Improving CartHook’s Growth Strategy by Boosting ARR by $217,500/year
Auditing CartHook's Growth Strategy
This may surprise you, but the title isn’t entirely accurate. It's well under the actual numbers.
With this growth strategy, I expect CartHook to make over $6.4 million a year with their latest price increase.
There’s also $217,500/year I estimate CartHook will gain by creating a content hub. And another $413,250/year by creating landing pages for their product keywords.
That said, I do not like to over-promise. So if I can show you this growth strategy will help CartHook grow $217,500/year, I think you'll agree that this piece is worth a few minutes to read.
If you’ve read previous growth strategy audit’s I’ve written, you know I do not estimate every strategy. That’s because it’s not easy to do so without looking at what’s happening behind-the-scenes.
Needless to say, you’re in for a treat with this growth strategy teardown.
The Good: CartHook’s Pricing Strategy
CartHook is fanatical about price testing from day 1. And it’s one reason they’ve experienced such explosive growth.
CartHook first launched on ProductHunt with a price point of $49/month. The most upvoted comment felt the price was too high:
But that did not stop CartHook from charging more as they increased their value. Soon after their ProductHunt launch, CartHook had three pricing plans:
There is also a higher-priced enterprise plan.
Does this price sound crazy to you? Yet as demand surged, Gal eventually tripled CartHook’s price.
But clever co-founders might notice something more important.
Gal did more than test his price point. He also experimented with how CartHook charged customers.
Around June 2019, CartHook announced yet another new pricing change. The old pricing model was $300/month + $100 for every $100,000 they processed. At some point, Gal switched to a subscription plus commission-based revenue model. (Source)
According to their website, they processed over $612 million.
For simplicity’s sake, let’s assume CartHook processed $300 million using the new pricing model. That’s an extra $300,000 by adding a transaction fee!
But if you read the announcement, the new price is now at $500/month + 0.5% on all revenue processed.
At their new price-point, CartHook’s revenue may increase an extra $6.4 million or more per year.
Here’s how I arrived at that number:
- CartHook has at least 2,000 customers. In the above picture, CartHook says “Join thousands of Shopify store owners who have processed over $600 million using CartHook.” While I don’t know the exact number of customers, let’s assume CartHook has 2,000 customers.
- The new price will result in losing 100 customers. Let’s assume 5% of CartHook customers will not continue at the new price. This means they will lose 100 customers (2,000 X 5% = 100), leaving them with 1,900 customers.
- The extra $200/month will result in $4.56 million/year. 1,900 customers paying an extra $200/month is $380,000/month, or $4.56 million/year.
- The processing fee difference is 0.4%. Let’s also assume each customer processes $250,000/year through CartHook. Instead of receiving $100 per $100,000 processed, CartHook now receives 0.5%. For simplicity’s sake, I’ll use 0.1% for the old price-point. That’s a difference of 0.4%.
- The processing fee increase will result in $1.9 million/year. With 1,900 customers processing $250,000/year each, CartHook will get an extra $1.9 million/year in new revenue (1900 X $250,000 X (0.4%) = $1,900,000).
$4.5 million + $1.9 million = $6.4 million = A lot of extra money for one brave change.
While these are rough numbers, you can see why optimizing your price makes a huge difference.
Naturally, you cannot increase your prices without adding substantial value to your customers. And reading CartHook’s announcement, that’s their goal.
What I’d Do Next:
Because CartHook is in the middle of a pricing change, there isn’t much more to do. Their number one priority is to add more value so more current customers pay the new price.
The Good: CartHook’s Positioning Strategy
Here is the first headline you see when you visit CartHook’s website:
“Maximize Conversion Rate and Grow Average Order Value Today” is a solid benefit to the customer. What e-commerce store owner doesn’t want more conversions and increase their order value?
That said, this statement doesn’t communicate why someone would choose CartHook over their competitors.
From my analysis, this isn’t a terrible position because CartHook’s market is newer. As a result, all you need to do is communicate a clear benefit to get people to buy.
For example, do you remember RedBull’s advertisement slogan when they first came to the United States?
“Red Bull gives you wings.”
It’s a solid benefit statement but does little to share their brand’s position. Red Bull could do this because the energy drink market was new in the US.
By 2009, an estimated 956 energy-drink brands had launched in the US. With an evolved market came an evolved brand strategy.
During this rapid growth, Red Bull sponsored extreme sports athletes and created their own extreme events and stunts. As a result, they became associated with this high-intensity lifestyle.
What I’d Do Next:
CartHook has the upper-hand now because they had the first-mover advantage. If CartHook wants to take a proactive approach, they should establish their position now while they have a solid lead. Then as the market continues to grow, it will become that much harder for a competitor to upset them.
As a minimum, CartHook should keep an eye on their competitors. More competitors create more confusion and lost sales without a compelling position.
