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How I advise eCommerce companies today big and small – it’s all about fundamentals Part 1

Please see the other posts in /r/startups or click on my username to see the other posts to see how to narrow down on a persona – I'm not going to bring this over to this post but the same general advice applies.

While building and preparing a go to market plan for my current SaaS product – I found myself talking to agencies and brands across the gamut involved in eCommerce. A world I previously lived in and currently consult in. As I was targeting both Agencies and Brands, some traits really started to show through, in general the lack of true understanding of the parts necessary to run a brand and how they all work together.

Most agencies and brands are good at a few specific things, rarely great at all of them. There is always room for improvement. We can all improve.

There's a massive trend in newer agencies looking to jump into eCommerce – tons of what they are tackling are the small things that lack process for brands. They tend to focus on one part of the equation, ads, website, social media, or email/text marketing.

If you read any of my other posts you'll know that I'm huge on process which unlocks automation. I'm also very big on data. The one thing I've noticed is pretty much everyone fails at the data collection step and understanding how to leverage it, understand it, and what to collect.

It lead me down the rabbit hole of really breaking down a process for a few clients on what it takes to build an ecommerce brand from a process and organizational sense.

Think Trello Boards, Google Docs, Checklists, Customer Flows, and Formats for every conceivable email that a brand would send. Even established brands have holes in their process when it comes to these things.

When you've subscribed to enough emails, gone through enough check out processes you start to see patterns of really easy fixes – but more importantly I get the impression that everyone is big on telling you what to look for and very poor and explaining the strategy behind things. Let's say attention to detail isn't the strong suit of many eCommerce companies.

I’ve looked at 1000s of websites and found a lot of the same issues across all of them from upstarts to known companies selling on shelves.

Besides working with current brands to understand their processes and flows, I previous ran marketing at a DTC then multichannel retail company that moved from Kickstarter, to VC, to exit with greater than 30% of revenue being driven by the direct website.

Things have even changed in the last couple of years since I we sold, things are adapting at a rate far faster than even I had anticipated. So rather than focus on tools, which are constantly changing and improving, instead this is meant to be a focus on methodology.

One thing has changed for the better – there are more tools than ever to collect and use data. But if you don't have a current strategy, create one from day one.

FULL DISCLAIMER:

I currently consult in ecommerce and run a company that functions as a data collection layer for ecommerce websites. We started the current company after consistently running into similar breakdowns while working with clients.

This guide is meant to help you understand the parts that go into successful ecommerce companies and where you should spend the bulk of your time from a marketing perspective.

This does not cover product, quality, QA, shipping, logistics, or any of those other business related functions.

Assumptions

We’re going to assume the product I'm making is entirely a commodity which means it can be copied and undercut price wise by any competitor given enough time availability of capital. This is true for 99% of all products out there.

What differentiates those that succeed and those that fail?

One word BRAND.

Building a brand takes time and takes a commitment to scaling as fast as possible in the beginning to build your most valuable asset as an ecommerce company: an email list.

An email list can be monetized, the larger the better. I would say this is even more important than driving revenue from the start. No one can take away your relationship with your customers.

Give me an email list – I'll make you revenue. No email list, I need to build one first.

The best email lists come with relevant data related to your industry/product.

The name of the game today is data, it affects everything, every ad decision, every website decision, every offer decision, just about everything.

As the max conversion rate you’re ever going to see is around a Black Friday super sale of 8% most of the year you’ll be around 2% so 98% of the people that visit your website will not end up purchasing. eCommerce is a game of small gains not large ones. If you don’t have data, you can’t break through and scale properly.

To this day the vast majority of brands can’t tell you “why” someone purchased. Even more so they can’t tell you why they didn’t purchase.

They also can't tell you why someone repurchased within a certain time frame and someone didn't.

Ironically, lots of brands lack any strategy or plan for answering these above questions. I know I’ve asked.

There is a formula and philosophy that will lead to success, it focuses on targeting, acquiring, learning, mapping, and automating – all centered around using data.

Let’s get into this:

There's step by step instructions to succeed –

  1. High Quality and differentiated product
  2. Great website look, feel, and usability
  3. A clutter free Product Page
  4. Ads to drive the initial traffic
  5. Customer Acquisition via popups and other methods
  6. Data Acquisition that goes along with #5
  7. Email sequences triggered based on behaviors
  8. Conversion
  9. Maximize Life Time Value via available products
  10. Introduce new products
  11. Partner with other brands

Throughout all of this we’re also going to look into doing versioning and testing, we should always be tracking data to see what is performing.

