How To Build A Long-Term, Sustainable eCommerce Business
It seems like anyone can jump into an eCommerce business, start driving paid advertising, and make sales from their store. However, like every other business, the real magic happens after the first year in business. And the true players are going to have their business after 2 years.
When an eCommerce business has been moving forward for 5 years, it’s solidified itself as a major player in the industry and a force to be reckoned with. However, very few people are ever going to get to that 2 year mark. The 5 year mark is pretty much a pipe dream for most eCommerce entrepreneurs.
And it’s sad, because with the right information, many of the people that gave up into their first year, or even into their second year could have made a huge impact and hit that coveted 5 year mark.
Blazing trails and building a long-term eCommerce business isn’t as hard as many people think, especially people that don’t understand what it really takes.
Today, we are going to dig into some of the key factors that differentiate those eCommerce businesses that have been around for 5 or 10 years, or even longer, and those eCommerce businesses that get shut down within their first year.
Here’s What You’re Going To Learn
- How listening to your customers can help guide your business in ways that you could never figure out on your own.
- How consistently optimizing your conversion rates and exponentially increase your monthly revenue and potentially add hundreds of thousands of dollars to the value of your store.
- Why you need to be focused on your revenue per visitor, and how most other metrics eCommerce store owners place so much weight on are a waste of time.
- Why it’s so important to collect your visitor’s email address, and how so many eCommerce store owners get it wrong, costing themselves countless sales each month.
- How to diversify your traffic sources so you’re never caught putting your eggs in a single basket, or dealing with the whims and changes happening in the traffic sources you’re using.
- How building a relationship with your customers is what really sets long-term eCommerce businesses apart from businesses that simply don’t make it.
- Why it’s nearly impossible to “sit back and relax” when you own an eCommerce store, and what you need to be doing to make sure your revenue graphs are always moving forward.
Let’s get started.
Step #1: Listen To Your Customers
It goes without saying that your customers are your lifeblood, and if you’re not listening to them or trying to predict what they’re going to want from you in the future, you are going to have a hard time growing your eCommerce store.
I’d go as far as saying this is one of the biggest reason why so many eCommerce stores fail, especially within the first year, is because they simply do not listen to their customers or have systems in place to properly take care of their customers.
And getting a customer is substantially harder than keeping a customer.
You’re going to get feedback from everywhere.
- Your customers will leave reviews of your products, and you need to pay attention.
- Are they saying good things? Use those as selling points in your product copywriting.
- Are they saying bad things? Take the opportunity to improve the product if their claims are based in truth.
What are the biggest questions that you commonly receive from customers either before they place an order or after they receive the products they’ve purchased? Answer these questions in your product copywriting or a frequently asked questions section.
What you’re going to do whenever you start listening to your customers is show future visitors that you actually care, and you’re not just out to make a quick buck.
You’re going to be establishing your brand as a customer-focused brand, and the quality of your products is going to consistently improve.
Not only is this going to help you make more money, but it’s going to position you ahead of your competition and allow you to charge more for each product you sell, while still making more sales than the next best store in your industry.
Getting in tune with customers is something that well-established eCommerce store owners have figured out how to do, and use it to their advantage.
All you have to do is listen to your customers -- when they’re complaining, when they’re happy, when they have questions -- and then make sure you’re delivering on what they actually want from you.
Step #2: Implement CRO Features
Let’s take a journey through 2 different stores.
Imagine they both sell the same products, and they both get the same amount of traffic on a daily basis.
- One store makes 25 sales from 1,000 visitors, while the other store makes 100 sales from those same 1,000 visitors.
- Store #2 is making 4 times as much money as store #1, for selling the same products and tapping into the same traffic sources. So what’s the major difference?
- Store #2 has focused more on providing their customers what they want, made it easy for them to purchase, and has reduced the customer’s risk when it comes to making a purchase.
In other words, they’ve focused on optimizing their conversion ratio so they make more money without having to drive more traffic to their store.
And in highly competitive industries, higher conversion rates can mean the difference between being pushed out of business in the first year and being around for the long haul.
In non-competitive industries, higher conversion rates let you push your competitors out of the market and capture more of the sales for yourself.
To optimize your conversion rates, you’re going to have to take a trip through your store in the mind of your customer, or get valuable feedback from people who have never used your store before.
