By Omer Rachamim's estimate, there are between 12-24 million e-commerce shops around the world, but only a mere 2.7-5.4 percent (650,000 stores) earn more than $1,000 in annual revenue. Frankly, few online businesses are good at figuring out how to generate meaningful sales. While the stats may be discouraging, it's not impossible for e-commerce companies to launch, grow and thrive.
To help both new and mature brands multiply their sales through marketing, here are five important strategies that we've used with our clients to sell millions' worth of product every year.
Convert the Right Customer
Many thoughtful marketing campaigns make the mistake of targeting too broad of an audience. Instead of speaking directly to customers who are already interested in your product, most businesses aim to drive loads of visitors to their website who never actually convert. Often, they get obsessive over the wrong metrics, including their website's overall conversion rate. Instead of taking a macro approach to marketing, e-commerce brands should look at micro snapshots of how different audiences react to their offers.
The most successful e-commerce companies segment their visitors -- and conversion rates -- by traffic source and invest in creating unique experiences for each of their distinct audiences.
Do Social Media Differently
In the late 2000's, social media arrived with the promise of allowing brands to reach a massive organic audience. The idea was that brands could save thousands -- and in some cases, millions -- by building engaged, homegrown followings on social media. So, they advertised their Facebook and Twitter accounts, accumulating millions of fans and followers. Then, organic reach plummeted and marketers were up in arms. Companies with 100,000 likes on Facebook were lucky if, on average, they received a dozen interactions on their social media posts. What was once a highly profitable marketing channel has become an incredibly expensive way to engage customers.
So, what e-commerce brands can do now is advertise using Facebook's, Twitter's, Pinterest's and LinkedIn's sophisticated advertising platforms to target consumers that are mirror images of their ideal customer. That way, they can consistently reach social media users as organic reach further dwindles. Companies can also leverage others' followings by sponsoring influencers and partnering with like-minded brands.
Strategically Spend on the Holidays
During the most recent holiday shopping season, consumers spent a whopping $630 billion on gifts for friends, family and themselves. At the same time, advertising costs skyrocketed due to increased competition. In fact, the data suggests CPMs tend to increase 70 percent after Thanksgiving.
To take advantage of the shopping frenzy, e-commerce companies should plan ahead and begin advertising their holiday promotions early. By launching ad campaigns up to eight weeks ahead of the holiday season, brands have the opportunity to test and optimize their creatives. This way, when shoppers are finally ready to purchase -- and media costs nearly double -- marketers mitigate their risk in overspending on underperforming ads and, ultimately, outshine the competition.
Use Coupons and Content to Win Over Customers
- Distributing coupons
- Creating fun or educational articles, emails, videos or infographics
With coupons, companies can convince first-time buyers to convert. Studies suggest that promo codes prevent 57 percent of shoppers from abandoning their carts. Discounts can also be used to re-engage customers who haven't visited your store or purchased from you in a while. With content, e-commerce stores raise brand awareness, boost SEO and soft sell their products.
Commit to a Longer-Term Strategy
Generally, e-commerce marketing plans fall apart when management teams are committed to making fast money. When brands first start marketing themselves, they have the unrealistic expectation that they'll earn $10 for every dollar they invest. But for the first few months, they should aim to earn a dollar for every dollar spent. That way, they prove that marketing can be an effective way of growing their business. Afterward, they can work to aggressively optimize their creatives and overall strategy, so that 12-24 months later, they may reap huge rewards from their marketing investment.
When companies lose patience and prematurely abandon their marketing strategy, they sabotage their own success. With a firm commitment to the process of building early creatives, testing different marketing channels and consistently optimizing their strategy, e-commerce brands turn marketing into their most effective customer acquisition and retention channel.
Eric Samson is the founder of Group8A, a boutique consulting firm focused on developing and executing integrated marketing and digital solutions for companies of all sizes.