When you feel like you’ve done everything to start a smooth road to growth, but somehow you still stumble, you need to stop a take a step back. Growth hacker, serial entrepreneur & investor, international speaker Theodore Moulos gives us a ride through some of his essential learnings from working with eCommerce businesses and shows you where your focus should be.

Theodore Moulos is the CEO of Growth Rocks, a marketing agency that helps eCommerce stores, SaaS businesses, and enterprise accounts apply growth marketing. The agency works as a one-shop stop, covering every marketing service, from data analysis and growth strategy to implementation in areas like email marketing, social networks, or A/B testing.

We invited Theodore Moulos to our “Top 100 eCommerce experts” interview series to share his thoughts on: 

  • The obstacles eCommerce businesses face in their efforts to grow;
  • The most important performance indicators eCommerce stores should track;
  • The structure of the dream team and the tools needed for implementing a growth strategy.

Obstacles to eCommerce growth

Alexandra Panaitescu: The past two years have been challenging for all companies, but they also brought a lot of growth opportunities. Besides the struggles associated with COVID-19, what keeps eCommerce businesses from growing?

Theodore Moulos: 

If there’s an industry that didn’t suffer business-wise, it’s eCommerce. They had a significant jump all around digital space. Despite COVID-19, eCommerce had a substantial period of growth.

Many new online stores entered the market, so the competition and advertising costs increased by 100%. Due to high demand, ads are two times more expensive than two years ago.

Now we see a lot of companies struggling with ROI and return on marketing investment as costs per acquisition and costs per click are getting relatively high. Their margins don’t allow them to be very flexible. We need to concentrate on pushing top-of-the-funnel leads down the funnel and nurture the existing leads in the funnel. 

A.P.: Companies miss many opportunities that could be transformed into sustainable growth because they don’t know where to start. How can eCommerce companies identify sources of growth?

T. M.: The first thing they need to do is take a step back. Most managers invest more money in generating more top-of-the-funnel leads but don’t verify if that is a working funnel. They have leakages all over the place, and no idea about those. They don’t know how their website is acting on mobile versus desktop. 

eCommerce stores need to fix their funnel and optimize the ecosystem before investing more money. When everything is set and tracked, they can bring traffic and spend their budgets attracting new customers.

> Learn from Jeffrey Eisenberg what prevents businesses from aligning with their customer’s expectations.

From vanity indicators to actionable metrics

A.P.: eCommerce is blessed and cursed with tons of data they can analyze and use as insights for their next moves. Many get lost in vanity indicators. What KPIs should eCommerce stores focus on?

T. M.:

There are metrics that businesses track just for reporting purposes, but I believe that it’s time to move from those metrics to actionable metrics. People should stop thinking about eCommerce metrics as something they need to include in the report they will send to their boss. Think about the metrics you would like to increase and make your shop work better.

We should think of ways to optimize the money we spend. One of the most important metrics for me is the attribution metric. What channel brings most of the sales? Without attribution, eCommerce managers spend money in channels that don’t bring results. Many eCommerce shops use multiple attribution models. Even if you’re splitting the attribution between different channels, you need to identify which one influenced the purchase.

The second metric is the abandoned cart, in terms of identifying the number of drop-offs and the points where people leave without buying. The abandonment might happen while creating an account, while adding a product to the cart, after adding products to the cart, etc. There are so many reasons people leave their carts, so you need to know the real one.

People should stop thinking about eCommerce metrics as something they need to include in the report they will send to their boss.

A.P.: What about customer lifetime value? Are eCommerce managers tracking this KPI?

T. M.: Unfortunately, I don’t see many eCommerce businesses monitoring Customer Lifetime Value. They always try to obtain profits from the first purchase and don’t really care about retaining customers. 

Ecommerce managers need to learn from SaaS managers that pay attention to the monthly recurring revenue or MRR. They need to see the customer as a potential repeat customer. Most of the eCommerce managers don’t even know what a cohort means. They need to get into the mentality and start optimizing the CLV.

> Learn more about Customer Lifetime Value and the right formula to calculate CLV

Prerequisites of implementing a growth strategy

A.P.: Some companies look at growth hackers like super-heroes for their businesses. But these heroes always have help from different specialists and departments. What is the structure of the dream team for implementing a growth strategy?

T. M.: They keep telling me they see growth hackers as superheroes, but I disagree because we’re more like Avengers, a team of superheroes.

The perfect team consists of someone very good in user acquisition, the performance marketeer that makes sure traffic will come, and the funnel expert who leads the traffic down the funnel.

“If we believe that growth hackers are like Avengers, my advice to eCommerce owners is to let them save the world without giving them instructions because they know what to do.”

A.P.: What are the essential tools to support growth strategy?

T. M.: Marketing automation tools are essential for growth strategies. It could be Klaviyo, Active Campaign, or HubSpot. These tools give you all the tracking, attribution, and insights you need. Without them, you’re blind. It’s just as difficult as piloting a plane without instruments.

> Discover Reveal’s integration with eCommerce tools like Klaviyo, Gorgias, and SendGrid.

Takeaways

Theodore Moulos showed us that eCommerce companies need to track the right metrics better and make sure that the funnel is optimized for conversions. 

His advice is to make sure you’re using an effective attribution model and clearly understand why and where people abandon their carts. Also, he says that owners should let the growth hackers do their jobs if they want to see results.

Theodore Moulos believes eCommerce managers should start thinking more like SaaS managers regarding retention and customer lifetime value.

I would like to wrap it up by highlighting one of Moulos’s advice given during this interview:

People should stop thinking about eCommerce metrics as something they need to include in the report they will send to their boss.”

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