How To Analyze Your eCommerce Business and Growth – 2019 Review
Welcome to Surge. This week we will talk about different ways to analyze your eCommerce business and how well you did in 2019. Some of this has to do with profitability or operations. When we look at our clients’ metrics for an entire year, we look at specific executions and we look at specific numbers that are going to make the difference for what kind of strategy we should follow in the next year, which is 2020.
Analyzing your eCommerce Business in Real-Time
When we look at our clients right now and we’re going through this process, what are we looking at?
Let’s break it down first. Obviously, you have the eCommerce elements: development, marketing, and growth opportunities. How would you break this up? What do we look at with our clients when we’re looking at their platforms or their development capabilities and what kind of held them back and what helped them to grow in 2019?
Did the technology that we’re currently using hold up? If so, did we outscore our current technology? You typically see that your technology or the platform that you’re using.
If you start to increase your volume, you’ll start to choke and it starts to affect every other aspect of your operation, from your internal operation to your sales and revenue. Is your technology up to par or do you need an upgrade?
In 2019, as Optimum7, we probably worked on over 600 platform migrations when it comes to eCommerce, and remember, the technology now is dynamic. So the technology is moving and increasing and your business is changing and increasing. And there are hundreds or platforms that you could pick or choose from. There are thousands of functionalities that you might need on your site.
Let’s say you’re on Magento. You’ve got to look back to 2019 and say, “What were my limitations from a platform standpoint? What did I want to do but I didn’t get to do? Or what did I really aim for, and it was way out of my budget because I needed some custom functionality?”
This gives you that boost in 2020 because you’re going to have to make some serious decisions when it comes to technology. It’s going to start moving a lot faster than it did within eCommerce.
Why is it moving fast?
The reason it’s moving fast is because of all of these big players out there absorbing the eCommerce space. You have Amazon, Walmart, Jet, and the technology that they’re investing in is beyond the curve.
How are smaller eCommerce companies going to keep up?
Well, they’re going to have to do the same and again, it’s going to be a lot more difficult. So that’s why you really need to start investing in your technology now. Within a few years, it’s going to be too late.
Look at are your development and technology, and marketing. When you’re looking at your marketing, open up analytics. Start from January 1st up until today. January 1st to December 20th, where are you getting the money?
Don’t only look at revenue. Look at profitability, top 100 bestselling products, top 20 bestselling categories, and your funnel. From “add to cart” all the way to “checkout,” what are your percentages? Analytics will tell you.
Evaluating your Online Marketing Channels
Study your media. Which channels made the most revenue and profits? Is it an organic search, Facebook, Google, or Google shopping? Is it retargeting on AdWords, email marketing, or an affiliate?
There’s a wide spectrum. Most importantly, which ones did you not do? If you didn’t do affiliate and if you have products that are affiliate-friendly and we can review that on another session, you better get onto affiliate because that’s like you trying to sell a thousand products worth versus a thousand people trying to sell you a thousand products. Affiliate definitely works if you find the right partners.
You will be amazed at how many companies there are that do over three to five million that don’t have the Facebook pixel on their sites. They are leaving millions of dollars on the table if you’re not doing Facebook. Ignoring it is not an option anymore.
Because the Facebook audience network is so wide. CNN, Forbes, The Huffington Post, Entrepreneur, and a million other websites neglect their social media potential. They are giants, but many of our clients are smaller.
For example, ninety-five percent of our prospects lack a YouTube channel. YouTube gets three times the traffic as Facebook. Even with the algorithm changes, the videos raise your awareness.
Potential Customer Touchpoints
Look at your mediums. Where are you getting the money? Where are you not getting the money? But most importantly, let’s look at the touchpoints.
The average user now needs 26 touchpoints, brand touchpoints to do business with you. Where do these 26 touchpoints come from when we talk about all these mediums? This is very confusing to a lot of people.
These touchpoints have to come from all over. We’re going to see in 2020 that everything, and you’re going to hear this over and over again, you need an omnichannel approach, right? So you need to be touching them on Facebook, Instagram, YouTube, Twitter, Google search organically or PPC or Google shopping, so you need to be in front of their faces wherever they are. Being on multiple channels makes a difference.
Analyze what went well in 2019, and the channels that you couldn’t develop, for time or budgetary reasons. Focus on what worked and treat trends as guidelines, not imperatives.
Some channels just don’t make sense. Don’t waste resources. Focus on what’s actually delivering revenue. Don’t start hopping on TikTok, as one example, just because you hear a buzz about its videos. Such a platform might not be the right fit for you and may not even last for a long time. Look at what worked, what didn’t work, and what you’re going to do.
At Optimum7, we talked about marketing with our staff. I want to talk about differentiating yourself. We’ll give you some ideas next week. This week, we want you to start thinking about how can you differentiate yourself from all the competition and how can you become a niche brand.
Increasing Customer Lifetime Value
Who are the fans? Who are the customers that you have that are raging fans of your business, of your products, right, of your services? I think you need to look at that.
Fans and customers are your best salespeople. They’ll tell their friends about it because old-school word of mouth is still potent. But really at the end of the day, they’re also going to be the core of your business. If they’re continuously purchasing from you, their customer lifetime value is always going to be far more than just new business.
They say on average it costs six times more to acquire new business than it is to convert an existing customer, so utilize that. Use that to your advantage. Go after and make those five raving fans of yours into every single customer that touches your store, that wants to leave there and tell somebody else about it.
Look at your operations. Again, we talked about different media. From a lifetime value of a customer standpoint, how good is your email marketing?
When you just send specials, that’s not the same as actually segmenting your customers and choosing your top thousand customers and giving them extraordinary value. Those are the people who are most likely to come back and shop with you and spend hundreds of thousands of dollars, if not millions of dollars with you.
Look at these facets when you’re reviewing 2019. Next week we’ll talk about specific ideas for 2020 and what you should really look at and some of the trends that we see for 2020. Speak to you next week.
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