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Operating as company since 2005, based in Belfast at NISP

We partner with companies to provide
• Our Software Platform (IRP)
• Consultancy & Analysis
• Online Marketing

Involved in long term contracts

By 2011 we had transacted £500,000,000 for NI companies

>95% of these eCommerce sales were outside NI & >50% outside UK

By the end of 2013 we aim for £1 Billion in transactions

We want to share some of our key findings on eCommerce
eCommerce is more complex than traditional retail

Business model is different to other forms of selling

Involves different skills but the core concepts are simple

The eCommerce platform PARTNER choice is critical

In eCommerce there are online marketing and technology
requirements that need specialists

Standard business rules apply - Revenue must be Greater than
expenses
Certain traits in company cultures lend themselves to online success…

Companies that can ADAPT and implement

Companies that can take on new job roles

Companies that can develop capabilities in Customer Service, Data
Management, Picking and Packing, Online Marketing, Strategic
Management … in an increasing number of VERTICALS

Companies that work to understand their online marketplace and are
prepared to compete on the internet

Companies that make the right strategic partnerships in online marketing
Can you Compete - a 30 Minute analysis of a MARKET to find out…

Take your top 30 Best Selling items and List your price in a Excel

Examine your price versus the Market price on Google Products and the
number of sellers online

See how these compare

Take the domain names of the Competitors and look at their Alexa
Traffic Ranks & Company Accounts (RiskDisk)

Take the top Selling Brands and Categories and analyse the search
volumes in Google Insights. These can be related back to demand and
potential sales.
eCommerce works best if you are
competitive in the right MARKET, have the
 right TECHNOLOGY PARTNER, and the
       right STRATEGY & PEOPLE…

    You must be prepared to ADAPT &
 structure your company in the right way
TRAFFIC + CONVERSION = SALES

TRAFFIC costs money – no matter where it comes from it has a cost

CONVERSION Depends on many things – Technology, Design, Traffic
Source, Other Factors… but the PRICE is also key

What we are saying that you have to GIVE a percentage of your
turnover to the Traffic Source - CPA%
Traffic - A quick look at paid PPC

Traffic From PPC
      c    m C        CPC
                        C                Total Cost
                                             l    t      SALES
                                                             S    Gross Profit
                                                                      s      t                  A
                                                                                 Profit After CPA
                                                                                      t     r A


100 Visitors
  0        s          10p
                        p                10GBP
                                             P           100GBP
                                                              P   50GBP
                                                                      P          40GBP
                                                                                     P


200 Visitors
  0        s          10p
                        p                20GBP
                                             P           200GBP
                                                              P   100GBP
                                                                       P         80GBP
                                                                                     P

Visitors numbers can scale up depending on market size
Conversion Rates on this 10GBP PPC spend

Conversion Rate
         n    e       Total Sales
                          l     s        Total Cost
                                             l    t           Gross Profit
                                                                  s      t                  A
                                                                             Profit After CPA
                                                                                  t     r A


Rate 1%
   e %                100GBP
                           P             10GBP
                                             P                50GBP
                                                                  P          40GBP
                                                                                 P


Rate 3%
   e %                300GBP
                           P             10GBP
                                             P                150GBP
                                                                   P         140GBP
                                                                                  P

Conversion will reach a limit dependent on technology underpined by price
Pricing – the effect of margin

Conversion Rate
         n    e        Total Sales
                           l     s         Margin
                                                n        Gross Profit
                                                             s      t                  A
                                                                        Profit After CPA
                                                                             t     r A


Rate 1%
   e %                 100GBP
                            P              100%
                                              %          50GBP
                                                             P          40GBP
                                                                            P


Rate 3%
   e %                 300GBP
                            P              70%
                                             %           105GBP
                                                              P         95GBP
                                                                            P

 Finding the tipping point on return and margin is key
CPA % - Tying together traffic conversion and margin


Conversion Rate
         n    e     Total Sales
                        l     s    Margin
                                        n       Gross Profit
                                                    s      t   Profit After CPA
                                                                    t     r A     CPA% Sales
                                                                                     %     s   CPA % Profit
                                                                                                 A        t

Rate 1%
   e %              100 GBP
                      0 P          100 %
                                     0          50GBP
                                                    P          40GBP
                                                                   P              10%
                                                                                    %          20%
                                                                                                 %

