The Anatomy of a $97 Million WooCommerce...

The Anatomy of a $97 Million

WooCommerce Page…

Introduction

In this CRO (Conversion Rate Optimization) case study, we share

the story Protalus, and how we grew their revenue by 1,212%

over 10 months by using various CRO techniques.

They market an insole that corrects the misalignment suffered

by roughly 85% of the population. Misalignment is the cause of

most back, knee, and foot pain. Back pain alone is estimated to

be a $100 billion a year market.

Summary

• We (with Protalus’ team) increased direct sales by 91% in about

6 months through one-click upsells and CRO.

• Based on the direct sales increase, current run-rate revenue,

the "Virtuous Cycle of CRO"-fueled growth rate, and revenue

multiple for their industry, we estimate it added about $97 million

to the company’s valuation*.

• A concrete example of the Virtuous Cycle of CRO: Before we

increased the conversion rate and average order value, Google

Adwords was not a viable channel. Now it is, opening a whole

new floodgate of profitable sales! Ditto for at least two other

channels. In part due to our work, Protalus’ annual run-rate

revenue has grown by 1,212% in less than a year.

By Jasper Kuria, Founder, Capital & Growth

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http://info.capitalandgrowth.org/virtuous/

info.CapitalandGrowth.org/freebie-woo


*We arrived at the $97 million figure by

using a 4x multiple on the annual run-rate

revenue we helped Protalus attain.

Protalus’ core product is differentiated,

patent protected, and high margin.

They also have a strong brand and raving

fans. Among publicly traded companies, in

the Shoes & Apparel category, they're most

similar to Lululemon Athletica, which has a

4x plus revenue multiple.

The $97 Million Figure: Warren’s Wisdom…

While Nike and Under Armor engage in

a bloody price war and margin-eroding

celebrity endorsements, Lululemon

commands significantly higher prices

than its peers, without big-name

backers!

Business gurus Warren Buffett and

Charlie Munger often say that the true

test of a defensive moat around a

business is “Can you raise prices

without hurting sales?”

Protalus has this in spades. They've

raised prices several times while

simultaneously increasing units sold —

from $39 to $49 to $59 to $69 to $79 to

$99 to $119.



https://finance.yahoo.com/quote/LULU/



First, We Got 21% More Sales by

Adding 1-Click Upsells

• Are you doing 1-click upsells? As in, buyers don’t

have to re-enter their credit card details to buy

more stuff from you?

• This is essentially free money and is different

from presenting offers before the checkout

process (‘those who bought this also bought that’

a la Amazon).

• It is the first thing we did to grow sales. We

didn’t get 21% right off the bat but tested our

way to it.

• The slides show the two crucial things we did to

significantly increase the take rate for 1-Click-

Upsells.

• Not sure how to do this? Please get in touch:

[email protected]





This change alone increased the 1-click

upsell rate by 145%--that is almost 3x.

Google Experiments called the winner

having attained 99% statistical significance.

1. Including “free upgrade to expedited shipping” in the

headline: 145% lift





Google Experiments screenshot showing 145% lift





Adding Celebrity

Testimonials: 60% Lift

We added two celebrity testimonials. (Ms. Senior

America and a former NFL player).

Ms. Senior America’s endorsement is especially effective because about 60% of Protalus’ customers

are female and almost one-third are retired.

We uncovered these gems by reviewing all 11,000 (at

the time) customers' testimonials.

We call these ‘hidden wealth’ opportunities and every

business we have worked with has some—persuasive

aspects of your business that are not being told.

But it is not your fault. Sometimes, as a business

owner or in-house marketer, you may lack the

objectivity to assess what is a big deal!





Google Experiments Screenshot Showing the Effect of Adding

Celebrity Testimonials: 60% Lift w/ 97% Statistical Significance





58% More Sales on Main Landing Page by Addressing Key Objections

• Having attained positive ROI for the client by

adding 1-click upsells, we turned to the main

landing page.

• By systematically addressing the objections

uncovered in our research we got a 58% lift.

• Note that the winning page was a lot longer

than the control. We unpack it on the next few

slides.

• Lesson: Do not fear length—visitors will scroll,

especially on mobile. While there are situations

where shorter pages work better, it is hard to

address lots of objections on a short page.





Optimizely Screenshot Showing 35% More Sales w/ 99% Statistical Significance

• The 58% lift was attained in two

stages. 35%, followed by 17%

after optimizing for page load

times.

• The cumulative lift is arrived at

by multiplying them i.e. 1.35 *

1.17 = 1.58

• While this screenshot shows a

37% lift, we claimed 35%

because it fluctuated between

34% and 37 even after attaining

99% statistical significance.





