My head-scratcher this week is about…
How many companies ignore the levers of eCommerce growth.
Most eCommerce companies are wasting an enormous amount of money on advertising – all of them are burning a lot of money in vain or optimizing like crazy for a local maximum.
An eCommerce grows thanks to its eCommerce flywheel.
Ignore the advanced one and the company gets in trouble. Eventually. Or, raises money or gets more funding from the bricks-and-mortar division 🙂
Everything starts with the acquisition. Which means traffic and conversion rate.
Then, you have the orders. And the company is chasing for more orders.
Most companies stop there.
The simple eCommerce Flywheel:
The companies that are at this stage get the traffic, and optimizes to be able to acquire more traffic.
They track things like AOV, CPC, CTR, Revenue, ignoring advanced metrics.
The standard eCommerce Flywheel:
The companies that are at this stage are not ignoring the conversion rate and are making sustained efforts towards optimizing the UX, messaging and the offers.
They track more things like CR, AB testing velocity, cart abandonment rate, etc.
The advanced eCommerce Flywheel:
These are or will be the real eCommerce leaders.
Because they are customer-centric. They are not order-centric, product-centric, or revenue-centric.
These companies understand the flywheel that keeps them going.
They add customer feedback & customer research in the mix, across all channels.
This leads to constantly improving their products and customer experience, which leads to a way more effective marketing.
Customers are so happy that are recommending that company and their products, creating the network effect, with word of mouth.
Which leads to better budgets, the capacity to recruit better talent, and so on.
Want to learn more about this?
There’s a whole chapter about it in my part from the CVO Academy
The number you need to learn about this week is: 89%
That’s how much Facebook grew in the last year, while the average CPM was $11, according to Business Insider.
With such an online competition growing each day, Facebook marketing becomes more expensive.
On the other hand, as I have dried my mouth speaking about this for a few years already, few eCommerce companies understand the power of acquiring the right customers and then maximizing their lifetime value.
So, most companies keep advertising to acquire new (and wrong) customers that never come back.
I think this is a waste of money (I have played that sport for a few years, so I know this first-hand).
Here’s the reality: Average PPC agencies get the budget and run their campaigns to acquire new customers and frustrate existing customers.
They ask you about the products, about the margin and cost per conversion and then they run their campaigns.
And they’re really good at it.
They are adjusting here and there, you see orders appear and you initially think is all good.
But there’s one thing that doesn’t happen: the company’s profit is not increasing.
You’re familiar with this, right?
You know how it feels.
You try to optimize the cost, but eventually, you decide is just the way it is.
It doesn’t have to be that way.
Here’s the problem: these agencies have studied Facebook and Google ads and they know what they’re doing with their CPCs, reach, and cost per conversion.
But the game has changed.
As the internet is not serving cookies anymore, you need to stop acquiring the wrong customers and start relying on zero and first-party data.
And that’s where we thought we can give you a helping hand.
We built an audience builder. Processing the data, segmenting the customers, and then giving brands the advantage to make the Facebook algorithm even better.
As they’re stating in their help section, the better is the quality of your lists, the better the campaign results will be.
So, if you’re playing the eCommerce game, have at least 10k existing customers and you’re looking to acquire better customers, it’s time to use the goldmine data you’ve already captured.
There are a lot of great campaigns that you’ll be able to run with the audience builder, but that’s part of a future episode.
Want access to Omniconvert Reveal’s new Audience Builder?
Let us know by responding to this email.
Black Friday is right around the corner. Are you ready?
A great offer can lead to a single conversion, but a great experience can bring customers back over and over again. Making Black Friday/Cyber Monday the experience that keeps them coming back all year is a challenge I will help you conquer, together with a few more of the brightest minds.
See you at The Future of Ecommerce: Black Friday Cyber Monday 2021!
PS: The first 3 registrants will get FREE access to the CVO Academy.