Maximizing ROI of Great Product Data

The secret to getting a good return on investment is tying the investment to the opportunity. So we start with 2 rules:

1. Never overinvest
2. Invest in stages

Unlike investing in a new website or new site search software, improving your product data is not an all-or-nothing affair. By applying the 2 rules above and focusing on ROI sweet spots it is impossible not to get a positive return on your investment.

To identify ROI sweet spots we will discuss with you:

• Where are you making most of your Gross Margin Dollars? Because of better gross margin (%), higher prices, and popularity it’s often the case that 10% to 20% of your product categories account for 80% of your Gross Margin $.

• Which product categories have high margin but which you feel are underselling?

• How does the conversion rate vary across your product categories? An “average" is a very useful measure but it always hides what’s going on “beneath the surface.” If your average conversion rate is 2%, are your highest and lowest 10% and 0.1% or 4% and 0.5%?

We’ll then estimate with you how much of a performance improvement is likely. This estimate can be rough and based on your general knowledge or we can look at a competitor’s site and compares the Search & Find > Understand > Decide & Buy process on that website with yours, including independent user testing.

Armed with these estimates, we can put an initial ceiling on how much should be invested in product data. Our pricing structure is transparent but establishing a ceiling for initial investment makes sure that the focus is on the big levers and that polishing is left to subsequent stages. For example, if you have unstructured product data with no attributes, we can pull out the 2 or 3 attributes that will be most helpful to your customers in filtering their searches rather than creating 5 or 6 attributes.

Our rule-of-thumb is that initial investment should be 25% to 50% of estimated potential. The proportion of your products that should be processed in the first investment stage will largely be dependent on how many products you have. Our pricing reflects our costs and it is more costly to process small numbers of products. If you have 5000 or less products, we may recommend that we process 80% or more but limit the investment to the low end (25%) of the estimated potential. If you have more than 50,000 products we can start with 5,000 where the upside is greatest and invest up to 50% of the estimated potential.

We’ll be adding a questionnaire here that can both produce an estimate of ROI and an initial focus for investment in product data. In the meantime, please contact us directly for a brief discussion and quick analysis.