5 Reasons Your E-Commerce Startup Might Be Struggling

Treat each potential e-commerce customer the same way you would if they were walking into your store.

When the chips are down and your business isn’t moving inventory, it can be incredibly frustrating and confusing. It’s tempting to look at flashy marketing efforts, gimmicks, “growth hacks” or other quick fixes and feel like your business isn’t harnessing the newest marketing tools available. Being the founder of a digital marketing agency with more 100 clients in our first year (spanning fashion, e-commerce and tech companies) has given me the insight to confidently say: fear not. The reason for most businesses slacking sales online is likely one or more of the following.

You Aren’t Spending Enough Money on Marketing

Whenever someone tells me of slow sales online, I ask what their monthly marketing budget or spend looks like. More often than not, the number is too low relative to their cost of acquisition, average cart or customer lifetime. Simply put, if you know it costs in the neighborhood of $100 dollars to acquire a customer and are hoping to add 100 new customers a month, then a penny less than $10,000 per month on marketing is just bad business. You need marketing dollars to grow a business online.

For those who are already spending and growth has plateaued, it’s time to double-down on the most profitable channels. The 70-20-10 rule is a solid starting point: spend 70 percent of budget on proven, relatively consistent channels; 20 percent on opportunities that have yet to be fully fleshed out and seem likely to bear fruit; and 10 percent on wild ideas in the hopes of hitting a few home runs. Newer businesses should flip the 70 and 20.

You Aren’t Adequately Capturing Site Traffic

In the digital world, it’s easy to treat traffic statistics as just that: statistics. The reality is that even 1,000 monthly uniques are potential customers. This means 1,000 real people with wallets and credit cards living in a consumer-oriented society.

One percent is a generic e-commerce conversion rate number that gets tossed around. That would mean 10 sales out of 1,000 visits. What about the other 990 people who came to the site and didn’t buy? Frankly, I care way more about the folks who aren’t converting than those who are. If 1,000 people walked through your brick and mortar store and only 10 bought something, you better know how they got to the checkout counter and what the other 990 people did in your store that didn’t lead to a sale. Dig deep, figure out what people are doing on site, and re-market to them with a vengeance.

Your Ads Aren’t Good

This is not an assault on your creative vision or aesthetic — it’s about your strategic roadmap. Good ads aren’t necessarily visually appealing nor do they contain the punchiest copy. Good ads are those that perform well (meaning high click-through rates and good stickiness on site as a result of message match). Look at your target groups and how they’re responding.

You’re Ignoring Existing Customers

I can’t remember where I first heard the idea, but it’s pretty simple: sell new customers proven products and avoid selling new products to new customers (because there are too many variables). Additionally, capitalize on the super-fan, evangelist types. Every brand seems to have some. Make sure those people are getting appropriate messaging and opportunities to continue spending and supporting the brand in various ways.

Your Product Is Bad

Simply put, there may not be a fit for your product in the market you’re trying to wedge into right now. If everything else above feels dialed in (ads are focused on the right audiences, users are coming for a reasonable price and spending adequate time on site but not buying even after emailing, retargeting, etc.), you have a bad product/market fit. It’s an unfortunate place to be. But it’s a competitive world and it may be time to move in a different direction, unless you have a massive war chest and can weather some stormy waters as you train the market about what a killer product you have.

Of course, this isn’t a decision you make after a few thousand dollars and a couple weeks of effort. After a sustained and intelligently thought-out push, though, if the numbers just aren’t working out, table the idea for a few months and work on something else. Keep that retargeting program going so you have a user pool for direct response messaging. But also take a hard look at what is happening and make a business decision about whether to move forward or not.

After taking away the emotional connection and focusing on the data, it’s very simple to be a good marketer. It’s just not easy, in the same way that it’s simple to eat well and exercise regularly, but not actually easy to do. However, with a few basic changes, you can make things a bit easier for yourself and your company.

Erik Huberman is the founder and CEO of Hawke Media, a full-service outsourced CMO and digital marketing agency based in Santa Monica, CA.

