# The 10% Strategy: Growing Your Business by Making Small Incremental Changes

The 10% strategy is all about growing your ecommerce business by making small incremental changes. As you know, marketing is part big ideas and part process. As an entrepreneur you have the ideas, so I'm going to help you with the process part. In this article I'm going to show you how a small increase in key business metrics has the potential to create a huge impact in net profits.

## Case Study

Theresa has an ecommerce designer shirt company and last year her marketing generated 10,000 new business leads. She converted 10% of these (1,000) into paying customers. Theresa sells shirts through subscriptions and on average, each customer spent a total of \$1,000 on ten shirts over the course of the year. Last year her business turned over \$100,000 and with a profit margin of 30%, her net profit was \$30,000..

This year, Theresa is following the ’10% strategy.’ She's going to increase each of the following all by just 10%:

• Volume of leads
• Conversion of leads to sales
• Average order value
• Profit margin

The cumulative effect of this strategy on her net profit is where it gets really exciting. A 10% increase on the volume of leads means she will generate 11,000 new business leads this year, a 10% increase on her conversion rate means she needs to convert 11% of these into paying customers, which results in 1,210 customers. She then needs to increase their average spend by 10%, so each customer needs to spend around \$110 a year. A 10% increase on the number of purchases customers make each year, means they need to buy 11 times.

###### 1,210 customers x \$110 (average spend) x 11 (no of purchases / yr) = \$1,464,100

If she successfully increases her profit margin by 10%, raising it to 33%, her net profit will be \$483,153, which is a 61% increase on last year. Wow. The cumulative effect of each 10% increment is dramatic. This is a very powerful and effective strategy for any business. Note that I have deliberately kept this example simple and focused on new customers only to demonstrate a point. Theresa’s business will also make money from repeat purchase from existing customers over the course of this year, but what I want you to focus on are the strategies that you can put in place to move the dial on each of these critical metrics.

To illustrate how the 10% strategy can work for you, I'm going to show you 12 different strategies to implement with your online business. We're going to start with increasing your volume of leads. Let’s dive in.

## 3 Strategies to Increase Volume of Leads

### 1) Write Guest Blogs

Guest blogs on high traffic sites in your niche are one of the most effective ways to drive qualified traffic to your ecommerce store. Not only are they great traffic drivers, but they simultaneously position you as an authority in your niche and raise brand awareness with your target audience. Theyr'e also great for SEO since they link back to your site in a byline at the end of your article. Be sure to link to some of the best content on your website within your post and position an opt-in form at the bottom of it. Engaged readers will click on your references and sign-up if they enjoy what they read.

There are a number of tools available to help you to identify relevant blogs.

• www.invesp.com/blog-rank - A blog ranking directory; search by category using keywords.
• www.alltop.com - Guy Kawasaki’s news aggregator site that covers a diverse range of niches and highlights the top sites and blogs in each.
• Technorati.com - Reviews the top 100 blogs in the world as well as within different niches.
• Alexa.com - Look for top sites by country and by category, though oddly not combined. You can also research a site’s traffic and audience profile by entering the web address.
• MyBlogGuest.com - A forum community where bloggers give info about their blogs and then ask for guest posts from other users. Use this in conjunction with Alexa to ensure sites are high traffic.
• Blog rolls - Review the blogrolls on popular blogs in your niche. This is often overlooked, but can be a great way to find blogs to guest post on as authority bloggers normally list other authority bloggers in their blogroll.

Once you have your shortlist don’t just launch straight in and ask to write a guest post, remember you want to create a relationship first. Read their blog and understand their tone of voice and the type of content that works for their readers. Start commenting and share their content. Dedicate time to this, so that they notice you. After a few weeks, be proactive and suggest an irresistible blog post that their readers will love. It has to be original and ideally spark a debate. If you do this well, a guest post can be a great source of new business leads.

### 2) Create Juicy Hooks

Most ecommerce stores have a sign-up form, but how many have effective forms? One of the biggest reasons for poorly converting sign-up forms is that the hook isn’t juicy enough. Are you offering something genuinely unique and valuable in exchange for a prospect’s details? A recent study by the Digital Marketing Association confirmed that the main reason people sign-up to company emails is to get offers (61%) and discounts (59%), yet few companies make this really clear on their sign-up forms. Why not spell out that they will be the first to hear about discounts and deals as it is an effective hook. If you run a business to business company, then digital content such as free reports, white papers or video series can be enticing, so long as they solve a genuine problem for your prospects.