Rate 3%
   e %              300 GBP
                      0 P          70 %
                                    0           105GBP
                                                     P         95GBP
                                                                   P              3.33%
                                                                                      %        10.5%
                                                                                                   %



Companies should be monitoring CPA % as the key indicator
CPA is never a value – it is always a % cost of the traffic source – i.e., you will
have to give a % of your sales to whoever sent you the traffic

eg. Your spend always depends on turnover
1000GBP sales - 100GBP Spend on Online Marketing (10% CPA)
2000GBP sales - 200GBP Spend on Online Marketing (10% CPA)

What we are fundamentally saying is

 Acquire traffic & convert it at an acceptable COST

It’ s as simple as that…but before you can convert anyone you need them at your site
Paid traffic sources are the only ones to build a business on

SEO (natural google listings) while useful do not offer a scalable model

CPA % from traffic source change over time

All Traffic sources CPA% will depend on how SKILLFULLY you set them up

Success in TRAFFIC generation often depends on specialists

You want to give the traffic sources as small a Percentage of your
turnover as possible
What we are seeing is PPC and Affiliates to a lesser degree play the key role
in FIRST TOUCH CUSTOMER ACQUISITION
Key sources:
PPC, Affiliates, Content Networks, Organic Search, Price Comparison Sites,
Marketplaces, email Marketing, Social Media…

The CPA% varies by traffic source

PPC is the key traffic arena and all arenas are skill dependent

Traffic sources often depend heavily on technology

As turnover grows these can become VERTICALS

The maximum traffic needs to be derived at the minimum CPA%
Once the traffic is there you must convert the traffic to revenue

eg. The browser must become a buyer

PRICE is a key driver

Your site must be simple

Key selling points must be prominent

Customer needs to feel reassured

You have seconds to engage their interest

Multivariant testing is a key way to measure Conversion
Through PPC, Affiliation it’s possible to reach most of the world’s consumers

But when you think this through…it brings new requirements to your website,
organisation and technology for conversion to buyers…

Non UK customers will have different currencies

Different customers will have different languages

Each country will have different key selling points

Each country will have a different demand for products

Some countries will require different payment methods (Credit Cards, PayPal
etc… but also iDeal, Alipay, Yandex money, ELV, etc)
These all need to be tackled through TECHNOLOGY – the right eCommerce
PARTNER can help break down these barriers

It also requires company mindset change and new skill sets

If the key areas are tackled the international expansion can be prolific in
certain markets
Generally online customers are not loyal

When you have the customer you need to try to retain them

Online loyalty schemes and vouchers stimulate repeat sales

Email mail shots and social media connect with the customer at low cost

Some companies extend offline engagement such as catalogues

Repeat custom and increased average order value reduce overall CPA%
Success depends on Technology and also the right Consultancy

Success Depends on effective & efficient PPC & associated skillsets

Efficiency of picking and packing and procedures and IT systems is critical – it
reduces cost. Multichannel overlay assists in efficency…

International eCommerce is significant. A weak pound and English language
helps. We see goods manufactured in a country, shipped to here to the retailer,
then sold back to the countries consumers.

The best online strategy is to differentiate and market individually to any country
Irish sales are easy to pick up while there is an exchange rate advantage and
generally we have found the online competition in Ireland is weak

80% of eCommerce strategy will not depend on where you are based in the
United Kingdom

The focus for the retail markets we are in should be on getting sales outside
Northern Ireland. Overall less than 5% of our transactions have been from NI

Increasing sales requires many technical and business cornerstones in place

As a technology company our take has always been the TECHNICAL angle on
overcoming barriers and reaching customers and this is what we have found
worked. Having technical solutions, relating to the generation of traffic, ability to
handle different languages and currencies
We have also found that there is very little for free. To acquire new customers
almost all of our focus has been on paid arenas. Paying guarantees exposure.
We have yet to see a successful model based on Search Engine Optimisation

eCommerce statistics like Google Analytics should have readership at board
level and core concepts must be understood

Companies need the right culture, and people in the strategic role who can
cope with change and to identify when (and which) external specialists are
required

Its a big arena but the rewards are equally big....
Our view is that you need to be in the RIGHT MARKET with the RIGHT
PRODUCTS to succeed online

