Why eCommerce Sales Decline and Fluctuate – And What to Do to Increase Your Conversions and Profits

Click image to find Rob's books

This post was inspired by Rob Snell’s Yahoo! Stores SEO Rant. All ecommerce store owners need to read it.

Rob is one sharp ecommerce guy and THE Yahoo! Stores expert who wrote the book on Yahoo! Stores – literally – the Yahoo! Stores for Dummies Book.

If you have a Yahoo store you need to know Rob. Even if you don’t, you still need to know Rob. Here’s why: Yahoo Stores Expert Rob Snell Generates $10,354,767 Sales Increase.

If you sell anything this is one post you don’t want to take lightly.

There are two major reasons that sales are down or erratic:
Google and the economy. 

When Google first introduced conversion tracking to AdWords I was managing dozens of accounts for Small Business owners – primarily Yahoo! and Volusion ecommerce stores.

I warned my clients that giving Google that data would tell them what searches converted for them and allow them to increase costs per click on those keyword phrases and lower their rankings in the search engines to increase their profits.

Google KNOWS which of your keyword phrases convert!
And they’re taking that converting traffic away from
small business and handing it to their big brand buddies.

Later, Google bought Urchin analytics, rebranded it as Google Analytics, and offered it for free. I repeated my warnings – but none heeded them – and even if they had the odds are that most phrases that convert well for you will for your competitors who probably gave Google that data.

For 5.5 years I managed AdWords accounts, charging $100/hr in advance by PayPal and had all the customers I could handle.  But there was a big problem.

Why eCommerce Sales Declined

When Google added graphs to AdWords accounts I was able to confirm my suspicions that they were manipulating the quality of the traffic they sent. You can easily see this if you look at individual days for keyword phrases with a consistent conversion rate.

When traffic is up and conversions drop to zero,
Google is selling you worthless traffic.

Getting zero sales on increased ad spend
is a one-way ticket to bankruptcy.

What they were doing was obvious to me – especially when Google took over $300 in one day from a luggage store with a $500 a month ad spend budget. We usually spent about $15 a month on that high dollar keyword phrase and made two nice sales for a really high conversion rate.

That day we spent almost their entire budget for the month –
in one day! – and made zero sales
even though we had many times more traffic.  

Google had shown our very expensive exact match brand phrase for the generic word ‘luggage’ – and the results page for a search for the word luggage that day showed ads for several very expensive brands that no advertiser would target to the word luggage.

Someone searching for ‘luggage’ is highly unlikely
to be looking for a $1000+ aluminum case.

That is what ppc experts call distribution fraud: displaying your ads where they don’t belong. I had tiny accounts running on auto-pilot that I did not check in regularly – and Google’s ever expanding broad match and distribution fraud were getting consistently more dangerous.

As a one-person ppc specialist, I could not protect my clients.

The only way that MIGHT be possible is to write a custom program to immediately pause spending on any keywords that suddenly have no conversions.  If anyone ever did that it would probably be Marty Weintraub at Aimclear SEM services.

I sent the proof I had to Bob Cringely who was writing for PBS then.  That week he published The Next Microsoft: Google is learning too well from the master about what Google was doing.

When my friendly neighborhood psychopath decided to get violent and I had to leave suddenly without taking anything with me, I decided it was a good time to stop managing ppc ads anyway.

The handwriting was on the wall – Google’s monopoly was
DANGEROUS
And someone (me) needed to find other ways
to drive traffic to small businesses.

Since launching this new blog August 19, 2008, I wrote some posts to warn small businesses of the dangers:

• How Not to Lose Your Shirt on PPC Advertising
• My Step-by-step Method for Evaluating Your AdWords Account – what settings to use and why
• Google Farmer Update aka Panda Slaps Google Shopping and Google Maps Competitors

I want to call special attention to that last link because it contains screen captures showing that Panda (originally called Farmer by SEOs) was NOT about content quality:

Google slapped their competitors – especially shopping
comparison sites like TheFind and ShopWiki –
who compete with Google Product Search.

Sistrix data showed TheFind shopping comparison site lost 86% of their traffic. While they probably got some of that traffic back – these updates allow Google to test the effects, roll it back, and then slap you when you most need those rankings!

Look at the screen captures in that post and you’ll see that those types of sites show us thousands of small businesses – but Google only offers FIVE big brand stores with an additional fifteen if you click more.

Google reduced consumer choice overnight from thousands of small businesses
to Twenty of their big brand buddies – which is precisely what their
CEO announced was their plan in the now infamous comment:
“The Internet is fast becoming a “cesspool”
where false information thrives,
“Brands are how you sort out the cesspool.“

But Google did not stop at taking away your organic traffic. I ask you to focus again on the screen captures in that post about the Panda update and pay special attention to the red text in that post.

Those screen captures show that Google is HIDING products that ARE in the ecommerce store’s feed when you search for the money phrases, but showing them for generic phrases that don’t convert.

That proves they ARE in Google Product Search and this is
intentional diversion of converting traffic
from small businesses to big brands.

Some ecommerce stores aren’t seeing this yet because Google has not gotten around to their converting long tail phrases yet – but believe me they will in time get around to almost everyone.

If what you sell is available at eBay or Amazon or big brand stores your best converting traffic WILL be diverted eventually – and most likely already is but not ALL the time.