The location of your sign-up forms is also really important and it is well worth experimenting with multiple locations across your site - at the top of content, at the bottom, in a side box. It’s a sad realisation, but it’s rare for prospects to just land on your site and sign-up immediately, so make sure your sign-up form isn’t confined to the home page. To increase the volume of sign-ups, make it easy; don’t request too much information. Email and first name, so that you can personalise emails are enough. You can get additional information for better segmentation later, at this stage, you just want to get them into the top of your marketing funnel. If you already have a large number subscribers, then add the number to your form as social proof is an effective convertor.

Unfortunately, there is no one-size-fits-all approach for creating the most effective sign-up forms. So test and evaluate through continual split testing. Change copy, the incentive, call to action, colours of buttons and track the volume of sign-ups as a result. Make sure that you only change one element at a time so that you know exactly what drives an increase or decrease.

### 3) Consider Retargeting

Whilst site retargeting campaigns are very effective at bringing lost prospects or customers back to your site, search re-targeting is an effective prospecting tool. It identifies people that have searched on keywords that matter to you and haven’t yet been to your site and shows them display ads. It’s a much more effective and efficient way to buy media than buying based on consumer demographics and hoping to get noticed, as you are reaching active buyers.

## 3 Strategies to Increase Conversions

Getting prospects to your ecommerce store is only half the battle and arguably the easy bit. The bigger challenge is turning browsers into buyers. Following are a few tried and tested ways to increase site conversions.

### 1) Show Social Proof

Social proof helps us to make decisions more easily. Whilst we are all more than capable of making our own decisions, knowing what other people have done acts like a mental shortcut. You might have heard of the experiment conducted by Milgram, Bickman and Berkowitz in New York that proved that four or more people standing on the pavement looking up at the sky will make 80% of people walking past look up too.

However, if only one or two people are looking up, it’s insignificant and others do not follow suit. Does this mean than deep down are we all sheep? I don’t think that is necessarily the case, as it doesn’t work in all situations. If ten people randomly jumped off a cliff without a parachute, would you? Unlikely. But, if it’s a low risk option like staring up at the sky, or if you are sitting on the fence about a purchase, other people’s behavior can persuade you to take action. Just take a look at this video:

The “crazy, weird, lone dancer” becomes the starter of a movement that everyone wants to be a part of. Same guy, same dancing, nothing changed, aside from other people’s behavior. When making any decision, most people want to mitigate the chances of making a bad one and if lots of other people are doing x, y or z then it must be ok. That said, all social proof is not created equal; taking the same action is contingent on two key factors:

1. The number of people who have already done the same thing.
2. The similarity between you and those people.

If you want to convert prospects to buyers then making them feel that people just like them have already bought what they are looking at can tip the decision. Start by identifying the critical decision making moments in a customer’s conversion journey, as at these points social proof is the most persuasive. Consider adding to your site online ratings, testimonials and stats showing the number of people who have already bought or signed up. Travel companies take this to another, more pressured level, showing people “currently viewing” and the number of “available vacancies”, that ticks down as you deliberate. Then, suddenly you see a pop up that tells you the number of people who “just bought,” yikes, fear of missing out kicks in for many and tips the conversion. Think about your product pages, what could you add to help consumers to make that buying decision?

### 2) Use Video to Convert Customers

One of the great challenges of ecommerce is that you can’t touch and feel a product before you make a purchase. This makes it difficult to convey the full potential of a product or service with a two dimensional photo and some copy. Using videos to showcase your products is a good substitute and one that improves conversions and reduces returns.

Instructional videos bring your products and services to life; they can create wow factor and educate your consumers about multiple features and benefits that are difficult to convey in copy. Online fashion retailers are dramatically increasing sales through videos of models simply turning around to show how the outfit looks from all angles, or putting a hand bag on their shoulders, so the more spatially challenged (myself included) can see it in context and more accurately judge its size.

Zappo’s have a different approach and use their own staff to demonstrate their products believing it delivers a more relatable video than a model on a catwalk and feels more like a recommendation from a friend than a sales video. When creating a video for your site make sure that it answers all the questions that a buyer might have and allows them to see the product in action.

