The three most important parts of online retail are customer acquisition, conversion, and retention. If you’re active on social media and know how to advertise to your audience, it’s fairly easy for consumers to find your company. Turning those consumers into customers is a little trickier. They need to take well to your products, prices, themes, messages, and overall reputation to commit to your brand. Keeping those customers around is even harder, considering how short our attention spans as buyers have become.
Each of these elements is essential to generating revenue, yet many companies segregate their teams and have them focus on only one of them. Creating silos like this disrupts the collaborative nature of successful businesses, locking up important pieces of information and unintentionally wasting money. Instead, have these silos work together in ways that benefit everyone involved. The process starts with understanding how each element of ecommerce works.
Google uses price competitiveness as an SEO ranking factor, and a bit of research shows that cheap products convert four times as many consumers as expensive products do. While this may seem obvious, many businesses don’t take into account that their high cost-per-click bids on more expensive products won’t pay off. Change the prices of your products to see which ranges produce the most conversions, and put more advertising money towards low-priced items. You’ll direct more traffic to your website this way.
Another problem arises when the advertising and merchandising teams are kept separate and store their own sets of data metrics. Discrepancies in costs can causes your company to lose small amounts of money over a long period of time, totaling a frightening amount. Although your instinct may be to assign your advertising team the task of put leftover savings towards popular products that sell out quickly, your merchandising team should work with them and put that money towards less popular products that are always in stock. Use advanced marketing tools to more easily factor in stock levels and sales rates.
Contrary to the actions of most online retailers, focusing on your return on ad spend doesn’t necessarily expand your business’s reach. It indicates how well your advertising is working, but not how many conversions and retentions you’re achieving. Base your paid actions on the profit you’ll gain from each new customer in one year’s time. This helps you better organize your inventory and choose more appropriate product prices.
Knowing how to bid on advertisements, how to budget customer acquisition actions, and how much money to put towards product promotion is a must in today’s online retail market. Training teams of employees to specialize in one sector is no longer good enough. Everyone must work together in a large coherent system made of many small cooperative parts.
In summary, you should aim to put all of your company’s business goals on par with each other and devise ways your teams can achieve them collaboratively. Cohesion is the key to optimizing the three most important elements of ecommerce in general and your ecommerce website.