We then got a Further 17% Lift By Optimizing Page Load Times

• The new page was quite a bit longer, so

its "fully loaded" time increased a lot.

• A combination of lazy loading, lossless

image shrinking, CSS sprites, and other

ninja tactics led to a further 17% lift.

• These optimizations reduced

the page load time by 40%

and shrunk the size by a

factor of 4x!





How We Did It: By Addressing Objections. Non-Buyers

Expressed the Following Objections

• Price is too high/product too expensive ($79

per insole vs. $6 for Dr Scholls)

• Not sure the product will work (because others

didn’t work before)

• Not sure it will work for my specific condition

(“my situation is unique”)

While there were about a dozen different

objections these were the main three. Here is a

link to the research we did on why visitors did

not buy:

http://blog.capitalandgrowth.org/wp-

content/Mouseflow-Feedback-Analysis-

Protalus.pdf





How To Address Price Objection

• When prospects complain about price it simply

means that they do not understand or

appreciate the product’s value proposition. They

are seeing this:

• To effectively deal with price, you must tilt

the scale so that it looks like this instead:

The product’s cost exceeds the perceived value The perceived value exceeds cost





Addressing Price Objection: Comparing

$79 Insoles to Custom Orthotics ($600 to

$3,000)

• Our research revealed that most visitors were

familiar with Dr. Scholls insoles which cost less

than $10. They could not justify paying $79.

• While Dr. Scholls was the reference point for

many, we also learned that some customers

had tried custom orthotics ($600 to $3,000)

and Protalus’ insoles compared favorably.

We therefore decided our core value proposition

would be:

“Avoid paying $600 for custom orthotics.

Protalus insoles are almost as effective but cost

87% less.”

...forcing the $600 reference point, instead of the

$10 for Dr. Scholls. This tilts the scale so perceived

value is higher than cost.





Addressing Price Objection:

Explained Why Protalus Insoles are

Different from Dr. Scholls

We addressed the elephant in the room:

Why should I pay $79 for a pair of insoles

when Dr Scholls cost $6???





Addressing Price Objection: Using ‘Price’ Testimonials to Reinforce Our Explanation

• Whenever possible, let others

do your bragging for you!

• It also helps to get

testimonials that address the

specific objection you are

trying to overcome.

• In this case, we found

testimonials that said Protalus

insoles compare favorably with

much more expensive custom

orthotics.





Addressing Price Objection: Breaking Down Price to the Ridiculous—

Comparing it to a Cup of Coffee per Day

• Here, we used a technique known as

“breaking the price down to the ridiculous.”

• $79 is just 44 cents per day, less than a K-

cup of coffee — which most people

consume once or twice a day! This makes

the price more palatable.





Addressing the ‘Not Sure It Will Work’ Objection: Using Doctor Authority

We prominently featured Dr. Romansky, Protalus’

resident podiatrist. A consultant to the US Men’s and

Women’s soccer teams and the Philadephia Phillies

baseball team, he has serious credibility!





Addressing the ‘Not Sure It Will Work’ Objection: Used ‘Expert Reviews’

We solicited and included expert reviews from industry and medical

professionals. Above are two of the four we used. These also helped

address the price concern because some site visitors had expressed

discomfort paying so much for an over-the-counter product without

doctor recommendation.





Addressing the ‘Not Sure It Will Work’ Objection: Re-Used Celebrity Endorsements

Since the celebrity endorsements increased the one-click upsell

take-rate by 60% (shown earlier) we also used them on the main

landing page:





Addressing the ‘Not Sure It Will Work for

Me’ Objection

• This is different from “Not sure the product will work” and needs to be

treated separately. Everyone thinks their situation is one-in-a-million

unique!

• We listed all the conditions that Protalus insoles address, as well as those they do not. In addition, we clearly stated that the product

does not work for 15% of the population.

• By conspicuously admitting this (NOT just in the fine print section!)

you are more credible. This is expressed in the Prospect’s Protest as:

“First tell me what your product CANNOT do and I

might just believe you when you tell me what it can

do!”





Putting It All Together: 58% More Sales on Main Landing Page, 91% More Direct Sales,

1,212% Growth

• The total cumulative lift was therefore

58% (1.35 x 1.17 = 1.58).

• With the earlier 21% sales gain from one-

click upsells, that's a 91% direct sales

increase (1.21 x 1.35 x 1.17 = 1.91) or

nearly 100% which would be 2x.

• But crucially, this gain allowed Protalus to

ramp up their ad spend significantly,

which contributed to the 1,212% revenue

growth.





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