### 3) Ramp Up Email Marketing

There is a lot more to email marketing than weekly emails. The more targeted and strategic you become, the greater your conversions. We all hate an abandoned shopping cart, but what are you doing to reverse this trend? As an ecommerce business, you have a lot of data about your customers and you can leverage this to your advantage.

It’s well worth creating triggered remarketing emails that list the products they left behind. Research has shown that the speed of delivery of these emails is critical; triggering an email sequence as soon as a cart is abandoned delivers greater conversions.

A series of three emails is proven to be the most effective, one sent immediately, another 24 hours later and another one week later. Test and trial the timing and messaging for your niche. Whilst price is often an issue for cart abandonment don’t offer a discount at the outset, as you risk associating an abandoned cart with a discount and you can usually win back customers without this. If by the third email they have not converted then consider an offer. Keep this series of emails focused and practical, make sure they are clearly branded, list the products left behind and contain a link back to the shopping cart to complete the purchase.

## 3 Strategies to Increase Average Order Value

### 1) Practice Psychological Pricing

An insight into consumer psychology can lead to customers increasing their average spend. Introducing a much higher price point can lead to people spending more money with you, even if they don’t buy the most expensive option. This sounds counterintuitive, but it works. Try putting an expensive premium product next to a less expensive item. The pricier item will make the other product look like a better deal and will increase your chances of making a sale.

### 2) Show Related Products

Suggesting relevant, related products to a customer is a great way to drive up order value. It’s the online equivalent of the classic McDonald’s up-sell: “Would you like fries with that?” and Amazon excels at this style of promotion. When buying anything, from a CD to a cuddly toy, Amazon lets you know that ‘people who bought this, also bought this’ and suggests two or three additional products. It’s incredibly successful and at times you’re even grateful to Amazon for reminding you to buy that extra lead with your camera, as you didn’t realise that it came without it.

This strategy manipulates people to spend more and leave even more satisfied with their service. Genius. What can you offer as a cross-sell at the point of purchase? Ensure it is relevant and adds genuine value. Suggesting batteries after selling electronics, or a memory card after a customer adds a digital camera to their cart are great examples. It is also advisable to offer discounts based on bundled purchases to further encourage take up. As always, ensure you track and monitor the impact of your cross-sells, week in, week out. If take up is low, then reconsider the products on offer.

### 3) Offer Multi-buy Promotions

Offering discounts for multiple purchases made at once can be an effective way to increase the amount people spend, but you need to find the sweet spot for your industry. Volume discounts, such as ‘buy one get one free’ and ‘three for two’ deals are typical retail promotions. Test and compare this style of promotion with percentage discounts for multiple purchases, these are often the exact same deals, just expressed differently and generate a different success rate as a result. You need to analyse the numbers and then start experimenting and tracking all the results.

## 3 Strategies to Increase Purchase Frequency

First you need to be able to identify the average frequency of purchase of your customer base. To do this, total all your transactions over a twelve month period (or shorter if you do not have a year’s worth of data) and divide them by the number of unique customers you had in the same period. This is a basic way to calculate your average purchase frequency.

### 1) Frequent Communication

One of the best ways to increase a customer’s frequency of purchase is actually one of the easiest. Frequent communication. Just because someone has bought from you once or twice is no guarantee that that they will buy from you again. You need to build a relationship and show that you care through regular communication that helps you to stay top of mind. Use email to tell your customers about other products and services they might not know about, send targeted emails offering related purchase ideas based on their previous buys. Create a regular calendar for your email marketing and stick to it.

### 2) Create Special Offers

The most successful special offers tend to be those that create scarcity through limited availability. This can mean a limited time frame, such as ‘today only’, or limited volume, ‘just one hundred available’. It’s vital you stick to your claims though, or you lose credibility. There are so many ways to create a special offer, they can be for everyone; seasonal sales, introductory offers for new products, or targeted; birthday offers, 100th, 1,000th customer etc. You could also offer a promotion immediately after the point of purchase that discounts their next buy, available for a limited time only. As with all of these special offers, send reminder emails before they expire and track and evaluate uptake so that you identify and re-run only the most successful offers.