In our blog post on increasing conversion rates in your eCommerce store we’ve laid out 25 different ways you can increase the amount of sales you’re making without having to drive even more traffic to your store.
The best way to optimize your conversion rates, though, is to get real-world feedback.
If you have a live chat service in place, you’ll be able to “spy” on what your visitors are doing, quickly answer the questions they’re having, and figure out where you may be dropping the ball or making it hard for them to make a purchase from you.
Or, you could ask someone you know (or even a few people) to browse through your store and attempt to make a purchase, getting live feedback from them as they’re working through.
The end goal is to make the purchase process as seamless as possible, removing any objections or causing confusion in your visitor as they make their way from putting a product in their cart to completing their purchase.
Take away their risk, minimize the number of pages they have to get through to complete the purchase, and show them they can trust you, and your conversion rates will increase.
Step #3: Focus On Revenue Per Visitor
Your eCommerce business is full of different metrics you can use to guide your decisions.
There’s really only one metric you should be focusing on, though, because every other metric you have could have you making poor decisions.
Let’s break into another example.
- Let’s assume we’re talking about the same stores above, both getting 1,000 visits per day, with 1 store making 25 sales per day, and the other store making 100 sales per day.
- However, in this example, we’re going to assume that the store with the lower conversion rate is selling a continuity product, while the other store is making a one-time sale.
- Both products are the same price, but one store is selling a product that customers reorder month, after month, and typically stay customers for 8 months at a time.
That means the first store, making 25 sales per month at, let’s say, $25 per month, is going to be making $5,000 off those 25 customers, while the second store, selling products for $100 each, is only going to make $2,500 off of those 25 customers.
- The revenue per visitor through the first store is $5, while the revenue per visitor through the second store is only $2.50.
So while the second store may convert more visitors into sales, the first store is actually going to be making more money -- and this is specifically why you need to focus on how much you’re making for each visitor you bring into your store, rather than simply focusing on increasing your conversion rates.
When you’re focusing on the revenue per visitor instead of simply increasing your sales, you are going to make more money in the long run, and that’s going to help you sustain new marketing strategies and leave your competition wondering how you’re doing it.
Step #4: Collect Your Visitor’s Email Address
Remember when I said that getting a customer costs substantially more than keeping a customer?
I want to go back to that, because it’s one of the key factors that separates failed eCommerce stores from those stores that last long-term and maintain sustainable profits.
There are currently two different ways you can bring visitors back to your store for cheaper than what it normally costs to acquire them in the first place.
Retargeting and email marketing.
With retargeting, you are going to be recapturing visitors that didn’t necessarily make a purchase and attempt to convince them to finish their checkout process.
It works great for people who haven’t already purchased, but it’s not going to make as big of an impact on your long-term sales as collecting an email address and implementing an email marketing strategy will.
When you want to bring people back to your store that have already made a purchase, you’re going to need to stay in their email inbox.
Whether you’re sending them new discount codes, customer incentives, reminding them of their wishlist, or announcing new products, contacting them through email will help increase your lifetime value for each customer.
Here’s Where You Need To Be Utilizing Email Marketing
- Whenever a visitor makes a purchase, collect their email.
- Attempt to collect their email before they exit your store without purchasing.
- Use a discount or other incentive to collect their email on your homepage.
And then you need to follow up with any customers when you’ve obtained their email address.
Here’s When You Need To Be Sending Email Messages
- When you launch a new product.
- When you’re running a special or discount.
- To bring customers back after abandoning their cart.
- To remind them to leave a review on products they’ve purchased.
- To alert them that their products have been shipped.
If you work on implementing email marketing into your overall acquisition and retention strategy, you’re going to find money that most other stores in your industry haven’t been able to find.
Step #5: Diversify Your Marketing Strategies
There’s a current trend that’s dominating the eCommerce industry, with many store owners around the world jumping on the Facebook Advertising bandwagon.
While it’s not necessarily a bad thing that so many entrepreneurs are learning how to advertise their stores on Facebook, it is creating a recipe for disaster because many of these entrepreneurs have all their eggs in a single basket, so to speak.
