On its face, running an online store pretty simple. People want a product, you have a product. You just have to get the word out about who you are, and what you’re selling. Make some accounts on social media to connect with your potential customers and watch the sales roll in, right?
Well, not exactly. The difference between failure and success for your e-commerce business is going to rest on a few crucial factors, and to be profitable you’ll need to make the right moves.
Here are the 4 most common e-marketing mistakes, and how to avoid them.
Not Investing in Your Branding and Marketing
It’s an old truism that you need to spend money to make money, and while you shouldn’t go overboard when you’re just starting out, this is especially true for marketing. When you’re working off a shoestring budget, it might be tempting to cut corners. Maybe you design your own logo or take product pictures in your bedroom. But unless you’re a graphic designer or a photographer, hire a professional. Today’s online shoppers are savvy at finding brands that provide consistent quality, and a strong indicator of a good company is the professionalism of their site and social media pages. Don’t wait until you think you have the money to present yourself as the great brand you know you are. Make the investment early, and customers will see the difference.
Another place new businesses often cut corners where they absolutely shouldn’t is in paid marketing. Sponsored posts Facebook and paid hits on Google are expensive, especially if you haven’t made a profit yet. But you won’t make that profit unless you get serious about reaching your potential customers through advertising. A study by the site Small Business Trends showed that 85% of small businesses cite word of mouth as the most important way of getting customers. The implication is clear: as a small business, building a happy and loyal customer base in the most important first step to success. Don’t skimp when it comes to making an attractive business with a solid online presence and reputation. It will pay dividends in time.
Not Knowing Where Your Customers Are Online
Even if you invest in a strong advertising campaign and awesome branding, you can still miss your customer base. A common mistake among e-commerce businesses is to only focus on the few big sites (i.e. Facebook, Instagram, Amazon) when the people who actually want to buy your products surf the web elsewhere. Say for instance you run a store that sells artsy accessories targeted at women. Your potential customers probably have a Facebook account, and maybe an Instagram as well, but they might not spend as much time there as they do on sites like Tumblr or Pinterest. If you know that, you might think twice before putting all your advertising dollars into sponsored Facebook posts.
Knowing the internet habits of your target customer is very important when it comes to advertising you e-commerce business effectively. One powerful marketing technique for reaching customers is to create a persona. A persona is an archetype of one specific kind of target customer. Using research, interviews, and intuition, you build a picture of this person; who they are, what they value and look for, and where they hang out on the internet. The marketing platform Hubspot has an excellent crash course in persona creation as well as free templates. Using tools like personas to get in the headspace of your customers can indicate the best place to direct your e-commerce marketing funds outside of the mainstream sites.
Not Knowing Your Numbers
On the topic of spending your marketing dollars in smart ways, another common mistake small e-commerce businesses tend to make is not having a strong grasp of business metrics. Knowing the cost per sale, cost per customer acquisition and lifetime customer value for your business is vitally important for your success and growth. If you are able to accurately predict your net profit over a given period of time, you’ll be able to make the smartest growth plans for your company, and not burn out your finances.
Knowing your numbers is also important when communicating your vision to investors. When convincing someone to put their faith in your abilities, having the stats to back you up is a huge boost. In an interview with CNBC, ‘Shark Tank’ investor Kevin O’ Leary ranked knowing your numbers as an attribute that’s found “100 percent of the time in every pitch that actually gets funded.” Being solid on your own business plan is the best way to get others on board with your e-commerce business. If you don’t have that, it will be very difficult to run a successful business, and even harder to get investors to help it grow.
Not Hiring Employees
Finally, one killer of e-commerce businesses is not realizing when it’s time to grow. Finding success running a company out of your home office is a huge achievement, but to see big returns you need to be able to scale your business. This means finding people to takeover smaller duties and allow you to focus on the big picture. Hiring individuals who specialize in certain fields can also vastly improve your company by introducing new ideas or techniques that increase efficiency and profitability.
Once you reach a certain number of employees, it’s a good idea to formalize the hiring process. In an interview with Monster Hiring, Diana Goodwin, founder and CEO of Toronto-based AquaMobile recommends implementing a hiring protocol when you have just one or two employees per department. This allows you to create a recruiting process that scales early on, and helps avoid potential employees who aren’t fully invested in your company.
Of course, these aren’t the only factors that dictate the success or failure of an e-commerce site or any small business. There are myriad components a business owner must juggle in order to run a successful business. But by keeping these tips in mind, and knowing what behaviors to avoid, you can grow your company more efficiently, and more effectively. Be aggressive, but smart with your marketing, advertising, and branding, and your customers will come. If you know your business’s capabilities, it will be easy to balance profit with growth and watch your company thrive.