### 3) Loyalty Programs

Loyalty programs are a great way to drive up frequency, as customers are rewarded for every purchase that they make. As points accrue, they get closer to the rewards and they become more likely to choose your brand over the competition. A study into the psychology of loyalty programs was conducted by Rajesh Bagchi and Xingbo Li in a paper for the February, 2011 issue of the Journal of Consumer Research. They identified that if consumers were given a high number of points for each purchase (10 points / \$1 versus 1 point / \$1)  they were more excited by the offering and more likely to tell other people about it, even when the amount they needed to spend to get a prize was exactly the same. That said, the quality and desirability of the rewards on offer determine the success of a loyalty scheme, but it is still worth bearing this in mind.

Punch Tab offers an online loyalty program around social sharing that rewards people for sharing content on a daily basis. It’s a great way to build loyalty and awareness of your website or blog. When readers land on your site, a small pop up window alerts them that they can earn points for visiting and sharing your content if they sign up. Points mean prizes and you can set up a reward scheme to let people win anything, from your products and services to Amazon vouchers, in exchange for liking and tweeting your content. In addition to the on-going loyalty programmes, you can also set up one-off giveaways to drive a fast response. You can also check out Incentify.

## 3 Strategies to Increase Profits

### 1) Reverse Defection

Most business owners know exactly how many new customers they win month in, month out, but fail to track how many they lose. To do this you need to agree on the definition of a lapsed customer and this depends on the nature of your business. Start by identifying the average buying cycles for each of your customer segments and decide on the time period that indicates that they are now a lapsed customer; this could be three, six or twelve months depending on the nature of your business.

Once you have identified a group of lapsed customers create an irresistible offer to bring them back to the fold. If the average customer spend is \$40, offer a voucher for \$30, chances are they will spend more than \$40 thanks to the free money, but what’s more important is that you are recreating the habit that they spend with you.

A nutritionist I advise offered a free consultation to her lapsed clients, the majority of them took it up and over 50% turned into paying clients again. A landscape gardener client offered a free lawn mowing service to his largest lapsed clients, it got him back on their radar and gave him the perfect opportunity to suggest additional jobs. Other clients have sent gifts that surprised and delighted their former customers and importantly reminded them that they existed. Consider the same for your lapsed customers, as chances are they have forgotten about you as time has gone by.

### 2) Leverage Technology

Can you increase the profitability of your team by leveraging technology to reduce admin tasks? Analyse how much time is spent on non strategic admin tasks over the course of a week. What tools could you use to make better use of time?

I often find that small business owners spend a lot of time looking for the right logos, images, videos, or latest marketing copy that is often found on desktops and USB sticks!

If your team are guilty of this, then consider a digital asset management solution that houses all of your brand assets in one place and saves heaps of wasted hours spent searching. It will significantly improve your efficiencies and importantly ensures consistent delivery across multiple digital channels. There are numerous solutions on the market for all budgets, just google “digital asset management solutions” and select the one that works for your budget.

### 3) Know Your Numbers

If you are not monitoring the numbers of your business, you are not managing them. Too many small business owners leave their accountant to look after the financial side of their business. This is a dangerous game and one that can create a big headache at the end of the year if you encounter a problem that should have been addressed much earlier.

It's really important to get a handle on all of the financials of your business and to monitor these on a monthly basis, this avoids any end of year "surprises". The most effective way to increase your profits is to understand every single cost in your business. Pay particular attention to your marketing spend, is it delivering results or are you paying for services you are not using to their full potential? Do you really need that subscription? Be brutal, if it is not generating an return on investment cut it out.

### Marketing To Win

Jacqueline Biggs

This article was written by author and marketing expert, Jacqueline Biggs. Her latest book "Marketing to Win - How Small Businesses Can Do More With Less" helps people with no marketing experience succeed in the world of business.

Topics:

• Jane
March 20 2013, 10:12AM

I want a book! My favorite piece of advice is the part about related products. I sell stationary and it honestly never occurred to me that I could offer nice pens or something after someone adds paper to their shopping cart. I’ll give it a shot.

• Antonio Vaughn
March 20 2013, 10:12AM

In the first example you said Theresa’s customers spend \$1oo on ten tshirts. So that’s \$10 a shirt. but then you lost me with your formula
1,210 customers x \$110 (average spend) x 11 (no of purchases / yr) = \$1,464,100

Doesn’t the \$110 mean 11 shirts? So why is the formula not

1,210 customers x \$110 (average spend & no of purchases / yr) = \$133,100?