A huge caveat to this, if you don’t know enough about the traffic that you’re driving, doing a bunch of different versioning may show results, but there will not be a baseline to compare them to. There is a big difference between short term revenue gains and long term customers with high lifetime values.

Also on versioning, statistically speaking changing one thing can also affect other things and some correlations may not be directly attributable to the changes that you made.

Lead from a data perspective whenever you’re making a change and think about customer journey and experience first, it’s about more than just conversion when building a brand.

Let’s do this!

High Quality and Differentiated Product

Solving for the “why my product” question.

You have two ways to do this, tell a good story or have a feature that is better than what is currently available. I would suggest that you tell a really good story. Most of the time features alone are not enough and won’t check all the boxes, there are exceptions but very few.

Benefits > Features – keep this in mind as we go.

Think Instagram, not Lord of the Rings. We want punchy copy, not novels.

In a perfect world, if you make a great product, others will use social media to discuss the features that they prefer about your product – then just use their content to build your messaging.

In the market for most consumer products there are a ton of competitors. Some rush to the market and have quality issues, some have advantages in one area and deficits in others, you’re looking to find the best combination of the two to attract the audience that is aligned with what your biggest assets are as a company.

Very few companies are good at everything and still competitively priced. But there is always room in a market if you’re smart about your go to market strategy, you can always expand your base customer list as it grows.

How do you stand out? Your website. Scrutinize every word, tell every story, people want to be inspired to take action or aspire to be like someone you spotlight that has taken action, accomplished something etc.

There are two ways to think of stories.

  1. It’s not about what your product does, it’s what it helped someone else do or accomplish
  2. It’s not about features, it’s about how people use those features to accomplish something

That’s it.

Great Website. Look, Feel, and Story.

A great website for ecommerce homepage must accomplish the following:

  1. Hero Image that shows the product in use
  2. Mantra – something that is short that introduces the brand – not the product itself
  3. Product features with a focus on – differentiation
  4. Differentiation beyond a feature or material – the intangibles
  5. Overview of your available products
  6. Origin Story if you’re just starting out – About Page after you're established
  7. Links to stories of people that are using your product and tell their stories
  8. Social proof – these should be reviews with photos that all focus on multiple purchases
  9. Empathy for the shopper, it’s about putting yourself in their shoes
  10. De-risking the first purchase

Hero Image that shows the product in use

Depending on what you’re selling, this is your chance to have an image or a slide show or looping video, the goal is to have people understand what you’re selling and how it works within 5 seconds of hitting the page. Some people call this above the fold and it holds true.

People don’t like to think. It should be clear what you make and who uses it.

Mantra – Introduce what the brand stands for – NOT THE PRODUCT

Nike did it with “Just do it.” When you're starting out you are looking for a lead mantra or phrase that you can layer on top of your hero image that is short, sweet, and embodies what your brand stands for. This should be an action phrase, something that prompts action when possible.

If you do this right you’re just really proposing a question – for instance Just do it. Lead to a lot of people feeling like they weren’t doing something they should be doing, it promotes action. UnderArmour similarly has “I Will” which prompts the future of aligning yourself with the brand allows you to feel confident to do something. Affirmations are great catch phrases, when comparing these to other slogans like “Best Basics on the Planet” There is nothing aspirational about this it falls flat. It doesn’t tell you what having the best basics on the planet enables. It’s not about the product it’s about what the brand stands for and what you can do with the product.

It’s basic and simple but most brands miss this crucial point, it’s the difference between being a brand and being a collection of products. It also describes what they do, not what they stand for.

Product Features with a focus on Differentiation

How are you different, what makes you unique? So there are two camps on this – the first is sometimes you have nothing that actually makes you unique or different. You might use the same materials as your competitors, you might actually have the same exact product as someone else. Even if you have something you think is unique it’s usually not enough to hang your hat on it as in a lot of industries things are easy to copy.

If you are lucky enough to have something that allows you to stand out against your competitors, then this is the time to leverage it, if you don’t, use this space to list benefits to let people know you are on the same level as your competitors, we’ll use the next section to differentiate ourselves from everyone else.

Differentiation beyond a feature or material – the intangibles

This goes beyond brand. But this is the fundamental of what kind of brand you want to be. Focus on what you can offer or do that allows you to stand out against everyone else.

How do you do this?

Look at all your competitors in the space, look at how they are presenting things, look at the personas they are targeting, then look to a persona they are all ignoring. Unsurprisingly, there are a lot of brands that outwardly ignore personas that can be quite lucrative and instead chase the same personas as all their competitors.

So the intangibles. You’re looking to match your offerings with those that your personas value. This can take on a number of different forms. But in the back of your mind you must always be thinking about how to de-risk the first purchase.

