– Misinformation is the biggest threat to ecommerce businesses, often perpetuated by software companies and agencies.
– Many commonly accepted beliefs in ecommerce, such as the importance of email revenue, SMS open rates, and first-time average order value, may not hold true in all situations.
– Personalization and acquisition through paid ads are not always the most effective strategies in ecommerce marketing.Invest in customer experience rather than relying solely on email, SMS, and discounts for retention and loyalty.The biggest threat to your ecommerce business is misinformation. The biggest proponents of misinformation come from software companies that are in the business of getting you to pay money for their software. The next biggest threat is agencies that recite what the software companies say. I say this as someone with a software company in ecommerce.
1. 30% of your revenue should come from email. Says who? What if you don’t run sales? What if you subscribe a lot of people via a giveaway who have no intention of buying and just like free stuff?
2. 98% of SMS messages are opened. Of course they are, you can’t get rid of them outside of either opening them to get the notification to go away or deleting the message.
3. Your first-time average order value (AOV) matters a ton. Does it? When someone is getting to know your brand, they usually start with a simple purchase that isn’t a high AOV. But while we’re on the topic, shouldn’t it be your first-time profit that matters, not the order value?
4. Customer acquisition cost (CAC) to customer lifetime value (LTV) should be your golden metric. If people knew the LTV of someone with any degree of accuracy over any degree of finite time period, I’d believe this. The thing is, they don’t and they are guessing. Also, again, should this be measured in “value” or “profit”? Those are two different things.
5. Retention and loyalty are the best way to do more with the customers you already have. Over 70% of people only shop with your store once. Retention has been bastardized to mean email and SMS, or loyalty with some degree of discounts to motivate people to come back and spend more. Take all that money in discounts and instead invest it into customer experience. We’ve covered this above, if you’re chasing revenue (a vanity metric), you’ll look good, but if you’re prioritizing profit (like a real business), then sales just cut out margin.
6. A subscription plan is worth more. Yes, if you have a subscription model, you can get a higher valuation. But unlike SaaS where the churn is over 18 months, the churn in ecommerce is closer to 6 months. It’s just not a good model for all businesses and products.
7. Personalization is the key to doing moreIt’s not, most things come down to reducing friction and creating transparency and timing. You can’t solve for these with personalization as we currently have it. Nike doesn’t have my sizes memorized and only shows me stock that’s in my size yet. So personalizing an email or SMS doesn’t really move the needle as much as companies would leave you to believe. Else personalization would give you 30% conversion rate, it doesn’t.
8. Acquisition can only come at scale from paid ads Ok so this is one that isn’t true but it seems to be the only way that brands thing about things these days and it’s a huge problem within the industry. It points out a larger flaw with the way we approach marketing when we’re surrounded by new technologies that have mastered grabbing attention and just push ads at those platforms.#ecommerce #marketing #strategyhttps://www.linkedin.com/in/jivanco