The Bad: CartHook’s Integrations and Partnerships Strategy
One of CartHook’s major growth channels early-on was to integrate with other tools. CartHook would then get new customers as the partner announced the integration to their customers.
Shopify is one of CartHook’s biggest integration partners. Yet after a quick search, CartHook does not appear in Shopify’s app store:
If you recall from my interview with Jay Myers, this integration was massive for Bold Commerce’s growth.
I’m also surprised CartHook is focusing solely on Shopify. Gal mentioned in his interview CartHook was first built for Volusion, Magento, and Shopify owners.
It’s possible they are niching smaller to strengthen their position.
Keeping up with many integrations is expensive and time-consuming. That said since one customer pays $500/month + 0.5% of revenue processed, I doubt money is an issue.
What I’d Do Next:
While the value of being an early adopter is not there, CartHook should invest time into getting on the Shopify market. Once on the store, they can ask their customers to give them an honest review to increase social proof and traffic to their app.
If CartHook isn’t niching to a smaller market, they should integrate with bigger e-commerce platforms.
The Ugly: CartHook’s Content Strategy
Content marketing is a powerful tool for your belt. When done right, it will:
- Generate high-converting traffic through SEO.
- Educate the market about your position and become better-paying customers.
- Increase your brand’s authority and thought leadership.
Unfortunately for CartHook, a lot of these elements are missing.
First, there isn’t any united theme to their blog. Look at CartHook’s blog and you’ll see their content is all over the board. (Source)
If I were to bet dollars-to-doughnuts, this is because they need a full content strategy. Further, I would double down the reason for this is they are taking a PPC-first approach to their content. I’ll explain more about this in a moment.
Some of CartHook’s content is around e-commerce landing pages. Other articles share the latest company news and integrations. For someone visiting CartHook for the first time, this may cause confusion. Not to mention it will make their blog look self-serving.
Like a company, an effective blog should also have a clear position in the customer’s mind. If you want loyal readers to convert to loyal customers, you should know why someone will read the articles on your website. The same goes for video, podcasts, or any other content.
- If you want to learn about SEO, it’s likely you will go to Moz, Backlinko, or Ahrefs.
- On the Growth Ramp blog, you’ll find articles on early-stage growth strategy.
- You’ll check out ConversionXL or Unbounce if you want to learn about conversion rate optimization (CRO).
Second, almost all of CartHook’s titles could use some polish to get more people to read. The only exception is their case studies, which give a strong financial benefit. (Source)
Take a look at these titles from their blog:
- Fraud Prevention Tips Every eCommerce Merchant Should Know
- How to Design a Dynamic Thank You Page for Better Customer Service
- How (and Why) to Optimize Your eCommerce Checkout Experience
These titles lack specific examples, there are very little power words to captivate a reader, and they’re filled with exaggerations.
Here are the questions I have that prevent me from clicking these titles:
- How many preventions tips are there? Why should every e-commerce merchant know these tips? Are these tips covering all types of fraud?
- How much better will their customer service improve?
- What results should I expect when optimizing the checkout experience? Shouldn’t everyone know why they want to optimize the experience, to make more sales?
Here are some headline suggestions:
- 12 Fraud Prevention Tips to Reduce Credit Card Scams by 40%
- This Dynamic Thank You Page Reduced Customer Service Calls 17%
- My Step-By-Step System to Optimize the eCommerce Checkout Experience
The content will need to back up each claim in the title. Even if they removed the data points, the title would be more compelling.
Third, CartHook should consider building a content hub.
A content hub is a collection of articles related to a single main topic.
For example, let’s say I wrote an article on “branding positioning.” I could then write articles on “brand positioning examples,” “brand positioning strategy,” and “brand positioning map.”
Content hubs add massive value to your business because:
- Customers often need multiple touchpoints before buying from you.
- Linking articles together helps improve SEO. As a result, high-value keyword phrases you normally cannot rank for become within reach.
- It increases your branding on that topic.
Once you’ve built a content hub, there are many ways you can repurpose the content.
This allows you to get more traffic for very little extra effort. For example:
- Turn the content hub into a book. Books are an excellent sales tripwire to increase your odds they will buy your core product. You can also get high-paying speaking gigs through a book too.
- Turn the content hub into a video series. And if your articles all rank in Google, you can embed the videos into your posts to kick-start your traffic.
- Turn the content hub into a podcast. Some people prefer audio over written content. Especially those who are driving in their car.
- Share the content hub on other platforms. Traffic on your website is the best way to get more leads and sales. But other platforms allow you to tap into new audiences. And if you’ve linked the articles together, this can also be a decent way to increase your SEO traffic too. Some common platforms to do this are Reddit, Medium, Quora, Facebook, and LinkedIn.
- Turn the content hub into an infographic. When done right, infographics are powerful to share information in a concise manner. You can also use them to build links to your website, which improves your SEO traffic.
