Andrew Youderian • February 4, 2013 A few posts back I highlighted and offered advice on the purchase of MyPopcornMachine.com – an online store specializing in concessions equipment. With the deal finalized I wanted to provide Andy (the new owner) guidance on next steps to maximize the store’s potential, especially given its history of sub-par customer service, declining revenues and possible SEO penalties.
Below are six suggestions to help turn the store around and restore MyPopcornMachine.com to full fledged concession-selling glory:
Tell Customers About New Ownership
The previous owner seriously dropped the ball with customer service, which almost certainly resulted in lost business and damaged trust. To help salvage what customer base is left, I’d send out an email to all customers letting them know that MyPopcornMachine.com is now under new ownership.
In the email, I’d be 100% honest and acknowledge the lapses in customer support that occurred and stress that outstanding customer support is a top priority going forward. In the email, I’d include a headshot of Andy – the new owner – as well as a graphical signature signing a pledge to superior service. If Andy can follow through with this promise, he’ll likely be able to retain some of the customers who previously had written off the company.
Upgrade Customer Support Systems
If you’re going to be boldly declaring superior service, you better be able to follow through with it! A quality help desk integration will go a long way toward ensuring that customer requests are properly addressed in a timely manner. I personally use Zendesk for the powerful customization it offers, but would also recommend something more streamlined and easier to setup like HelpScout. The platform doesn’t matter as much as getting a quality support solution in place.
I’d also make sure the phones are working flawlessly. If customers leave a message, they should be informed of what time period they can expect a reply. I’d also remove the obvious stock photo of the girl with the headset next to the 800 number as it’s a bit impersonal.
Really Understand The New Niche
The most difficult aspect of buying a niche eCommerce business isn’t the web hosting, technical aspects or financial issues – it’s having to become knowledgable about an entirely new niche and customer base. In order to craft a quality, highly-covering website Andy will need to be able to answer two questions:
#1 – Who Are The Customers?
Who is buying all this concessions equipment: Elementary schools? High schools? Traveling carnival concession stands? Horse tracks? What does the customer base look like? Understanding who his customers are any how they are using his products gives Andy the ability to best serve them. It also makes future marketing efforts much easier. By knowing exactly who his customers are, Andy will be able to identify the online communities where they hang out that will likely be the best marketing opportunities.
#2 – What Problems Do They Have?
Understanding the specific questions and problems customers have will be instrumental to Andy’s success. Otherwise, he won’t be able to address and overcome buying objections. By understanding these specific problems, he can craft a unique selling proposition(s) that helps the site stand out and win business. A few examples:
Perhaps a frequent objection faced by schools is getting approval to purchase expensive concessions equipment. If so, offering a detailed report on how concessions equipment generally pays for itself it less than three months (from the profits generated) could help earn the approval necessary and win the sale. Not only could such a report help increase sales, but it could be a potential resource that earned links on the website.
Or perhaps schools (like many government organizations) have an involved process for invoicing and paying for products – one that many vendors aren’t willing or able to accommodate. If Andy can streamline that process for them and advertise it’s something MyPopcornMachine.com specializes in, he may be able to earn a lot of extra business.
Answering These Questions
In will inevitable take time to learn the ins-and-outs of a new niche and customer base, but he can do a few things to expedite the process.
First, he should interact with customers via phone as much as possible. It’s not necessary to offer 24/7 phone support, but when trying to learn about new customers nothing beats talking with them on the phone. Secondly, Andy should use surveys to collect relevant data about customers. Options include sending out a survey to past customers and/or adding a survey to the “Order Success” page of the website. By asking questions like:
“Why did you order from us?”
“What are you using this product for?”
“What problems did you encounter buying this equipment?”
……he’ll be able to learn a tremendous amount about how to best serve his customers.
Limit the Size of the Catalog
Like I frequently mention, it’s crucial to offer high-quality information to succeed in eCommerce, especially if you’re drop shipping. But this content creation takes time and it’s impossible to do it well if you’re spread too thin.
