experience. One of those unknowns at this time. Also, the initial $22,282 could only be tracked after learning search had been running for a month.

The tracking method I'm using in Yahoo! is the "Referers" in your Yahoo! Stats. This will give me the total visits, orders and sales volume. I'm really looking at the increase from one month to the next. As long at the visits stay about the same, which they have been, I can assume the increased sales are because of a happier shopping experience.

Let's look at March vs. May:
March
Searches:4,258
Orders:272
Revenue:$22,282.00
May
Searches:4,377
Orders:303
Revenue:$26,968.00
May had similar volume of search queries but 31 more orders resulting in $4,686 additional revenue. If that $4,686 was earned because of better search, those sales cost 17% (Cost of Sales). What are you currently spending to get an order? Would you be willing to spend 17% with NO Labor costs?

Now when you also factor in an unknown lifetime value rate of a new customer, that increases the revenue earned and therefore lowers cost of sales.


Let's look at current July vs. August numbers:
July
Searches:4,078
Orders:232
Revenue:$21,748.00
August
Searches:4,017
Orders:311
Revenue:$28,789.00
Again, both months had similar volume of search queries but August had 79 more orders resulting in $7,041 additional revenue. We increased sales by over $7,000 just by offering a better search experience. This represents an 11% cost of sales.


The real numbers are March vs. August:
March
Searches:4,258
Orders:272
Revenue:$22,282.00
August
Searches:4,017
Orders:311
Revenue:$28,789.00
Despite fewer search queries, August had 39 more orders resulting in $6,507 additional revenue. The numbers are compelling - a 13% cost of sales and at the same time an increase of the average order by $10?

In other words, would you spend 13% to increase sales by 30% with no regular labor costs involved? Simply set the system up and let it run. No need to update search when you update products on your web site, constantly manage positions or worry about competitors. It's all done automatically.

Obviously results will vary based upon your company and this article is NOT endorsed or paid for by SLI in any way. Although I have sent them the results.

Note we are NOT using SLI Site Champion (the natural search engine optimization service they offer). That was our reasoning for testing them in the first place, but we have not yet had satisfactory traffic from Google, Yahoo! or other web search engines from this service. When we turned off the service, we accidentally discovered the improved site-search results. Our clients currently only use SLI for site-search.

If you have a Yahoo! Store and want to integrate SLI Learning Search into your own Web site, please contact Michael Roebuck at All Web Promotion for details.

Bonus! Click to learn how to increase sales by another 300%!


Articles may be reproduced in their entirety providing below footer is included:

Michael Roebuck is General Manager of All Web Promotion, Inc.
All Web Promotion, Inc. is a full service Search Engine Optimization and Yahoo! Store Web Site Design company. You can have an e-commerce web site designed or re-built and optimized for you for much less than you think. Request a free Web Design Quote or visit our site for more of our services and free resources at http://www.allwebpromotion.com.

Additional information, resources and blog posts regarding Yahoo! Stores can be found on his personal web site located at http://www.michaelroebuck.com.

Copyright © 2006 Michael Roebuck. All Rights Reserved.

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