• Jacqueline Biggs
March 20 2013, 10:32AM

Antonio – you are so right, thanks for pointing that out! The customers spend \$100 per t-shirt and \$1,000 a year, not \$10, so the the formula is correct, the description is incorrect!

• Jacqueline Biggs
March 20 2013, 10:33AM

Jane that is great news – glad to hear you are putting the strategy into action.

• Antonio Vaughn
March 20 2013, 10:35AM

I love the article, however I am a little confused my the formula as I stated above in my 1st comment. Other than that I think this post is very great and informative.

• Antonio Vaughn
March 20 2013, 10:37AM

Oh ok Jacqueline. Thanks, I always look forward to reading shopify posts!

• Liam Thomson
March 20 2013, 10:40AM

I really liked the section on psychological pricing – it’s a fascinating area and it’s made me very keen to learn more about it. Thanks for a great article!

• Antonio Vaughn
March 20 2013, 10:58AM

Liam I agree the section on psychological pricing is fascinating. I never really thought about that before now.

• Carson
March 20 2013, 11:28AM

Also found the psychological pricing idea insightful, it has my gears turning.

• Jennifer
March 20 2013, 01:44PM

Very useful and comprehensive article – full of valuable information for my business. Going to get a copy of that book!

• Jacqueline Biggs
March 20 2013, 01:54PM

Thanks Liam and Carson, glad it provided food for thought. Thanks Jennifer, let me know what you think of it.

• Jennifer
March 20 2013, 02:10PM

Great blog post as we launch our new online store. I think that I liked the comment about delighting customers the most. We are thinking of ways to do that…I know that receiving something unexpected from an online store would be a huge happiness factor for me. Thanks for your wisdom!

• Alex
March 20 2013, 09:37PM

I agree with Jennifer, great idea about sending an unexpected little gift to a lapsed costumer. It would definitely prompt me to buy again from that online store :)

March 20 2013, 09:39PM

I especially liked the suggestion about Guest Blog posting. Having been posting on my own blog for a while, I’m ready to branch out to expand my brand.

-D

• Terry Darcy
March 21 2013, 01:25AM

Great blog. Thanks for pointing out the cumulative and dramatic effect of increasing each segment by 10 percent.

• Diane Beaver
March 21 2013, 09:03AM

Loved the whole thing! Especially the fact that a series of three emails is proven to be the most effective and the psychological pricing. A sort-like psychological trick is what my son does when he had a bad grade, he makes the grade even lower with an additional horror story that happened that day at school and once he tells the real story, I’m already happy. Or maybe not exactly the same, but anyways, your post was really helpful Jacqueline!

• Jacqueline Biggs
March 21 2013, 01:53PM

Alex – glad you liked that, it’s a simple but super effective strategy.

David – don’t forget to ask people to guest blog on your blog too.

Terry – thanks!

Diane – that’s funny! Your son is very creative!

• Tom Huges
March 21 2013, 10:42PM

Very much enjoyed the article Jacqueline. Thanks!

• Trevor Hughes
March 22 2013, 10:41AM

Showing related products – and its easy to do!

• Pat Downey
March 22 2013, 10:50AM

Considering that there are so many facets of marketing, articles like this are great ongoing reminders to ‘tune-up’ all of our marketing strategies. Each aspect could be ratcheted up to be made more effective.

• Nicole Marett
March 22 2013, 10:58AM

Enjoyed these tips! I was intrigued by the psychological pricing, interesting that a higher price point can actual increase average spend.

• Ivan
March 22 2013, 11:11AM

I like the idea of having a marketing calendar – it puts everything in focus… I feel that’s what we’ve been lacking and will surely help increase business. I took a peek at the table of contents and this will definitely be a great read… can’t wait to win a copy!

• Jonathan Wilhelm
March 22 2013, 11:11AM

Offer multiple Buy Promotions. I see this from ThinkGeek a lot and it works well.

• Jacqueline Biggs
March 22 2013, 01:26PM

Tom – Thanks.

Trevor – so easy and so effective.

Pat – when it comes to marketing consider yourself always in beta and never stop testing and fine-tuning.