You must accept that you must give a PERCENTAGE of your
TURNOVER to the traffic source & try to keep it to a minimum (a low
CPA%)

Your PRICING must be in line with the online MARKET PRICE

Then…
You need the right PEOPLE
You need the right TECHNOLOGY PARTNER
You need expert ONLINE MARKETING at an acceptable cost
You need the drive to succeed and be able to ADAPT
If this is in place


   THE SALES CAN BE INCREDIBLE

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Driving Online Sales - Daniel Loughlin, Making e-commerce work for you, 22 March 2012

  • 1.
  • 2.
  • 3.
  • 4. Operating as company since 2005, based in Belfast at NISP We partner with companies to provide • Our Software Platform (IRP) • Consultancy & Analysis • Online Marketing Involved in long term contracts By 2011 we had transacted £500,000,000 for NI companies >95% of these eCommerce sales were outside NI & >50% outside UK By the end of 2013 we aim for £1 Billion in transactions We want to share some of our key findings on eCommerce
  • 5. eCommerce is more complex than traditional retail Business model is different to other forms of selling Involves different skills but the core concepts are simple The eCommerce platform PARTNER choice is critical In eCommerce there are online marketing and technology requirements that need specialists Standard business rules apply - Revenue must be Greater than expenses
  • 6. Certain traits in company cultures lend themselves to online success… Companies that can ADAPT and implement Companies that can take on new job roles Companies that can develop capabilities in Customer Service, Data Management, Picking and Packing, Online Marketing, Strategic Management … in an increasing number of VERTICALS Companies that work to understand their online marketplace and are prepared to compete on the internet Companies that make the right strategic partnerships in online marketing
  • 7. Can you Compete - a 30 Minute analysis of a MARKET to find out… Take your top 30 Best Selling items and List your price in a Excel Examine your price versus the Market price on Google Products and the number of sellers online See how these compare Take the domain names of the Competitors and look at their Alexa Traffic Ranks & Company Accounts (RiskDisk) Take the top Selling Brands and Categories and analyse the search volumes in Google Insights. These can be related back to demand and potential sales.
  • 8. eCommerce works best if you are competitive in the right MARKET, have the right TECHNOLOGY PARTNER, and the right STRATEGY & PEOPLE… You must be prepared to ADAPT & structure your company in the right way
  • 9. TRAFFIC + CONVERSION = SALES TRAFFIC costs money – no matter where it comes from it has a cost CONVERSION Depends on many things – Technology, Design, Traffic Source, Other Factors… but the PRICE is also key What we are saying that you have to GIVE a percentage of your turnover to the Traffic Source - CPA%
  • 10. Traffic - A quick look at paid PPC Traffic From PPC c m C CPC C Total Cost l t SALES S Gross Profit s t A Profit After CPA t r A 100 Visitors 0 s 10p p 10GBP P 100GBP P 50GBP P 40GBP P 200 Visitors 0 s 10p p 20GBP P 200GBP P 100GBP P 80GBP P Visitors numbers can scale up depending on market size
  • 11. Conversion Rates on this 10GBP PPC spend Conversion Rate n e Total Sales l s Total Cost l t Gross Profit s t A Profit After CPA t r A Rate 1% e % 100GBP P 10GBP P 50GBP P 40GBP P Rate 3% e % 300GBP P 10GBP P 150GBP P 140GBP P Conversion will reach a limit dependent on technology underpined by price
  • 12. Pricing – the effect of margin Conversion Rate n e Total Sales l s Margin n Gross Profit s t A Profit After CPA t r A Rate 1% e % 100GBP P 100% % 50GBP P 40GBP P Rate 3% e % 300GBP P 70% % 105GBP P 95GBP P Finding the tipping point on return and margin is key
  • 13. CPA % - Tying together traffic conversion and margin Conversion Rate n e Total Sales l s Margin n Gross Profit s t Profit After CPA t r A CPA% Sales % s CPA % Profit A t Rate 1% e % 100 GBP 0 P 100 % 0 50GBP P 40GBP P 10% % 20% % Rate 3% e % 300 GBP 0 P 70 % 0 105GBP P 95GBP P 3.33% % 10.5% % Companies should be monitoring CPA % as the key indicator
  • 14. CPA is never a value – it is always a % cost of the traffic source – i.e., you will have to give a % of your sales to whoever sent you the traffic eg. Your spend always depends on turnover 1000GBP sales - 100GBP Spend on Online Marketing (10% CPA) 2000GBP sales - 200GBP Spend on Online Marketing (10% CPA) What we are fundamentally saying is Acquire traffic & convert it at an acceptable COST It’ s as simple as that…but before you can convert anyone you need them at your site