A quick Google search shows that the MyPopcornMachine.com website has 23,000+ indexed pages! Not all of those pages are individual products (and many may be duplicates) but it does illustrate the vast quantity of items available on the site.
There are also a number of products completely unrelated to the concessions market listed for sale including pet products, golf equipment, baby carriers and drywall tools! Offering such a smorgasbord of products makes the store seem less like an authority source for concession equipment and more like a flea market.
“Would you like to order a baby carrier with your new popcorn machine?”
It’s impossible to create quality product pages and know items well when so much is being offered, especially for a one-man team / small company like Andy. Limiting the number of items for sale will help him specialize, increase the quality of product pages and really get to understand the items he’s selling.
How best to get started with this undertaking? I’d start by removing the categories that aren’t related to concessions equipment. Next, I’d start looking through the sales history to see which products sell the best. As Andy starts getting to know his customers and the niche better, he’ll further learn which items and product lines are most popular. With this knowledge, he can start parring back the items that don’t sell well and start focusing on the ones that are popular and/or make the most money.
Experiment with Pricing
From the financial report in the prior post, we learned that the drop shipping gross margins for MyPopcornMachine.com are in the 18% range. With margins in this range a small increase in pricing can have a dramatic increase on profitability.
An example: Say Andy is selling a popcorn maker for $118 that costs $100 – representing an 18% markup. Increasing the price by $10 to $128 represents a 8.5% price increase to the customer but this seemingly small change results in a massive 55% increase in Andy’s bottom-line profits!
8.5% Price Increase: From $118 to $128
55.6% Profit Increase: From $18 to $28
While orders may drop slightly due to the increased price, the massive jump in gross profit will almost certainly make up for the difference. Plus, Andy will be processing fewer orders which will cut down on his customer service costs.
It can be hard to test price increases across an entire catalog, so I’d recommend testing increased prices on the bestselling 20 or 30 items. These popular items likely make up the majority of sales and the pricing experiment will be much easier to implement. It’s important to establish a clear profitability baseline from which to start and measure the results on profitability that the pricing changes have before making any permanent decisions.
Invest in Quality Product Pages
Spending time creating high-value product pages will pay off immensely with increased sales. While some of the MyPopcornMachine.com product pages offer in-depth information, many are lacking – like the listing for the popcorn cart below:
Adding multiple close-up pictures, video, additional products specs and customer reviews would result in significantly more sales of this $300 popcorn cart.
Investing in better product pages will be instrumental to improving sales for MyPopcornMachine.com. But what exactly does a “high-value” product page look like? I could (and probably should!) write an entire post on this, but they should contain:
- Unique, original and useful copy
- Quality pictures of the product
- Information on how the product works, is operated and is maintained
- User reviews of the item
- Product weight and dimensions
- Rich media (videos, manuals, etc)
Creating quality product pages takes a lot of time and I’d prioritize my efforts by focusing on the most popular products and the products that earn the most profit. Once Andy has solid product pages for the popular items – which will result in the largest conversion boost to sales – he can move on to improve the listings for the other products in the catalog.
For some inspiration and ideas on how to create top-notch product pages, see these posts on Creating Killer Product Pages and these 10 Tips for Improving Product Listings.
What I Didn’t Mention: Marketing
As someone who is a huge proponent of the importance of eCommerce marketing, I wanted to explain why I didn’t include that in this hit list of things to address. If MyPopcornMachine.com was a brand-new store, I’d encourage Andy to slap up a simply storefront and then focus on marketing for the majority of his first six months in business. Without much traffic and before knowing your niche / customers, it doesn’t make sense to try to create the perfect site.
But MyPopcornMachine.com is generating a decent amount of traffic: approximately 16,000 visit per month. Given the site’s history of poor customer service and other issues, I think there’s much more upside to improving the experience for existing customers as opposed to trying to drive more traffic to a site that could use improvement. Only when the legacy issues are resolved does it make sense to place an emphasis on marketing and SEO.
What Do You Think?
Did I miss something major that Andy should be focusing on? Or disagree with my priorities? Let me know in the comments below!
Photo by Webgol
Post by Andrew Youderian
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