In this week’s episode of Growth Interviews, we invite you to join our podcast conversation with Krassimir Stankov, expert fashion trader and highly experienced entrepreneur with a lot of experience both in wholesale, classic retail as well as in e-commerce.
Welcome to Growth Interviews!
Welcome to Growth Interviews, the fun, stimulating and engaging series of conversations driven by digital business growth. Our mission is to provide valuable insights from the e-commerce arena, and each episode is a fascinating quest into the best-kept business secrets and money-making strategies of an insightful world-class expert.
Krassimir Stankov is one of the most insightful e-commerce experts, COO and founder of a leading retail clothing and accessories brand which gained very fast a lot of popularity and visibility in the UK. Due to his wide experience, Stankov expanded the business fast into entire Europe, gaining every year country-level partners making him worldwide known as one of the most experienced consultants in retail and e-tail.
E-commerce is ever-changing and talking to an experienced and passionate leader in this field is always a great lesson. Take your pen and paper and let’s listen to one of the best, Krassimir Stankov.
Here are the biggest takeaways:
- The hard lessons of e-commerce – 03.12
- How to win in e-commerce – 11.04
- Experience and knowledge that make a difference – 20.28
The hard lessons learned in e-commerce
Krassimir Stankov is one of those experts who have done everything in e-commerce since the timid beginning of this industry. We had the immense pleasure to learn about the hardest lessons he learned in e-commerce.
Like many others, Krassimir never had in mind to build a career in e-commerce but the opportunity and the time seem to have been right and migrating to e-commerce seemed to be the best way to reach customers. Having already gained experience, Krassimir started a very successful business in online fashion, which doubled every year and gained a lot of popularity. With the accelerated growth of the business, the team started a new fundraising round and in the process of negotiations, Krassimir and the team understood that they have never looked correctly into the data and there was data that they never actually tracked.
Following their previous business experiences, they have mapped their business on the classic Profit & Loss chart, which showed, as expected, a lot of sales and exceptional growth. The problem they later saw was that they never looked at repeat purchase customers. Looking closely into the business, Krassimir found that the customer retention rate was actually very low and there was a lot of data missing from the entire picture. At the same time, the entire marketing and new customer acquisition became very expensive and this caused the entire business to eventually fail, which for him became one of the hardest lessons to learn.
Looking back, Krassimir Stankov underlined the importance of RFM models, creating different buyer personas and really listening to the customers’ needs and wants since the beginning. Restructuring a business when it is in trouble while trying to sustain the existing operations is a very hard task, that involves a lot of energy and it is not a guarantee that the business will survive, as it happened for Stankov.
Crucial aspects for success in e-commerce
After more than a decade spent in e-commerce, Krassimir Stankov considers retention the most important metric as it impacts directly the KPI of the lifetime value of the customers. In his vision, customer retention is not something to expect as a result of marketing actions. On the contrary, every e-commerce business should plan all its retention tactics ahead and integrate them into their marketing as a crucial pillar.
Another important thing to look at all the time is the price margin. Keeping margin in between correct and balanced values, not too high and not too low, is both important for driving sales but also for supporting continuous marketing actions needed to attract and keep customers. Keeping in check margin and retention rate helps in developing and growing a sustainable and healthy business. Dropping prices just to keep customers interested is highly affecting margins and negatively impacts the budgetary arrangements for a lot of future marketing actions. At the same time, keeping low prices as a unique differentiator for the business always affects the quality of the products.
The third most important thing to look at is the quality of the product and this is actually the starting point of any business, especially in e-commerce, where it is harder to gain and keep the trust of the customers. Having a brand communication with a strong brand promise that never fails is something that was overlooked by Stankov in his early years in e-commerce. That led to a lot of disappointed clients that almost never returned to buy again. Failing in offering a qualitative product, in line with what the brand promise, is always the fastest way to lose customers that will never come back and never further recommend the online store. Taking care of the customers and providing value to them is where any e-commerce should focus.
Experience and knowledge make the difference
e-commerce seems to many like the promised land where success and growth are easily obtained just because there are a lot of communication channels that make the products known to a lot of people almost instantly and more markets than ever are easily accessible. Unfortunately, many entrepreneurs lack the knowledge and proper business education, look at the wrong data and ask consultants for the perfect solution that will magically make their business grow exponentially. At the same time, there is a plethora of information regarding e-commerce metrics and which are the most important KPIs to follow. Although customer retention, customer lifetime value and customer satisfaction have been proven to be extremely important in the healthy evolution of a business, many digital entrepreneurs are still looking at traffic, customer acquisition, revenue as the main parameters of their business.
E-commerce is starting to become very crowded and competitional. More and more digital entrepreneurs are taking the road of a digital business meeting more problems than ever as the digital landscape gets more sophisticated. Knowledge seems to be everywhere and tapping into it is easy but most of the e-commerce ‘success recipes’ that have not been proven in most of the cases. Although still fresh, the industry does not offer a complete manual of ‘how to’ and personal experience is the most important success factor.
We hope you enjoyed our video interview with Krassimir Stankov.
For more valuable insights, make sure you come back to check out our next Growth Interviews as well.
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