Here’s a potential funnel for CartHook:
- The main keyword phrase they will target is “ecommerce marketing.” This phrase and other keywords in this group get about 6,640 searches/month.
- Topic 1: “ecommerce conversion rate.” This keyword group gets about 2,770 searches/month.
- Topic 2: “checkout page.” This keyword group gets about 2,420 searches/month.
- Topic 3: “product page.” This keyword group gets about 5,520 searches/month.
- Topic 4: “ecommerce ux mastery.” This keyword group gets about 420 searches/month.
- Topic 5: “ecommerce conversion funnel.” This keyword group gets about 3,340 searches/month.
- Topic 6: ecommerce sales. This keyword group gets about 1,810 searches/month.
- Topic 7: ecommerce marketing strategies. This keyword group gets about 4,910 searches/month.
This content hub may be worth $217,500/year.
Here’s how I came to that estimate:
- The hub gets 27,830 searches/month and 22,800 clicks/year. These pages will get about 9% of the clicks averaging a search position of 3, or 2,504 clicks/month. (27,830 searches X 9% = 2,504 clicks/month). Or 30,048 clicks/year.
- CartHook will get 30 customers/year. 2% of these customers will join their email list, or 600 email subscribers/year. And 5% of email subscribers will become customers. That’s 30 customers per year.
- Their customers will stay on for 12 months. The typical SaaS churn rate is 3-5%. This means the average customer lifetime is 20 to 33 months. So it’s not unreasonable to expect that their customers will stay on for 12 months. At $500/month, that’s $180,000/year. If these stores process $250,000/year, CartHook will get an extra $37,500 in processing fees ($250,000 X 0.5% processing fee X 30 stores). Or a total of $217,500/year.
This added revenue does not account for any book sales, speaking fees, or added traffic by repurposing the content on other platforms.
What I’d Do Next:
First, CartHook should create a full content strategy that answers these questions:
- Who are we writing this content for?
- What questions do they have that is relevant to our product?
- Why should they read our content?
- How will they find our content?
Second, CartHook should consider investing in a copy-focused editor. They have in-depth content. But I’d bet they are missing on a lot of engaged readers because the titles are lacking pizazz.
Third, unless it’s used for PR, I would keep announcements only for the customer and blog email list. If they do use the announcements for PR, I would put the content in a separate section of their website to increase their blog’s positioning.
Finally, I’d invest in building a content hub. That’s potentially $217,500/year left on the table. Once all the content is live, the possibilities for growth only go up from there.
And once CartHook created their first content hub, they could do the same with another content hub.
The Ugly: CartHook’s SEO Strategy
SEO is the gift that keeps on giving.
While it often takes longer to get results than PPC, you don’t need to keep spending money to enjoy the benefits of SEO.
Here are some major changes I’d make to CartHook’s SEO strategy.
Create Product-Focused Keyword Pages
From what I observe, CartHook offers three major solutions to store owners:
- One-page checkout.
- One-click upsell.
- Landing pages.
Building these product keyword pages may be worth $413,250/year.
Here’s how I came to that estimate:
- These three pages get 5,290 searches/month and 5,713 clicks/year. “One-page checkout” and related keyword phrases have an estimated search volume of 1,620/month. “One-click upsell” and related keyword phrases have about 1,590 searches/month. And “shopify landing page” and related keyword phrases have about 2,080 searches/month. At a 9% click-through rate, that’s 5,713 clicks/year.
- CartHook will get 57 customers/year from these pages. Because these are high purchase intent keywords, 1% of these customers will become customers. That’s 57 customers per year.
- Their customers will stay on for 12 months. At $500/month, that’s $342,000/year. If these stores process $250,000/year, CartHook will get an extra $71,250 in processing fees ($250,000 X 0.5% processing fee X 57 stores). Or a total of $413,250/year.
$413,250/year is a lot of cash-money.
What I’d Do Next:
I would create pages that dive deeper into each part of their product. Further, I would write educational articles for the blog to get people who need more education before buying.
Adding SEO to CartHook’s Content Strategy
As I stated earlier, I believe CartHook’s content strategy is PPC-first, rather than SEO-first. Take a look at their Facebook ads:
These ads all drive traffic to their blog content. This is a good approach if you don’t have someone focused on content promotion or SEO. As I’ve written on the Growth Ramp blog, PPC is one of the five inherently scalable channels.
But unless you want to keep paying Zuckerberg, you need an SEO-first strategy.
Look at this article: Your Product Page Sucks – Here’s Why (and What You Should Do About It)
As an aside: While the title grabs my attention, I’m not a fan of titles which devalue the reader and make them feel worthless. Low clickthrough rates will also decrease a page’s average rank in Google.
Unless CartHook wants to rank for “product page,” there is no clear keyword phrase that will bring in organic traffic.