Google is clever that way. Just as they only sell junk traffic to AdWords customers for a day or two – knowing that most ppc “experts” will never check on daily results – they can easily hide whether you are appearing on page one or in what specific position through personalized results and constant churn.

Even more sneaky – you may rank for your target phrases
all year – until the prime time for you to sell that item.

Then your competition on page one – when you are probably pretty busy with sales (hopefully) and don’t notice (not good) is no longer other small businesses like yours – it is Amazon, eBay, Wal-mart, Target, Best Buy, etc.

So during the prime shopping periods – and especially between Thanksgiving and Christmas – those first page listings you usually have are driving traffic to big brands instead of small businesses.

Think that can’t happen to you? See Why You
Can NOT Rely Solely on Organic Listings for Traffic and Revenue
for more details and to read on ProBlogger about how they lost
traffic during the holiday sales season three years in a row.

I am NOT saying you should not optimize your site, implement good SEO processes or stop building quality links. Take as much traffic from Google as you can get – but immediately start getting traffic from every other source possible:

1. Start by getting your free local search directory listings through Universal Business Listings (UBL) – even if you are an online only ecommerce store – because incoming links from major sites like Yahoo!, Google, Bing, and hundreds of others will boost your listings in the serps. See our Local Search Case Study that shows a client who was getting 96% of their traffic from Google received 75 visitors from hundreds of other sources for every 100 visitors from Google.
2. Read what Rob Snell recommends as additional traffic sources and ACT on it.
3. Do blog outreach – and the easy way to do that is to get involved in our Small Business Blogging Contest designed to get bloggers really looking at what our contest sponsors have to offer.

ECONOMIC EFFECT ON ONLINE SALES

Because I work with dozens of bloggers and affiliate marketers around the world, I have unique insights into the state of the economy. Here are some key points you will want to understand:

• About three years ago a power affiliate from Australia started working with me because he saw his sales decline 30% across ALL niches. His sites target a primarily American audience.
• Many ecommerce store owners I know saw their traffic decline by about one-third due to the Google MayDay update and the Panda update took them down below half their normal traffic. While they sometimes see better traffic levels off and on, none have anywhere near recovered to traffic levels they once saw – and the percentage of sales lost parallels the amount of traffic decline.
• An exceptional SEO I know was earning – if I recall accurately – about $600,000 a year from his many sites 5-6 years ago. I recently spoke with him and asked how much sales had dropped. He said those same sites today only earn about 10% of what they did back then.

WHAT YOU CAN DO:

1. Find other sources of traffic.
2. Focus on increasing your conversion rates.
3. Use independent search engines, analytics, and online solutions provided by small companies.
4. Share with everyone you know the importance of using alternatives to Google. If more people used different search engines to find what they need, Google’s monopoly would decrease and they would not be so dangerous. Read about why Google really IS evil.
5. Encourage your friends, family, co-workers and customers to support small businesses because they are the key to economic stability. See the infographic based on research done by Local First in my post on why CommentLuv and buying local keeps money circulating to create more jobs that pay a living wage, support critical services like schools and fire departments, and raise the local standard of living.

Money we spend with online and local small businesses is immediately recirculated in the economy – unlike money we spend with big brands and big box stores that benefits the wealthy and does NOT recirculate.

According to a study commissioned by Local First:

$73 of every $100 dollars we spend in locally
owned businesses STAYS in our communities!

Only $43 of every $100 dollars spent in
non-locally owned businesses STAYS.

That extra $30 means more local sales tax revenues and more jobs and higher pay and benefits for people in your community. Small businesses also pay more in property taxes that support schools and fire departments.

Imagine how much more than $30 that would be if your local small businesses start sourcing more of what they sell locally.  Most currently buy from major suppliers and NOT from other local businesses – but they COULD and they WILL if you encourage and support them!

I know this is a very long post and covers some complicated subjects. DO NOT let that keep you from doing what you MUST do. I can recommend someone who can assist you or how you can learn needed skills yourself.

Either hire a conversion expert or learn to do conversion testing yourself.  The people at Experiment.ly have been refining their solution to make it easy enough for even beginners.

Sign up for a free Experiment.ly account and jump in with both feet. This is NOT something you can afford to put off and the best way to learn is to just do it. Then even if you decide to hire expert assistance later, you will better understand what they are doing for you.

SURVIVING GOOGLE:

• New: Google PPC “Improvements” Coming in May: Watch Out! How to Opt Out of Expanded Exact Match.
• Why Having a Brand Evangelist Increases Conversions, Customer Satisfaction and Profits
• How YOUR Small Business Can Get Totally Free Advertising on Google Places, Yahoo! Local, Bing and Hundreds of Local Directories and Niche Sites
• Local Search Directory Submissions: Universal Business Listings UBL Example Webcards
• Increase Conversions By Sharing Pillar Content When Your Audience is Most Receptive
• Quantity Equals Failure. Success Focuses on Quality!
• Small Business Economy: How to Beat the Recession
• Why Small Business and Bloggers Can NOT Ignore Economic Decline and Occupy Wall Street
• CommentLuv Your Way to Business Prosperity
• Case Study: How to Deal with a Negative Review on Google Places
• Local Search Case Study: Local Search Directory Referral Traffic Thanks to Universal Business Listings
• Google Farmer Update aka Panda Slaps Google Shopping and Google Maps Competitors
• Small Business Internet Marketing: Where to Start

Tagged as: conversion optimization, Ecommerce, small business, small business advice