From big companies to small-town mom-and-pop shops to "mompreneurs" working from home, e-commerce is the key to keeping revenue streams flowing and businesses afloat. In fact, e-commerce is really the only way for you to ensure your business' longevity these days, especially if you are a small retailer.
Why? Because your customers don't always live in your neighborhood. You've got to understand your customers, then find them wherever they are in the world to deliver great value, products and services.
In today's market, small business owners need to make their e-commerce efforts a resounding success in order to survive. However, many business owners who want to take the leap to e-commerce -- or who have just started selling online -- don't know how to maximize their efforts. Here are seven things entrepreneurs need to be aware of to achieve e-commerce success.
Most people think they can't handle all the tech, but you don't need to know how to do everything yourself. There are easy-to-use tools that automate the technology you need (such as drag-and-drop sales funnels with built-in shopping carts).
Getting familiar with your options is an essential step toward clearing this perceived technology hurdle. Plug-and-play options are available for you and your unique business, so don't waste another minute thinking you have to learn to do everything on your own.
Purchasing online becomes easier and easier as the Internet evolves. Use opt-in incentives like free reports or an informative newsletter to gather email addresses, and start off your targeted marketing efforts by building rapport.
Facebook is a great place to begin, as it has excellent targeted marketing algorithms, and the email address you'll get via a social media opt-in path is much more valuable than one you might get through traditional email or other opt-in methods.
Once you've got your customer interested and opting in, your goal is to earn that coveted first dollar. Once you earn a customer's first dollar, you have the opportunity to really benefit from the current climate of Internet purchasing ease.
The first dollar is the hardest to get; after that, all the other dollars come much more easily, because you have built rapport. You now have a relationship with the customer, and you can nurture that relationship. You can build on that first sale and offer additional products and services to establish a sales funnel.
In sales and marketing, we talk about the idea of a "red ocean" and a "blue ocean." When people try to sell a product while competing with every other Tom, Dick and Harry out there, it's really hard to get any traction. That's what we call a "red ocean."
If you are operating in a blue ocean, your product or service is unique. Blue ocean products are those we see in our social media feeds and think, "Oh, yeah! That's exactly what I was looking for."
Your offering should stand out from the rest. It should have your customers answering a resounding YES when they ask themselves, "Does this product or service scratch the itch that I have? Does it fulfill my need and my desire?"
A quick way to get out of a red ocean into a blue ocean is through bundling. You've probably seen this on Amazon, where you decide to buy a product but soon are enticed by a bundle of complementary products or services. Soon you are no longer comparing apples to apples but apples to oranges.
The idea here is to separate your offering from the competition. What special bonus do customers get when they order from you? What do you offer that they can't get anywhere else, and that they can only get today, here and now, for a very limited time? This leads us to the next tip...
One common issue new e-commerce retailers run into is thinking in terms of one product. In other words, you might be thinking that your customer will come to your site and purchase just one product from you. This is a limiting mindset that is keeping you from making money!
Think about Amazon for a moment; it implements the perfect solution for this really well. When you add a product to your cart, it immediately lets you know that others who bought that item also bought certain other items.
What else might a customer or client need after buying your first product?
One of the best ways to boost your e-commerce business is to use a sales funnel that has a built-in order form bump or OTO (one-time offer). There are two metrics we spend a lot of time talking about in e-commerce: your cost to acquire a customer (CAC) and your average cart value (ACV).
The idea here is to focus on creating a "breakeven funnel." This is where your cost to acquire a customer is equal to or less than your average cart value. As soon as you can do this, you are actually getting customers for free. Then, you can continue to sell them more products.
The whole idea of a sales funnel is that you bring in the customer with a free or low-cost offer -- such as a product that is free plus shipping -- just to get their interest quickly. Once you've got their credit card information, offer them some sort of order form bump -- something that will help increase that average cart value. Then, before checkout is complete, present your customer with a one-time offer.
To get clearer on how this works, think about McDonald's. When you pull into McDonald's and you order a hamburger, the very next thing you're asked is whether you'd like fries and a Coke with that. If it costs McDonald's $3 to get you to the drive-through window and it only charges $3.25 for the burger, it's only making 25 cents. Where it makes all its profit, though, is on that upsell -- that fries and a Coke.
Think of how customers act in e-commerce as identical to how they would act at a physical store. If they come in for one thing, you're going to ask if they'd like anything else before they cash out. Think of a grocery store. These days, you practically have to go through a maze of gum and magazines and candy bars to get to the register. Those are there for a reason. Those upsells work the same way in the physical world as they do in e-commerce.
Once you have that first dollar, you have customer trust. If you understand your customer's journey -- that a certain percentage of customers who bought one thing will take you up on your next offer -- then you can create a sales funnel that is customized to offer multiple products.
Last but not least, make sure you get your product or service to your customer as quickly as possible. We live in a "microwave society." Everyone wants to push a button and have it done in 30 seconds.
The faster you ship products to your customers, the more quickly their "itch" is satisfied and, typically, the faster they'll come back to you.
The main thing any e-commerce seller has to understand is metrics. Know your cost to acquire your customer (CAC) and your ACV (average cart value -- the money spent by the customer).
Whoever spends the least to acquire their customer wins, so find ways you can bundle, add OTOs (one-time offers), and increase your ACV to mitigate your CAC and see profits.
When it comes right down to it, it's about the numbers. If your average customer spends more than you've spent to acquire them, you will make money.
The more value you add -- through freebies, upsells, and add-ons -- the more trust you'll build with your customers, and customers who trust you will spend more. They also are more likely to refer others to you, boosting your business even further.
Know your metrics, find creative ways to increase your average cart value, and you'll be well on your way to e-commerce success.