  • 15. Paid traffic sources are the only ones to build a business on SEO (natural google listings) while useful do not offer a scalable model CPA % from traffic source change over time All Traffic sources CPA% will depend on how SKILLFULLY you set them up Success in TRAFFIC generation often depends on specialists You want to give the traffic sources as small a Percentage of your turnover as possible
  • 16. What we are seeing is PPC and Affiliates to a lesser degree play the key role in FIRST TOUCH CUSTOMER ACQUISITION
  • 17.
  • 18. Key sources: PPC, Affiliates, Content Networks, Organic Search, Price Comparison Sites, Marketplaces, email Marketing, Social Media… The CPA% varies by traffic source PPC is the key traffic arena and all arenas are skill dependent Traffic sources often depend heavily on technology As turnover grows these can become VERTICALS The maximum traffic needs to be derived at the minimum CPA%
  • 19.
  • 20. Once the traffic is there you must convert the traffic to revenue eg. The browser must become a buyer PRICE is a key driver Your site must be simple Key selling points must be prominent Customer needs to feel reassured You have seconds to engage their interest Multivariant testing is a key way to measure Conversion
  • 21. Through PPC, Affiliation it’s possible to reach most of the world’s consumers But when you think this through…it brings new requirements to your website, organisation and technology for conversion to buyers… Non UK customers will have different currencies Different customers will have different languages Each country will have different key selling points Each country will have a different demand for products Some countries will require different payment methods (Credit Cards, PayPal etc… but also iDeal, Alipay, Yandex money, ELV, etc)
  • 22. These all need to be tackled through TECHNOLOGY – the right eCommerce PARTNER can help break down these barriers It also requires company mindset change and new skill sets If the key areas are tackled the international expansion can be prolific in certain markets
  • 23. Generally online customers are not loyal When you have the customer you need to try to retain them Online loyalty schemes and vouchers stimulate repeat sales Email mail shots and social media connect with the customer at low cost Some companies extend offline engagement such as catalogues Repeat custom and increased average order value reduce overall CPA%
  • 24. Success depends on Technology and also the right Consultancy Success Depends on effective & efficient PPC & associated skillsets Efficiency of picking and packing and procedures and IT systems is critical – it reduces cost. Multichannel overlay assists in efficency… International eCommerce is significant. A weak pound and English language helps. We see goods manufactured in a country, shipped to here to the retailer, then sold back to the countries consumers. The best online strategy is to differentiate and market individually to any country
  • 25. Irish sales are easy to pick up while there is an exchange rate advantage and generally we have found the online competition in Ireland is weak 80% of eCommerce strategy will not depend on where you are based in the United Kingdom The focus for the retail markets we are in should be on getting sales outside Northern Ireland. Overall less than 5% of our transactions have been from NI Increasing sales requires many technical and business cornerstones in place As a technology company our take has always been the TECHNICAL angle on overcoming barriers and reaching customers and this is what we have found worked. Having technical solutions, relating to the generation of traffic, ability to handle different languages and currencies
  • 26. We have also found that there is very little for free. To acquire new customers almost all of our focus has been on paid arenas. Paying guarantees exposure. We have yet to see a successful model based on Search Engine Optimisation eCommerce statistics like Google Analytics should have readership at board level and core concepts must be understood Companies need the right culture, and people in the strategic role who can cope with change and to identify when (and which) external specialists are required Its a big arena but the rewards are equally big....
  • 27. Our view is that you need to be in the RIGHT MARKET with the RIGHT PRODUCTS to succeed online You must accept that you must give a PERCENTAGE of your TURNOVER to the traffic source & try to keep it to a minimum (a low CPA%) Your PRICING must be in line with the online MARKET PRICE Then… You need the right PEOPLE You need the right TECHNOLOGY PARTNER You need expert ONLINE MARKETING at an acceptable cost You need the drive to succeed and be able to ADAPT
  • 28. If this is in place THE SALES CAN BE INCREDIBLE