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5 Reasons Your E-Commerce Startup Might Be Struggling

Treat each potential e-commerce customer the same way you would if they were walking into your store.

When the chips are down and your business isn’t moving inventory, it can be incredibly frustrating and confusing. It’s tempting to look at flashy marketing efforts, gimmicks, “growth hacks” or other quick fixes and feel like your business isn’t harnessing the newest marketing tools available. Being the founder of a digital marketing agency with more 100 clients in our first year (spanning fashion, e-commerce and tech companies) has given me the insight to confidently say: fear not. The reason for most businesses slacking sales online is likely one or more of the following.

You Aren’t Spending Enough Money on Marketing

Whenever someone tells me of slow sales online, I ask what their monthly marketing budget or spend looks like. More often than not, the number is too low relative to their cost of acquisition, average cart or customer lifetime. Simply put, if you know it costs in the neighborhood of $100 dollars to acquire a customer and are hoping to add 100 new customers a month, then a penny less than $10,000 per month on marketing is just bad business. You need marketing dollars to grow a business online.

For those who are already spending and growth has plateaued, it’s time to double-down on the most profitable channels. The 70-20-10 rule is a solid starting point: spend 70 percent of budget on proven, relatively consistent channels; 20 percent on opportunities that have yet to be fully fleshed out and seem likely to bear fruit; and 10 percent on wild ideas in the hopes of hitting a few home runs. Newer businesses should flip the 70 and 20.

You Aren’t Adequately Capturing Site Traffic

In the digital world, it’s easy to treat traffic statistics as just that: statistics. The reality is that even 1,000 monthly uniques are potential customers. This means 1,000 real people with wallets and credit cards living in a consumer-oriented society.

One percent is a generic e-commerce conversion rate number that gets tossed around. That would mean 10 sales out of 1,000 visits. What about the other 990 people who came to the site and didn’t buy? Frankly, I care way more about the folks who aren’t converting than those who are. If 1,000 people walked through your brick and mortar store and only 10 bought something, you better know how they got to the checkout counter and what the other 990 people did in your store that didn’t lead to a sale. Dig deep, figure out what people are doing on site, and re-market to them with a vengeance.

Your Ads Aren’t Good

This is not an assault on your creative vision or aesthetic — it’s about your strategic roadmap. Good ads aren’t necessarily visually appealing nor do they contain the punchiest copy. Good ads are those that perform well (meaning high click-through rates and good stickiness on site as a result of message match). Look at your target groups and how they’re responding.

You’re Ignoring Existing Customers

I can’t remember where I first heard the idea, but it’s pretty simple: sell new customers proven products and avoid selling new products to new customers (because there are too many variables). Additionally, capitalize on the super-fan, evangelist types. Every brand seems to have some. Make sure those people are getting appropriate messaging and opportunities to continue spending and supporting the brand in various ways.

Your Product Is Bad

Simply put, there may not be a fit for your product in the market you’re trying to wedge into right now. If everything else above feels dialed in (ads are focused on the right audiences, users are coming for a reasonable price and spending adequate time on site but not buying even after emailing, retargeting, etc.), you have a bad product/market fit. It’s an unfortunate place to be. But it’s a competitive world and it may be time to move in a different direction, unless you have a massive war chest and can weather some stormy waters as you train the market about what a killer product you have.

Of course, this isn’t a decision you make after a few thousand dollars and a couple weeks of effort. After a sustained and intelligently thought-out push, though, if the numbers just aren’t working out, table the idea for a few months and work on something else. Keep that retargeting program going so you have a user pool for direct response messaging. But also take a hard look at what is happening and make a business decision about whether to move forward or not.

After taking away the emotional connection and focusing on the data, it’s very simple to be a good marketer. It’s just not easy, in the same way that it’s simple to eat well and exercise regularly, but not actually easy to do. However, with a few basic changes, you can make things a bit easier for yourself and your company.

See Also: 6 Creative Alternatives to Raising Money From Investors

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Erik Huberman is the founder and CEO of Hawke Media, a full-service outsourced CMO and digital marketing agency based in Santa Monica, CA.