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How Seamless Operations Management Affects Conversions

by Chad Rubin
June 28, 2017

What’s the first thing that comes to mind when you think of conversion optimization?

Marketing?

If you’re like most business owners, then that’s probably it.

However, operations management can be just as (if not more) valuable than marketing for boosting conversion. Operations makes up the heart of any business, ensuring that processes run smoothly, shipments come in, goods are shipped out, and customers are given the service they need.

Businesses that struggle with offering timely deliveries, accurate products, or even good customer service often do so because of a lack of operations management. Inefficient processes make it difficult for employees to follow proper procedure, resulting in wrong, late, or even damaged orders.

Over time, bad operations management increases costs while naturally building up bad reviews and a poor online reputation.

This inevitably decreases conversion and sales, because customers rely on social proof when buying online. A large amount of negative reviews can greatly damage conversion to purchase. This is especially true when those reviews criticize shipping speed, product quality or condition, and company policies like customer service,

What is Seamless Operations Management?

Introducing operations management to streamline your processes can help you to improve behind-the-scenes business management so you deliver a better experience to customers.

Seamless operations management enables faster shipping, timely order processing, quality control, and reliable order fulfillment so your customers get products on time and in good condition.

This means reviewing your infrastructure to recognize problems and taking measures to fix them.

For example, one of the largest problems for ecommerce businesses is scaling up and down. If your store is rapidly growing, your tools might not be able to keep up with growth. Switching over to new software and tools necessitates a certain learning period, which hurts your processes and management – and by the time it’s fully integrated, you might have already outgrown it.

Seamless operations management means planning and monitoring your operations to meet growth, implementing processes for efficiency, and constantly working to improve. This will reduce conversion issues like lack of payment methods, page inefficiencies, and the like.

When people have good experiences, they leave reviews, write on their blogs, talk about the product on their social media, and may even directly recommend it to friends and peers. This in turn creates a positive buzz around your product, known as social proof.

Social proof is the cumulative effect of the opinions of people have had good experiences with your product. If a consumer sees that peers (whom they trust) have had good experiences, they are more likely to purchase the product themselves, because it allays the fears they have about ordering online (such as slow shipping, poor quality, product doesn’t meet expectations, bad customer service, etc.)

Read more about how ecommerce product reviews help boost rank here.

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Understanding Current Conversion Difficulties

Improving your operations management starts with recognizing your current issues so that you can understand what you need to work on.

For example, if you check your analytics, you can see a great deal of data. You can determine which pages are performing and how products are converting with tools like Google Analytics.

You should know:

  • How long the visitor stayed on the page (i.e. bounce rate of product or category pages)
  • How many products they looked like
  • How long visitors stayed on pages
  • At what time shopping carts were abandoned
  • Conversion percentages by browser
  • Conversion by payment method
  • The reviews on the page

You can use this data to highlight where you have problems, so that you can begin to make improvements.

Customer Reviews – Customer feedback provides valuable insight into what you are or are not doing right. By paying attention to reviews, your feedback across the web, and messages that customers send to you directly, you can see what specifically makes your customer unhappy.

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Introducing Seamless Operations Management

In most cases, ecommerce stores can improve operations management by taking two major steps.

The first is to introduce scalable tools and systems where they are not already in place to meet growth without operational difficulties. This is most often achieved by switching to centralized data (like an ERP) and using software as a service (SaaS) and cloud tools, which can be easily scaled up, often with no immediate upper limit, as you grow.

This ensures that business growth can be met quickly and easily by changing a subscription versus disrupting processes by introducing new software.

The second is to deliberately work to improve areas that affect conversion such as websites, pages, images, customer service, fulfillment, delivery, quality assurance, and costs.

You can achieve this by specifically reviewing areas where you may be having difficulties and working to improve them.

Operations management is typically broken down into two stages; tools and planning.

Planning – Here you strategically plan your goals and operations, outlining how you intend to get there.

Tools – You integrate the tools you need to achieve efficient operations management. For example, ERP, Customer Relationship Management software, and other new tools.

What to review

You should review areas including but not limited to:

Inventory Management – Inventory and supply chain management are often key discrepancies behind stock-outs, overselling, and shipping the wrong product. An SaaS inventory management solution like Skubana can help you to improve inventory management by giving you the tools to sync inventory across all your channels, set up automatic reorder points to prevent stock outs, and to improve actual inventory management to reduce costs and other issues.

Similarly, improving inventory management can help you to lower costs with better supply chain management. For example, understanding your economic order quantity enables you to cut warehousing and storage costs, lower the risk of dead stock, and reduce total ordering costs.

Using Automation to Improve Processes – Automation allows you to speed up processes including order processing, shipping label creation, purchase orders, and much more. This can save man-hours, so you or your employees can be more efficient, process orders more quickly, and speed up the processes between the shopping cart and fulfillment. If most or all your manual repetitive actions are automated, you can handle orders much more quickly without scaling your workforce up.

Automation also ties into front end pricing and marketing. Repricing automation software can automatically update the pricing on your products across your channels so that you improve conversion.

Fulfillment – Your fulfillment processes should be optimized and chosen based on quality, cost efficiency, and features. For example, if you can’t keep up with orders inside of your own warehouse, struggle with providing quality, or spend too much on providing quality services, third party logistics (3PL) may be a better option than handling fulfillment in-house.

Your goal should be to over-deliver on your customer expectations when it comes to packaging and delivery speed, so that they are left pleased and pleasantly surprised, rather than “just okay” with their order.

Upselling Opportunities – While you may not be able to offer upsells on Amazon and eBay (except with shipping discounts for multiple items) you can work to upsell and increase the value of your own website and shopping cart. Integrate software or code that allows you to offer similar products, or those often purchased together to boost sales.

Employee Interaction and Customer Service – Your customer service representatives should have the tools and the knowledge needed to respond quickly and efficiently. This may involve introducing customer service tools like XSellCo HelpDesk or another similar tool, so that customer service representatives can easily see what the customer purchased, its status, and other information. It may also involve additional training. If you’re still handling a large amount of customer service yourself, consider automating answers for common questions, collating all communication channels to one place, and otherwise working to reduce your workload so that you can provide more efficient service.

Product Quality – Every product should be inspected when it enters and exits the warehouse to ensure that it meets company standards for quality, and is packaged effectively. Integrating this type of policy may seem like it would cost money on the back end, but it reduces returns and improves customer satisfaction, which makes it well worth the effort.

Internal Communication – Your own internal communication can be a huge problem if it isn’t efficient enough. From customer service, to social media, to inventory management, to supply, to finance, every part of your team must be able to communicate with each other quickly and effectively, largely because each is basing decisions on information supplied by the other. Ensuring efficient internal communication allows for better operations management.

Operations management improves your front and back end processes, allowing you to offer a better experience to the consumer, while boosting the salability of your products. In turn, providing reliable quality service will boost your reputation across the web, improving your social proof, and improving conversion. Seamless operations management makes you more efficient as a business, and that improves conversion on every front.

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Chad Rubin Crucial Vacuum and Skubana Founder Chad Rubin grew his ecommerce business to an 8-figure business in 7 years. He is a Top 250 Amazon Seller, and co-founded Skubana as an all-in-one ERP system and operations platform designed for high volume sellers to run and automate their business. Sign up for a 14-day trial. Follow Chad on Twitter, Facebook, or Instagram @ecommrenegade or connect with him on Linkedin.