“However beautiful the strategy, you should occasionally look at the results”
Strategy and planning play a fundamental role in business, not least online, and even more so in a complex world that now operates across multiple sales channels and devices.
The success of a strategy in ecommerce should be measured by the sales that are generated and ultimately profits made.
The most important thing is to have a strategy and to define this by setting and measuring ongoing targets and goals against your plan.
Numbers and metrics should play a key role in defining your success. These should be measured and reviewed on a periodic basis, and actions taken based on the outcomes.
Almost all of the successful online businesses who have experienced compound growth year on year display common beliefs, characteristics and ambitions. The top 10 are presented below.
1. Clearly Defined Vision & Goals
You know exactly want you want to achieve, and when and where you want to achieve it. A laser-like focus helps form an unshakable conviction and dedication to building a successful online business. i.e. “I want to target the UK in year one, I have X amount of stock, I want to push X brands at different times of the year”, “I am going to look into and implement X, Y and Z opportunities to contribute towards traffic and sales, and want to achieve X sales during this time”. Carry out regular competitor and SWOT analyses
(Strengths, Weaknesses, Opportunities, and Threats) and act on the outcomes.
Related: Competitor Research
2. Speculate To Accumulate
Successful ecommerce businesses invest money in activities that generate growth or make them more efficient, ideally both at the same time. Winners pay for the best SOFTWARE, the best TECHNOLOGY, the best MARKETING, the best PEOPLE and the best ADVICE when it comes to strategy, tactics and growing the business. Accepting that customer acquisition is an investment, and focusing on this during the initial years, is crucial. In regards to profitability, customer retention and returning customers should be your number one focus.
Visit: Ecommerce Profitability: The critical second sale
3. Know Your Numbers
Constantly measure. Be aware of and understand your site and customer analytics. Know which metrics are important and continue to focus on understanding and improving on all the numbers. Number of visitors, conversion rate, average order value, bounce rates, returning customers, overall cost per acquisition. Every day, week, month and year provides you with feedback that can be measured against targets and streamline your business.
Related: Ecommerce Analytics Overview
4. Know Your Costs
Costs will fall into four main areas: Technology (ecommerce platform, website, stock control, warehouse systems, tills and epos), Products (buying or manufacturing products, shipping, and packaging), Marketing (online advertising, offline advertising, and agency fees) and Business (employees, office / warehouse rental, operating costs and payment processing). Some costs are fixed, others will be variable. Cost Per Acquisition (CPA) is one measure you can use to analyse individual marketing activities on their own or your advertising vs sales overall. It is cost divided by sales (a £10 spend for £100 sales would represent a 10% CPA).
Related: The Ecommerce Profit and Loss Account
5. Build & Invest in Your Team
Successful online businesses are not a solo operation - it’s a team game. There are mission-critical functions that will require attention and people. This requirement will grow exponentially with sales growth with a few primary and secondary hires critical in the beginning. Incentives are the lifeblood of ecommerce teams as is the case with any sales-focused organisation.
Related: Building an Ecommerce Team
6. The Customer Is King
Changes and improvements should benefit visitors and consumers and in doing so convert more browsers into customers and existing customers into bigger and more frequent spenders. Elegant design might be satisfying to the eye and is important, but frequent and multiple site enhancements that enhance the bottom line are the ones that matter.
Related: Traffic, Conversion & Retention
7. Embrace Change & Continuous Improvement
Keep in touch with developments online, within the world of ecommerce, what is going on in relation to technology, online marketing, the latest news, shifts in online culture and understanding how to read basic web analytics. React to as many opportunities and enhancements that are made as you can. These may be new features on site, new areas for exposure, a change in how you work or continued improvements in product information and pricing. You must become an ecommerce expert
within your industry, knowing as much as possible about your competitors. Being clueless to these things may leave you running behind. An excellent first step would be to subscribe to the mailing lists of your competitors and a range of online ecommerce expert and advice sites.
Related: Ecommerce Resources on the Web
8. Be Fair & Honest With Customers & Suppliers
Building an admired and respected business is important. The real money is made over the long term through repeat sales and referrals. With great customer service and being fair in all business dealings, long-term relationships can flourish with both customers and suppliers. Customers may take a long time to get but can be lost in an instant through poor customer service.
Related: Customer Service
9. Seek Advice From The Experts
No one can be an expert at everything and having consultants, advisors, training providers and service partners you can trust and follow (and measure results from) is essential. Ecommerce does not get simpler over time. Winners pay for the best advice when it comes to strategy, tactics and growing the business.
See: IRP World Service & Solution Partners
10. There Is No Such Thing As Easy Money
There is an army of companies and potential start-ups online wanting to make a million for little or no work and hoping that it is possible to make money for doing next to nothing. Successful retail website owners know that this is a myth and the internet is like any other business. It requires focus, hard work, constant improvement and if you’re targeting and measuring right, you will enjoy the rewards.