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Colette: We’re speaking with Dr. Ralph Wilson of wilsonweb.com about the elements you need to build a complete product line.
Colette: Dr. Wilson, just before our break we were talking about testing. I think that’s a word we can’t say enough, test, test, test, test. It’s one of the most important things in any business. Can you tell us a little bit more about how you can use testing with up-selling and cross-selling?
Dr. Wilson: Well, one thing that’s happened in the last couple of years is the emergence of the Google website optimizer tool which is free and allows you to do simple AB split testing. Split testing basically is you have one form of a webpage here and you have, that’s type A and then type B has one simple change from the other, and you test to see which produces better. So, with that Google website optimization tool you can test product pages, landing pages, all sorts of things. The difficulty for smaller businesses is if we don’t get enough traffic to those pages and enough sales from those pages, it’s difficult to get enough information to be statistically valid.
Chris: Right.
Dr. Wilson: But it’s important to be thinking in terms of which is working better. Even if you’re getting kind of anecdotal information.
Chris: Yeah. We’ve seen it Ralph, here, over the many years that we’ve had our Worldwide Brands website up, we’ve seen this. Just one or two simple words on a page can change conversion.
Dr. Wilson: Yep, the headline especially.
Chris: Yes.
Dr. Wilson: Makes a big difference, big difference.
Chris: Yeah.
Colette: One technique you had mentioned earlier about sending traffic straight to sectional pages, I’ve heard Google optimizer is a great tool in ways to do that where you’re offering all your different product bundles and different product lines, you know, up-selling and cross-selling, straight to those sectional pages.
Dr. Wilson: Yeah. I’m not sure that website optimizer is the tool that will do all that for you, but there’s a product, kind of a higher end product that Mercado puts out. They produce search systems for larger online retailers. So when someone does a product search on the particular website they come up with products, merchandise in such a way they get higher sales. But one of the things Mercado, and I’m sure some of its competitors, has built in is when someone comes to the site with a particular keyword that’s either searched on or comes from a pay per click source, when they see that word it will create a landing page designed for someone coming with that keyword, so that it will not only show the product that they think you’re looking for, but several that you might be looking for.
Chris: Right.
Dr. Wilson: It’s harder for small retailers to be able to do that, but the larger retailers will find that that kind of software will start to bring them some real benefits.
Chris: Right. And you know, the small retailers following all the advice that you’ve been talking about so far will become larger retailers and be able to use that functionality.
Dr. Wilson: Yep. Let me give you an example of up-selling that I’ve used on my wilsonweb.com site for some time. I’ve since 1997 have offered a publication called Web Marketing Today Premium.
Chris: Yes.
Dr. Wilson: And so when people are interested, because I’ve written a number of ebooks about various aspects of online marketing and sales, so they look at the ebook and then at the bottom of the page it says, you can buy this ebook for only $14.95 or whatever the price is, but for only $49.95 you can get this plus twelve other ebooks.
Chris: Right.
Dr. Wilson: Now, you say, gee, you’re giving so much away. Well, it’s true, I am, but it’s only electrons.
Chris: Yes.
Colette:/Dr. Wilson: (Laughter)
Chris: (Laughter) Right.
Dr. Wilson: And so instead of leaving my store with $14.95 sales total they leave the store with $49.95 sales total.
Chris: Right.
Dr. Wilson: And it’s not a way of deceiving people, it’s actually a way of leading them to a huge opportunity, is the way I look at it at any rate. But this idea of up-sell really increases the sales total.
Chris: I would have to agree with you when you’re talking about your website and your ebooks Ralph. You were out there when I started Worldwide Brands which was eight or nine years ago.
Dr. Wilson: Yeah.
Chris: And you were the only person that I could find at that time who was trustworthy, you know, in the market. And everything that you’ve written since then, all your materials, are fantastic and we always recommend them to people.
Dr. Wilson: Well, that’s very kind, thank you.
Chris: Well, no, I want to get that point across, because people need to understand that wilsonweb.com is a wonderful source of information. So we highly recommend that everyone check it out.
Dr. Wilson: I get upset about people that are trying to take advantage or trick or cheat some way or another to get to success. I don’t think you have to.
Chris: No. you know, but so many people tell you that you need to. You know, it’s…some people think, or most people think that you need to cheat just a little bit to really make money, but you don’t.
Dr. Wilson: I know.
Chris: You don’t. It’s just honest information, straight forward business…
Dr. Wilson: Because it creates respect and those people will be back again and again and again because they trust you.
Chris: And how many people have we seen between the two of us that have come up over the last eight or ten years, have been out there selling junk, cheating people, and they disappear within a year or two at the most.
Dr. Wilson: Yeah, yeah.
Chris: You know, they’re gone. You build a business like your business and like our business where we actually tell the truth and we do what we say we’re going to do and we’re around forever.
Dr. Wilson: Yeah.
Chris: So, let’s jump into small business. You were talking about Mercado and you mentioned the website software and so forth. Do all small business carts allow you to cross-sell and up-sell or are there limitations?
Dr. Wilson: I was looking here a few months ago at that question and what I found was nearly all the ones that try to stay up to date and improve their carts are offering cross-selling. I mean, there are a few shopping carts out there, typically some web hosting service will provide them free. Well, you know, if you want free you get free (laughter).
Chris: Right (laughter).
Colette: (Laughter)
Dr. Wilson: Typically those are ones that don’t have an economic reason to improve their software and, therefore, don’t.
Chris: Yeah.