You can figure out what keyword phrase an article targets by seeing if the phrase appears in key parts of an article. This is known as on-page SEO.
Here’s how to figure out an article's on-page SEO:
1. The meta title.
The meta title is the title that appears when you search in Google. The meta title for this page is, “Your Product Page Sucks – Here’s Why (and What You Should Do About It) - Carthook.”
Here’s what it looks like in Google:
Ideally, the meta title should have the keyword phrase in the title.
If possible, it should be near the beginning of the title. It’s also best to have no words between the phrase, or very few extra words.
“Product page” fits this pattern, but the keyword phrase is difficult to rank in Google.
“Product page sucks” also fits this pattern, but there is no search volume when I checked Keywords Everywhere or Ahrefs.
It’s considered “best practice” to not have the title cut off.
I have never seen a compelling test to explain this practice. But it seems logical to do so because the reader cannot finish the thought without clicking the article.
2. The header 1 (H1).
The H1 is almost the same as the meta title: “Your Product Page Sucks – Here’s Why (and What You Should Do About It).”
This tactic is common for many bloggers.
There’s nothing to add to the first point other than saying this also affects SEO.
3. The header 2s (H2).
Each page should have only one H1. But you can use many different H2s to help break up the article and help rank in Google.
The H2s for this article are:
- The Nuts and Bolts of CartHook Landing Pages
- The Problems Ecommerce Landing Pages Solve
- CartHook Landing Pages in Action
- CartHook Landing Pages for Post-Purchase Upsells
- FAQs About CartHook Landing Pages
Do you see “product page” in the H2’s? Me neither.
That said, Google is smart. It knows that “landing pages” is similar to the phrase “product page.” But it isn’t the same keyword phrase.
I take a customer-centered approach to SEO. This means:
- Because the words are similar, Google will give some credit towards the phrase “product page.” If you can see these words are similar, then Google’s bot will too.
- Because the words are not the same, Google will not give full credit as a page using “product page.” It’s easiest to remember one word or phrase. So from a brand perspective, it’s better to use the same keyword phrase when possible.
If CartHook had a higher domain authority, using similar phrases in H2s can help you rank better for those keyword phrases. But CartHook isn’t in this stage yet. (Source)
Different SEO experts have different takes on the importance of using the exact phrase compared to a similar phrase. So take my advice with a grain of salt.
4. The meta description.
Below the meta title is your meta description. It looks like this:
I’m not aware of an easy way to check the meta description. Further, it’s not uncommon for Google to choose a meta description for you.
Here is what I found when I Google’d “SEO pricing”:
This text came straight from the article’s introduction. If you notice, the phrase “SEO pricing” appears in this meta description.
And here is what I found when I Google’d “SEO pricing packages”:
The second example is what I told Google to use.
It’s better to have your keyword phrase in the meta description than not at all. If not, including the phrase in the article is valuable too.
5. The page URL.
The page URL should also include the keyword phrase or a shorter version of it.
This article’s URL is, “https://carthook.com/blog/your-product-page-sucks-heres-why-and-what-you-should-do-about-it/”.
This page has the keyword phrase “product page.” But it’s too long.
It is rarely worth re-creating this page on a new URL and redirecting traffic to it. That said, it’s worth keeping this in mind for future articles.
This also signals the content strategy isn’t focusing on SEO.
6. The rest of the article.
Google’s bot will also look at the full article to see if it is relevant to the keyword phrase.
Assuming you are writing in-depth articles, I wouldn’t worry about this point beyond using the keyword phrase in the introduction. Even adding the phrase may not make a difference to sweat the detail.
Improve CartHook’s Homepage SEO
Like what I said about their content strategy, CartHook should improve the on-page SEO for their home page.
Right now, the meta title is “Carthook - Carthook”.
At least no one will outrank them for their branded keyword anytime soon…
CartHook should use the meta title to target a relevant keyword phrase (or two) or establish their brand’s positioning. Ideally, the meta title does both.
The keyword phrase should also be in the H1.
What I’d Do Next:
CartHook should hire a content strategist or an SEO expert to improve their on-page SEO. A quality SEO expert should get more organic traffic in 2-4 weeks. From there, its full potential should peak in 6-12 months.
The SEO expert should make sure every page targets a specific keyword phrase, especially the home page. A couple of relevant keywords I found are “product page design” and “Shopify product pages.”
The last phrase is especially valuable if CartHook is niching to serve Shopify customers only.
Even if you do not have a software product, there are a lot of opportunities you can apply to your business.
For example, after creating a content hub for Growth Ramp, I turned those articles into a free business course.
After running a growth test from this article, you can always check another article in our growth strategy series. Keep testing ideas until you’ve created a scalable startup.
This growth audit is a sample of our full Growth Ramp Gap Analysis™. Click here to learn about our Gap Analysis Procedure™.