Diagnosing a Plateau

Three numbers, three different problems

Revenue is traffic multiplied by conversion multiplied by average order value, plus repeat purchases. When revenue flattens, exactly one or two of those is usually responsible.

• Traffic flat: a marketing and visibility problem
• Conversion flat or falling: a store problem
• Repeat purchase flat: a retention or product problem

Spending on advertising when conversion is the constraint is the most common and most expensive misdiagnosis.

If traffic is the constraint

1. Check whether one channel has declined while others held
2. Look at what search terms you rank for and what you do not
3. Consider whether your product pages answer the questions people search
4. Assess whether paid acquisition is still economic at your margin

If conversion is the constraint

Look at the funnel: product views to cart, cart to checkout, checkout to order. Each step has different causes, and the weak step tells you which project you actually have.

Product to cart is a product page problem. Cart to checkout is usually delivery cost. Checkout to order is payment or friction.

If repeat purchase is the constraint

Customers buying once and not returning is either a product problem or a communication one. The first is uncomfortable and important; the second is straightforward to fix.

Ask a sample of one-time customers directly. A short email asking why they did not come back gets more honest answers than any analytics.

Fix the constraint, not the comfortable thing

Businesses tend to work on whatever they enjoy or already understand. That is why a store with a conversion problem ends up with a new advertising campaign.

Identify the actual constraint from the numbers, then work on that even if it is the less appealing project.

Frequently asked questions