How to maximise your ecommerce profits
The ecommerce world is a large, perpetually changing jungle. As a business owner, it is easy to get lost in a constant barrage of information. This article joins the fray, not to add to the convolution or uncertainty, but to provide accurate information on how to maximise ecommerce profits. If you take away nothing else from this article, you will at least learn that, for an online business to be successful, the focus must centre on your customer and the value you bring to them. If you do this well, the accounting bit becomes easy. Maximise your value and you will maximise your profits.
Know your customer intimately
The mass market is difficult to pierce and can be wasteful in terms of investing money. To maximise your product’s potential, understand the person it’s for. Otherwise you’re shooting in the dark. Opportunity lies in finding a neglected worldview and framing a story in a way that this audience will connect with. A customer’s worldview— their rules, values, beliefs and bias— is their lens. Knowing your target customer with razor sharp precision is essential. Seth Godin, a bestselling author and expert marketer, said that: “Real growth comes with products that annoy, offend: too cheap, too expensive, too heavy, too complicated, too simple, too something. Too too for some people is just perfect for others.”
If you’re building a brand, you need to make sure your product appeals to a very specific market. Having 1000 people who adore you is far better than having 10,000 who think you’re okay. Be comfortable that 99.9% of people will have never heard of you — that’s fine. Focusing on that 0.1% can increase your profits exponentially.
Provide efficient delivery
Don’t underestimate the power of competitive postage costs: it could be the quickest way to improve your conversion rate. One of the last hurdles the customer needs to jump before buying, making shipping free lowers this hurdle significantly. It is no surprise that almost 80% of consumers are more likely to convert when this is offered. Even if you can’t afford to remove delivery charges completely, lowering them could give you the edge over your competitors. Monitor their prices and make sure yours are less.
You can also be remarkable in your delivery times. Having a same-day delivery option is rare and will certainly be noticed by customers. If you’re a UK business, companies like CitySprint provide a priority courier service, ensuring a same-day delivery. It’s options like this that make your business extra-ordinary and give you the edge over competitors.
Go the extra mile to build rapport
A remarkable product is not always about the product itself. Of course, it’s helpful for this to be the case, but if it’s more of a commodity, there are other ways you can be memorable and stand-out from competitors.
One of the most overlooked ways is through customer service. In his book, The Thank You economy, Gary Vaynerchuck outlines his idea of going above and beyond for your customers. He encourages you to make an extraordinary effort with them so that your business has a lasting impact on these individuals. If you’re a smaller business, including hand-written letters to your customer is an amazing way to be remembered. These don’t have to be too long, just a simple: ‘Hey John, thanks for your purchase! I’m sure it will serve you well. Hope all is good up in Liverpool, such a beautiful city.’ This is a 30 second action that will make John feel special and is likely to share with others.
Understand consumer psychology
A customer that has never heard of you will not buy your product straight away. Think of it from your own perspective: would you spend a significant amount of money on a brand you have only just encountered? It’s unlikely. Some marketing experts say that a customer needs to be exposed seven times to a product before they are likely to buy it. The customer wants to see whether you resonate with their worldview, whether you are credible and whether you are worthy of buying from.
A great way for a brand to build ‘brand equity’ is by giving free information, advice or entertainment that your target customer will find valuable. For example, if you sell clothing, do some informational content about how it’s styled. Alternatively, you could create entertainment-based content that you know appeals to the customer. If the clothing is skateboarding-inspired, then make some videos of you doing skate-boarding tricks. The key is to always go back to what brings the customer value.
Discounts are also always welcomed by consumers. The reason low-quality garment retailers like Boohoo do so well is because everything always seems to be on offer. In reality, these prices are carefully calculated and managed to ensure they still profit. Regardless, having a slashed price with ‘50% off’ next to it gets people’s attention, whether they are aware of the game or not. You need to be careful though. Too many promos may damage the integrity of your brand and lead to misconceptions about your product’s quality.
Know the most effective direct marketing tools
Paid marketing is still important. Relying entirely on organic traffic or brand equity is the long-term strategy, but paid marketing helps speed the process up. Understand how to use tools like Facebook Ads and PPC to your advantage. The CPM (cost per thousand views) is still pretty underpriced considering you can pay pennies for 1,000 people to view an Instagram ad. As such, it’s an efficient way to drive traffic to your website or online store. Facebook Ads manager is so advanced that you can focus on a very specific audience, target them by location, gender, interests, age and more. It’s simple and underused.
Be wise though. Do not pepper a cold audience with constant ads asking them to ‘BUY NOW’, or telling them about your ‘EPIC SALE’. Even if you have perfectly targeted your audience, these types of ads will not convert well if they have never heard of you before. Instead, begin by offering some value: introducing your brand to them or offering some free content. Don’t come across desperate. Be smart. Be patient. Think about what would lead you to buy your products, and follow that instinct. We’re all far more similar than we think.
This was posted in Bdaily's Members' News section by Seetal Rihal .
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