This could be calling out a warranty, a guarantee, or something else that builds trust. A lot of brands were built by aligning with social causes, that’s great and all, but it’s largely played out as well. It’s like the analogy, we’re funding other countries yet 1 in 5 children go hungry in our own country. Seriously, if you take a local stance to improve conditions around you in your locality something that can be felt by those that are likely to be your customers, you’ll probably do a little better. Tangible benefits.

Overview of your available Products

Keep it simple stupid.

High quality images, clear pricing, and a quick overview of the item categories if applicable. This should read with the complexity of an In-n-Out burger menu. If you have a lot of products, you do this by doing categories. Just omit the prices. If you open a category see above, clear, easy to follow, include prices.

When you’re starting out let's assume you have less than 5 products but multiple variants of those products, spotlight the best selling variant and invite the user to click through to the product page. It should be clear what the product looks like. If it’s available in multiple sizes and colors and a price if applicable.

This serves only to let people know what you’re selling, they should have already got a good idea by your hero image and you should have built trust through your features and differentiation and even through your intangibles differentiation.

Origin Story if you’re just starting out

This should be front and center on the homepage if you’re just starting out, later we’ll move this to the About Page, but when you’re starting, you want to give a bit of background. Remember, it’s all about the story. In the early stages of any company you’re looking for people to buy into your story. People buy from people, they don’t buy from companies, when they first start out with a new company they are usually introduced to the company because of a story whether through news or through social media or through your own website.

Give people what they want, make it genuine, don’t over productionize it, look to connect with the personas you’re targeting. Be relatable. Video works well here, but isn’t required.

Keep it short, if you’re writing, it should be less than 100 words.

Links to stories of people that are using your product and tell their stories

The first question nearly everyone has when they are buying from a new brand is: do people like me currently use the product and how do they like it. We all look to belong and fit in. Our brains are trained to seek out tribes of people like us that do the activities we do and form bonds around those things.

Brands do the same thing, they look to connect with people that do the same activities, enjoy the same things, have the same style, etc. If you don’t stand for something then you stand for nothing and you never really make it to the status of brand, you’re just a collection of products.

A few years back we ran some tests with a company, in some of our emails we focused on products and features or sales. In another series though, we only focused on our customers and how they were using our products, who they were, what they did for a living, what they enjoyed doing in their free time, what they were passionate about etc. Then we just asked them for links to their social accounts and a few pictures of them using our products or doing things involving our products.

The result, these were the highest revenue driving emails we sent out other than massive sales by a landslide. Again, people buy from people, they aspire to be like others they can relate to and they form a bond based on seeing people like them enjoying or using the products that you are selling. (more on this in the email strategy section)

I can’t stress this part enough – this is the basis of building a brand is telling stories about the people who do cool things that others want to do and it doesn’t need to specifically be about your products, only what people were able to do in connection with them.

Social proof – these should be reviews with photos that all focus on multiple purchases

We know that social proof is all about handpicking a few reviews that sounds really good from people that know how to write. It’s still necessary. See the above section for how we blew that out of the water with a more advanced technique, but if you’re going to do social proof, make sure it’s from people that are repeat customers that bought in after making an original purchase.

The person that says you make the best product ever is cool, but it lacks emotion.

The person that says they have purchased multiple times and are glad they did, that’s your golden goose, those are also the people you want to talk to because they are approaching their Life Time Value and should be turned into advocates. More on that later.

So for social proof to be excellent, it’s not about the product again, it’s about what the product enables people to do, enables them to be etc. Some products are completely utilitarian, but even those enable great things; it's all about perspective.

Empathy for the shopper, it’s about putting yourself in their shoes

The last two elements go hand in hand. Trying a new brand or product is tough, it’s a leap of faith into the unknown, even if someone else has vouched for the product themselves, short of a person giving you the product to test (only works for certain products), it’s a commitment to purchase from a new company.

This is why your website needs to be on point, it has to spend the time to build trust, not bombard people with sign up forms (for first time visitors) and build a relationship that makes the person want to connect on a level that is deeper because they enjoy the type of content that your brand shares.

If done correctly, every customer should reach their Life Time Value spend with you, you wouldn’t send them offers and sales on things they’ve already bought would you? Then the same goes with over the top methods trying to get people to convert.

With customers there are only really two points that matter, collecting an email, then guiding them down a journey to let them know that you are there, when they are ready to purchase.

Scarcity and urgency don’t work nearly as much as people think they do when you have so many like competitors in a commoditized market.

People haven’t quite figured this out yet. Because people still haven’t figured out a way to figure out “why” someone actually purchased.