In the past, advertising platforms, such as Google (and even Facebook), have updated their algorithms and Terms of Service in ways that have practically eliminated some businesses from the digital face of the Earth.
If these businesses hadn’t been relying solely on one platform for their traffic, or even the majority of their traffic, they may still be in business today.
Here’s some quick stats for you to chew on.
That means you need to make sure you’re tapping into each of the different channels if you want your business to survive.
Not only will diversifying your marketing strategies help you avoid the algorithm and Terms of Service updates that many major platforms go through, but it’s also going to put you ahead of your competition.
Most eCommerce entrepreneurs are banking on the fact that they can tap into one traffic source (primarily Facebook Ads right now) and grow their eCommerce business.
However, those well-rounded marketers that own an eCommerce business and utilize a wide range of marketing strategies are going to have a substantially easier time sticking around for the long haul, and they won’t lose sleep if a major platform changes their policies.
Step #6: Build A Relationship With Your Customers
Brands and eCommerce stores that have been around the longest have developed a personal relationship with their customers.
They’ve given their customers a reason to keep coming back to their store, and to keep referring their friends, family, and colleagues to their store.
While this rule doesn’t necessarily apply to some eCommerce stores, like Amazon or Walmart, for instance, because they have multi-billion dollar budgets, when you’re running a small store that you want to quickly grow, adding your own personal touches and building that relationship with your customers is one of the best ways to compete and stay relevant.
Many entrepreneurs falsely believe that adding personality to their business will cost them sales.
When, in reality, adding personality to your business and letting your customers see it can increase your sales and bring customers back time, and time again.
eCommerce is a human-less industry, and most customers will never interact with a human being when they’re making a purchase from an eCommerce store.
If you add the personal touch and show your visitors that there are humans behind your business, you are going to leave a lasting impact on them that most of your competitors won’t do.
One of the best ways to do this is to use a live chat service that has real customer service representatives, and respond to any customer support emails that you get with personalized responses.
When your customers know that they’re talking to a real human, you’re going to instantly set yourself apart from your competition.
There’s no denying that it’s easy to make money selling products online, but that it’s difficult to sustain a long-term eCommerce business and keep it profitable throughout the years.
One of the best ways to make sure you’re always moving forward is to document and test.
Document what’s currently working for you, at whatever stage you are in your business, and then test and tweak different aspects while paying close attention to any movement on the graph.
As your business starts to grow, it’s only natural for you to want to “sit back and relax”, thinking that your growth is going to continue.
What’s really going to happen, though, is that your growth is going to stagnate and taper off, where if you continuously tested and tweaked different aspects of your store, your growth could continue on an upward trend.
To do that, you’re going to need to test different aspects of your business.
Here’s What You Should Be Testing On A Regular Basis
- Your product lineup.
- Pricing of your products.
- Layout of your checkout page.
- Product images and videos.
- Copywriting on your products.
- Copywriting on your email capture forms.
- Copywriting in your email marketing messages.
- Copywriting on your advertisements.
- Different product and purchase incentives.
- New traffic sources.
- Tweaking existing traffic sources.
If you want to build a long-term, sustainable eCommerce business, your business needs to constantly evolve and change with the times.
You can test new products, and test pricing on the existing products that are already making great sales. You can test the layout of of your checkout page, and use different images and videos for your product pages.
Testing new copywriting strategies and angles can reap huge rewards when you stumble upon some copy that converts more visitors into customers.
Likewise, you can test new traffic sources and tweak existing traffic sources so you can get more traffic from the same effort, or reduce your cost per acquisition when you’re using paid advertising sources.
The Key Here Is To Never Stop Testing
If you get a wild idea for a new experiment, take advantage of the idea and put it through a small test. If the test performs well, scale what you did. If it failed, write it off as a failed experiment and take what you can from it.
If you want to build a long-term, sustainable eCommerce business, you’re going to have to develop the same attitude that other entrepreneurs that lasted 2, 3, 4, or even 5 years or more in business have developed.
They know it’s a process and getting complacent or giving up on their constant learning and testing will only hurt their momentum.
If you do what we’ve laid out here, your chances of lasting past that 1 year mark and hitting the coveted 5 year anniversary of your store or your business is substantially higher than if you wing it the entire time, hoping for some random voodoo to magically carry you off into the sunset.