Dr. Wilson: But the ones that you have to pay something for, typically there’s enough cash flow in those shopping cart businesses that they can hire a staff that will keep improving that product over the years. So cross-selling and related up-selling is there in nearly all the shopping cart programs whose names are well known out there. Now, some are more flexible than others. Some are more automatic than others in the way they do this. But I looked at, well, MIVA Merchant, LaGarde StoreFront, Yahoo Merchant Solutions, ShopSite Pro, Monster Commerce, osCommerce, and several knockoffs of osCommerce, and a number of the leading carts out there you can do this. Typically, what’s involved is an online store is run through a database. Now, the small stores that sell one or two products don’t worry about this, but if you’ve got 100 products you typically are doing the modifications to your store in, say, an Excel spreadsheet or an Access database and then uploading that database to your store on a regular basis so it will include the updates.
Chris: Right.
Dr. Wilson: Well, what’s involved with cross-selling is there will be a field for every product that will allow you to list similar products that you want to show up, or accessories or whatever, that you want to show up when that product is displayed in the product page. So you can associate, using that field, you can associate one product with several other products.
Chris: Yes.
Dr. Wilson: Then when you upload that file to your online store, those other products will be mentioned or shown or maybe a little thumbnail will be shown on a product page. What I’ve found is it’s not quite as typical to have the flexibility to show all this stuff in a shopping cart. Some small business online stores have that sophistication, but most don’t.
Chris: Right.
Dr. Wilson: But on the product pages it’s very common and not all that hard to do. I mean, you have to take the time, for each product, list the associated products in your database. But once that’s done, then it’s pretty straight forward.
Colette: You know, Dr. Wilson, what kind of results can a seller expect from emphasizing cross-selling and up-selling in their store?
Dr. Wilson: Well, it’s going to vary, I’m sure, from store to store. But I would think that at least 10%, maybe 20%, increase in revenue would result from using those kinds of techniques well.
Chris: That’s nothing to sneeze at.
Dr. Wilson: Well, no, it’s not. It could be more in some cases, but I think that those kinds of numbers are quite reasonable to see happening. You have to work at rolling this out through your entire store and work at it. But hey, the nice thing about cross-sell and up-sell is without increasing your marketing expense, that is, you know, pay per click ads to get people to your store, for example, you’re increasing your sales total. When you increase your sales total you increase your profits.
Chris: That’s right.
Dr. Wilson: So this is big.
Chris: Yeah, it is. It’s so important for people to understand these things. So many people, unfortunately, we see, start an online business and say, well, I tried to sell this and I can’t sell it, so online business doesn’t work, forget this.
Dr. Wilson: Yeah, I know, I’ve met those people too.
Chris: Yeah. Then you see the people who, boy we’ve met so many of them, who just build these from nothing. They start with a couple of products, a few products, and they build these phenomenally varied stores, but within the same product lines, you know?
Dr. Wilson: Yep.
Chris: Like a camping store, for example, and they just carry some unique items, some standard items, some low cost, some high cost, they’re bundling, they’re cross-selling. They just get the concept.
Dr. Wilson: Yeah. You still get these people that want to make money on the internet without any work.
Chris: Yeah, yeah.
Colette: (Laughter)
Dr. Wilson: And it doesn’t work that way.
Chris: (Laughter)
Dr. Wilson: Now, the beautiful thing about the internet is it’s a huge marketplace. It’s huge.
Chris: Yes.
Dr. Wilson: But you still have to work and work hard to stay ahead of your competitors and really offer to your customers what will motivate them and encourage them to buy and then have good quality to give them when you sell it to them.
Chris: Absolutely. What would you say criteria would be for good cross-sellers and up-sellers? We talked about considering items that don’t have good profit margins.
Dr. Wilson: I don’t quite get your question Chris.
Chris: Um, say criteria for good cross-sellers and up-sellers, for example, I mentioned loss leaders earlier on.
Dr. Wilson: Right.
Chris: What do you think about using a loss leader, for example?
Dr. Wilson: Oh, I think that’s a tremendous idea, particularly if you got a good buy on it yourself (laughter).
Colette: (Laughter)
Dr. Wilson: You don’t want to lose money.
Chris: You know what we tell people is that you can find liquidated products within your product area and if you find a liquidation on some items you can use them as a draw to bring people into your store.
Dr. Wilson: I think that’s great. And I think this is a matter of learning. I mean, we try something and we find, well, that didn’t work. So you try something else and, oh, that worked.
Chris: Right.
Dr. Wilson: And you just keep building this. One thing I want to encourage people in this new year of 2008 is stretch yourself, try something new. Experiment with some of the cross-selling, up-selling techniques that we’ve talked about. Try on a little basis and then roll it out a little bit bigger as you see it working. But stretch yourself, don’t do the same old thing you did last year.
Chris: Right, and get into testing.
Dr. Wilson: Yeah.
Chris: It all goes back to testing.
Dr. Wilson: Another one of my philosophies is every year cut off the bottom 10% of your business.
Chris: Yeah, yeah.
Dr. Wilson: So the stuff that isn’t working, just don’t offer it anymore, get rid of it. And then add the things this year that are really you see as growth items.
Chris: That’s such a good point so very simply put, that it seems like it should be obvious, but it’s not. It seems like, oh yeah, okay, sure. But it’s something that you have to actually say to realize.
Dr. Wilson: Well, we’re afraid of getting rid of things sometimes.
Chris: Yeah, yeah.
Dr. Wilson: But to succeed, we need to keep moving.
Chris: Right. And keep moving we will. That is our time today with Dr. Ralph Wilson of WilsonWeb.com. Ralph, thank you very much for being here, always a pleasure.
Dr. Wilson: Hey, God bless you and what you’re doing for folks too.
Chris: Coming up next, our Product Source of the Week segment, when Product Sourcing Radio continues. I’m Chris Malta.
Colette: And I’m Colette Marshall.
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