Alarmingly, this is a huge gap for all ecommerce stores.

De-risking the first purchase

The last bit for the homepage is to think of ways that you can de-risk a first time purchase.

The key ways are:

  1. A discount
  2. Free Shipping
  3. Free Returns
  4. Warranty
  5. Guarantee

A Discount

If you’re a new brand, starting out and you don’t have a great presence a discount is a must, first time, only time. With this, don’t have usual sales, too many sales will cheapen your brand and kill your brand value over time. It’s not until you have enough products that working through a good sales strategy will prove beneficial.

All sales should be provided to your email list only. Give people a reason to trust you with communication. More on this to come, lots of people don’t do email properly.

You should use sales strategically to clear inventory and add people to your email list. That’s it. Throwing seasonal sales and everything else shouldn’t be needed. Patagonia is a great example of a brand that only throws sales to clear inventory and they sell out quickly.

A good brand doesn’t need to use sales as a crutch to drive revenue. If you see a brand doing this it means there isn’t a good enough understanding of the customer journey or enough data to understand who is purchasing and why they are purchasing.

Free Shipping

I pay for shipping, when I get a discount or if there is a large enough sale going on for the item. From a psychological perspective shipping is only a detriment if it goes above a percentage of the item I’m purchasing. Rather than free shipping you could experiment with $2 flat shipping depending on your goods.

I watched though as shipping costs of a past company’s goods were really cutting into profit margins. You need to be strategic about when and how to use free shipping. The notion of doing free shipping over a certain amount is great, it works on me a lot of the time. But only if I’m close to the amount needed for the free shipping, if I’m not then I’m happy to pay for the shipping.

I don’t like paying shipping when an item is full price. This is a killer.

If an item is full price and you can’t do free shipping because of the cost, give me a flat rate shipping charge that is offset by your side. Like the above, if I don’t qualify for free shipping make it easy for me to know how much shipping will be rather than being surprised at checkout.

Ironically, this is a leading cause of abandonment and yet most stores would gladly pay part of the shipping in order to generate revenue.

Free Returns

Again psychology. If you expand your return policy to be 60 or 90 days the longer it goes the less likely people are to return things, they simply forget to do it, or depending on the price it’s not worth their time to do it. Doing free returns can be a double edged sword. For a lot of products you can return or exchange them, some people will take care of the costs for exchanges but not refunds. This is usually a store by store basis in terms of how to handle this and what your cash flow situation looks like. It also depends on the product itself.

In a commodity market, though, your competition has something similar on Amazon and provides really great service, it may be time to think this one through.

Example – Amazon has a 30 day return policy, if you double yours when they buy from you it becomes a bonus advantage.

The goal of any store is to work with the person to prevent the need for a return for a lot of items. The cost of putting the item back into stock vs it’s actual cost in comparison to shipping can make the whole process simply not worth it.

It’s really important when possible to understand why they want to return and make the appropriate changes on your website or workflow to prevent this reason from becoming a pattern among customers.

If there is a defect always request the item back.

Warranty

Warranties are pretty great, just exchange the product, they allow new customers to know that you stand by your product, they are something that allows people to purchase with confidence around workmanship and quality. Things that people want to believe are hallmarks of any brand that they buy from.

Word of mouth from a great experience with customer support always wins.

Guarantee

I separate these. A Guarantee goes more to branding than the practical nature of workmanship and product defects.

A guarantee says that we believe in our product so much that we make it part of our marketing.

It also allows you to get creative with copy while letting your actual warranty legal language spell out the details.

Clutter Free Product Page

All product pages should have the following:

  1. Description
  2. Materials
  3. Sizing / Dimensions
  4. High Quality Images
  5. Care Instructions / Use Instructions
  6. Shipping Information
  7. Warranty/Guarantee
  8. Reviews

When a person makes it to the product page, they’ve likely seen a thumbnail, seen the price, and are looking to dig a little further down to check out the product.

The next thing they are going to do is to make sure it checks all the boxes.

  • Is it available in my size / does it work for my house/use case
  • Are the materials what I’m looking for
  • What are other people saying about the product (this is a point where people sometimes leave your website)
  • Is this the best price available

You need to tell a story and de-risk a person purchasing as much as possible. The vast majority of people do not purchase the first time. So we shift our experience to ensure we can capture at least an email. This is the bare minimum goal as a store.

There's a lot here, if something isn't clear, or you disagree, that's what the comments are for, this is meant to be a discussion, an exchange of ideas. If you do disagree, tell me why you disagree, take the opportunity to be proactive with the discussion. I learn from all of you every time I put together a post.

Part 2 to follow. I'll update this post with a link when I post.

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