What to do when your site revenue drops!

Author

Jessie Healy
November 13, 2024

Hey Founder,

We have all been there, that sinking feeling when your site revenue keeps dropping but you don’t know why. You keep refreshing your Shopify dashboard wondering WHY IS IT SO QUIET?

Today I want to share with you a step-by-step framework for diagnosing this problem when this happens - it can be applied to any size business - I just applied it to an 8 figure business, but it also works if you are just starting out.

Step one: which lever is down?

The first step is to figure out which of your three main levers is the problem. Its usually one of the three, try to hone in on one so you can go deeper.

The three levers:

  1. Conversion rate. Look at GA4 for this.

    Is it down just for ad traffic or across all channels?
    If it is all channels - what have you changed on your website? Is this seasonality - check last years data.
    Come up with a working theory as to why it might be town, fix the main cause of this and observe your data.

  2. AOV (average order value) - Look at Shopify data for this.

    If it is down this is your culprit.
    Why might it be down? Has your product mixed changed? Are you out of stock or sizes?
    Did you stop offering free postage or bundles?
    Look for ways you can fix this issue, make the change and observe the result.

  3. Traffic volume - look at GA4 for this.

Look at your total sessions compared to last month, or last year.

If this number is down more than it should be for the season, then you know you have to do some more digging as to why? -

Proceed to step two. 👇

Step two - diagnosing a drop in traffic.

If your traffic is the cause of your revenue drop, you have a few more checks to figure out why it has dropped.

Find out which traffic sources are down in terms of traffic and/or revenue -

Use GA4:

Go to the referral report: Navigate to Traffic Acquisition: On the left-hand sidebar, select Acquisition > Traffic Acquisition.

Look at sessions by traffic source. Switch on ‘compare previous period’ and scan to see what source is down.

*Is it organic search? If yes, what have you changed in that area, what do you need to fix? Have you made a tech change that is blocking performance?

*Is it email traffic? If yes, go check Klaviyo/email platform to find out why

*Is it direct? - what have you done differently in your brand or PR marketing that might lead to less people seeking you out? Fix that and observe the change.

*Is it Meta or Google traffic or revenue that is down?

Go to Step Three 👇

Step Three - diagnosing Paid traffic problems

So now we have eliminated conversion rate or AOV as the problem, and all our other traffic sources are stable. We have a paid traffic problem!

I bet you are wondering? Why didn’t we just look at paid traffic first?

The reason is I think it is really important to look at overall site trends first, before diving in to blame Meta or Google ads.

But - if you have got this far it is because they are, in this case, the problem!

How to diagnose a problem with Meta Ads

If you have spent the same for a worse result - then you either have a problem with traffic cost, or traffic quality.

*Check your CPC (cost per click) and CPM - if they are higher than usual you have a traffic cost problem.

*Check Conversion rate - if this is lower than usual then you have a traffic quality problem.

For both of these problems, the solution is often your creative.

Great ad creative will give you lower-cost traffic (higher CTRs) AND prime people to buy when they do get to your site!

Here are some soft metrics you can look at to diagnose which creatives are doing a good job and which need improving:

*Hook rate - percentage of people that watch more than 3 seconds. Aim for over 20%

*Click-through rate - percentage of people clicking on your ad - aim for 1% or more.

*Add-to-cart rate - see how this compares to your usual ATC rate and if it is down this is an indication the ad and website are not doing a very convincing job.

Once you know which creatives are doing well vs which are not-so-good you can devise new creative that can hopefully improve your traffic cost and quality problem!

Need help?

If this was all a bit much to take in - I get it, analysing numbers like this can be really hard if you are not used to it.

Let’s jump on a call and figure it out together - I am told I am pretty good at making numbers clear to people.

x

Jessie