By ‘just’ changing a banner, I increased revenues by over £2m
Following university, my career followed an interesting path within online gaming. As an industry it is interesting to work within because things move VERY FAST, and there is a great environment of online experts looking at new ways to improve revenues online.
The company I’ve founded, DiscountIF, works with football clubs as clients, some of which are still making the ‘full’ transition into digital. As an industry the online gaming industry does very well to monetise sports fans online. I therefore wanted to share one of my previous projects that led to an increase of over £2m in revenue that I believe can help football clubs (or any merchandise retail store) monetise better.
The Challenge
The online gaming company I worked for had an online ‘store’ with tens of thousands of customers coming to play each month. The challenge we were facing was one of having 100s of games in our online store, and us not knowing which ones are the right ones to prioritise on or store.
Each game had a particular profit margin (by design), but we also had pay a variable revenue share on each game. There are other levels of factors and complexity, but I’ll ignore these for the sake of brevity.
The challenge we were facing was one of having 100s of games in our online store, and us not knowing which ones are the right ones to prioritise on or store
Prior to the project the landing page was partially managed based on what’s new, and what games we knew were the most popular.
This has parallels with football clubs online merchandise stores. Over a 100 branded products in your online store, each with a different profit margins. The question is which ones do you prioritise to your audience of fans?
From observation most football merchandise stores do something similar to what we were doing prior to the project, by showcasing their *new* products, and the Home Kit (the most popular product) on the main banner of the landing page.
Bread & Milk Journey
For our project, we drew inspiration from our daily journey to buy bread & milk at the supermarket.
Most physical supermarket stores designed to be perfect balance between ‘convenience’ and ‘cross-selling or up-selling’. The best example to give is that most people enter a supermarket to buy basics such as bread & milk. These are usually located at the far end of the store. Whilst walking through the store, you’re being sold other potential products right up to the point of sale where you have chocolates.
Some might be thinking, so what has this got to do with an online store. We took the bold opinion that it’s virtually THE SAME. Most customers came to our website to play one or two very popular games (the bread & milk). However, rather than placing it at the back of our store like the supermarket, we always placed them at the front of our online store.
For football online merchandise stores you should be able to relate to this, with your home kit. This is likely to be your most popular product, and more often than not this is featured on the main banner of your online store. Most sites use a banner rotator for this, but stats usually show that the most popular viewed is the first one.
With this article we’d like you to question that, and trial other iterations to see whether you can monetise better.
To make things easier for you, I’ve made a list of 6 steps you can follow to achieve the same success as I had when I ran a similar project that increased revenues by over £2m.
The 5 steps listed are focused on you managing the main banner on your stores landing page.
1) Analyse your product list popularity and profitability
One of the first things you need to do is look at your data. For every product in your store we’d recommend retrieving the following information:
Popularity: Average Daily Revenue from the last 60 or 90 days*
Profitability: Profit Margin
Even though this sounds simple when written, it’s important to get this part right!
Note: You may opt to go for 2 different metrics, though we chose these so we can focus on profitable monetisation.
*If you’re a data geek, then we’d recommend using Median rather than Average as spikes in data will cause less of a bias
2) Group your products
To make things easier to manage and test, you should group ranges for Popularity & Profitability:
Popularity (Avg. Daily Revenue): Low, Medium, High
Profitability (Profit Margin): Low, Medium, High
We’d recommend 3 levels for each category so as not to make it too complicated. This also gives you 9 combinations of products:
LL, LM, LH, ML, MM, MH, HL, HM, HH
which will be used when planning your timetable.
3) Setup a timetable to manage the rotation of your main banner
On most websites your main banner would get anything from 50–80% of our website views and clicks. Choosing what to showcase on this banner has a significant effect on what customers do when they land on your store.
Set a timetable for approximately 8 to 12 weeks, and for each week test placing a particular type of product on the main banner of your landing page.
Week 1: HH (High Popularity, High Profitability)
Week 2: MH (Medium Popularity, High Profitability)
4) Track a *new* metric: Incremental Revenue
The way you measure your results is also very important. We’d recommend tracking a metric, call it “Incremental Revenue”.
For each week during the trial, measure how much revenue you’ve earned from the product vs. the average revenue you’d normally earn.
Week 1 : HH, £10,000 (week 1) vs. £8,000 (Avg) = £2,000 Incremental Revenue
Week 2: MH, £7,000 (week 1) vs. £2,000 (Avg) = £5,000 Incremental Revenue
5) Analyse the best combinations of products
The last part of the process involves finding the best combinations, that give you the largest incremental revenue.
When I ran the project at the online gaming company, it turned out there was a bit of a Darwinian element to our results…
Highly Popular Games: Got some incremental revenue
Medium Popular Games: Got a lot of incremental revenue < BIG Opportunity
Low Popular Games: Got very little incremental revenue
6) Make sure to stick to it once you found a winning recipe
Once you’ve found the winning recipe for managing your digital store, then make sure you have processes in place to follow through with it!
It’s worth highlighting that the project I managed was with a group of excellent other digital experts who contributed to the implementation & success of the project.
For readers who manage online stores and would like to talk further please share your feedback below. You can contact me through www.discountif.com or email contact@discountif.com.
DiscountIF is a promotions tool to increase monetisation of sports fans.