Nicole – try it out, few people want to buy the cheapest of anything.

Ivan – thanks – you can also download free chapters at Jacquelinebiggs.com to further whet your appetite!

Jonathan – it sure does!

• Alyson Simonds
March 22 2013, 04:20PM

I am new to Shopify and marketing through Social Media. Appreciate the fact that you touched on several ways to analayze how successful your marketing is, including getting people back that you have lost. Hope to read your book…..!

• Martha Salazar
March 22 2013, 04:51PM

Frequent communication! Never thought of doing a more than one follow-up on customers with abandoned shopping carts. I will definitely implement it!

• Carmen
March 24 2013, 07:16PM

This article was brilliant! Lots of great advice, great headers and made me rethink about a few things. Muchas gracias!

• Shoppocos
March 26 2013, 11:23AM

I agree with Jennifer, great idea about sending an unexpected little gift to a lapsed costumer. It would definitely prompt me to buy again from that online store :)

Shoppocos

• Mark Richard
April 01 2013, 09:10AM

shopify articles are always very interesting to read, they were giving such a wonderful ideas, how to get more sales and leads from the new customers and existing customers.

• Sarah
April 02 2013, 06:17PM

Loved this, thank you. I always thought 10% was just that, 10%, but now I see the bigger picture!

• Suhana
April 09 2013, 06:49AM

HI
Today i came across this amazing new website named nupinch.com…i really think you guys should check it out..

April 10 2013, 07:36PM

Thank you for a clear, practical article.
I’m a fan now and will try to implement your suggestions on my website.

• Sean
April 16 2013, 09:28PM

Your statement here threw me somewhat that I had to double check it.

“Theresa has an ecommerce designer shirt company and last year her marketing generated 10,000 new business leads. She converted 10% of these (1,000) into paying customers.
Each customer spent a total of \$1,000 on ten shirts over the course of the year.
Last year her business turned over \$100,000 and with a profit margin of 30%, her net profit was \$30,000”

It should be Turnover \$1,000,000 and profit \$300,000.

Great article though, with a lot of good pointers.

• Ash
June 11 2013, 01:54AM

Jacqueline, Great pointers here but like the previous commenter pointed out, given that the math is wrong, it takes away the dramatic point that I thought you were trying to make i.e. making a 100k business into a million dollar business by making small changes.

Still will likely buy your book…the amazon table of contents had me hooked :) thanks for the great tips and expaining them well.

• sophia walker
July 12 2013, 03:30PM

Inspiring strategies and tips. Impressive! I will surely try many new ones I see here.

• LLroomtempJ
September 25 2013, 10:03PM

Very well written and helpful article. Thank you for posting

• Virtual Assistant
August 12 2014, 07:16AM

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• Rose
January 14 2017, 09:13AM

Isn’t increasing customers from 1000 to 1210 a 21 % increase ?

• Rose
January 14 2017, 11:55AM

According to my calculation the net profit after 10% increase is \$631.000 with the profit margin of 47.4 % . which means an increase in revenue by 33.1% from \$300.000 to \$631.000 and an increase in the profit margin by 58% from 30% to 47.4% ? Can someone please tell me if i am doing it correctly? Either i am terribly wrong or the calculations in the blog which ranks on the first page of my google are wrong.

• Rose
January 14 2017, 12:03PM

Argh the correct one: above i mistakenly quoted the net profit instead of the revenue generated.

According to my calculation the net profit after 10% increase is \$631.000 with the profit margin of 47.4 % . which means an increase in revenue by 33.1% from \$1.000.000 to \$1.331.000 and an increase in the profit margin by 58% from 30% to 47.4% ? Is this correct. Thanks

• Matt
June 12 2017, 07:24AM

Great article full of tips, some of which I’m going to use on my store www.jorgan.co.uk I noticed that you mention using multi-buy discounts. At the moment I can only find paid for apps to use this method, is there a free way to do this within Shopify directly? Thanks.

• Md Nayeem
October 19 2017, 12:38PM

I never get such a article. Shopify.com is a very re-known website that’s why the quality of authors and articles is high. After reading the whole article it must be said that Jacqueline Biggs is not only a good writer but also a very experienced marketer. I liked all strategies of her. Thanks for sharing you great knowledge and resources.

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