Welcome back to this new Upenabler article
Specifically, in this article we will look at 7 recurring patterns that I have identified in the e-commerce world over the last 5 years in 5 different niches.
Long story short : since 2017 I have been helping various types of e-commerce to grow sustainably in terms of sales and turnover thanks to marketing systems that I create and implement.
If at the end of this article you have found interesting ideas but you do not know how to implement them in your store, you can click on the banner below for a free consultation with me to talk about your business.
Necessary premise: The patterns I have recognized are at a structural level of every business I have worked in, so I will not talk about problems related to technicalities, such as non-performing checkouts of the XYZ cms or the loading times of a store, this article talks about how to grow your e-commerce.
Enough talk, let's get to it!
The Problem
As you already know, turnover ≠ profit,
this is a foregone conclusion for many,
I learned it on my own skin and that of my clients
trying to adapt my strategies to make ends meet while generating sustainable growth .
I don't deny that I've made some evaluation errors over the years based on the wrong KPIs.
But then as they say: the truth always comes out .
Over time, however, having the opportunity to work on multiple e-commerce sites in multiple niches,
I have identified 7 common patterns that can hinder the growth of a store in more than 5 different niches over the last 5 years
Now freeze time for five minutes and let's get to the heart of the matter,
I promise it will be worth it.
I'll start right away by shooting you the niches I've worked on at least you have some context:
Fashion, Food, Supplements, Cosmetics, Home Decor + Various Accessories
This is to give you a starting framework and to help you understand how such different sectors can have so much in common.
7 Common Patterns in 5 Different Niches
Let's start with the first recurring pattern:
Pattern 1: Zero Brand Formula
This is a problem that affects 90% of e-commerce companies, both manufacturers and retailers.
If you sell third party products the problem is twofold:
– your positioning is dictated by the brands you sell
– so you can position yourself on other aspects such as the experience you offer
but you already know that you will still be fighting a price war, between discounts and minefields of all kinds: coupons, Father's Day, Mother's Day, Grandparents' Day and so on .
If you produce what you sell but you are not innovating a category, even if you represent a new sector,
you are still non-existent in the eyes of the end customer who in his mind reaches perhaps 3 brands on his scale of recognition when he thinks of a product.
In B2B the situation is different, your ideal customer when he has a problem often thinks directly in categories and not in brands .
Ok, so far so good, but how is all this connected to my e-commerce sales? And why should I worry?
This pattern is very connected to the sales dashboards you check every day, follow me:
if you don't have a brand and are therefore unknown to many, you will obviously resort to advertising to bring traffic to your site,
but the difference between you and a recognized brand that sends the same advertising with the same budget, is that you will have 1/5 of the results at 5X the costs.
Do you understand then the importance of brand positioning? of brand awareness?
As a trench marketer who fights between KPIs and performance, I have always been very far from the concept of " awareness " and " creativity ".
This is a concept that I have changed my mind about over time, because if you are here to last as a brand, as a professional, as a company,
Branding has an increasingly important value in today's world, where our attention span is on par with that of hamsters in a running exercise…
and we are increasingly surrounded by wheels to jump on!
I recently had the opportunity to meet other e-commerce managers in various European markets.
and guess what?
They all have the same problem
Which comes from the lack of positioning and brand recognition, which leads to exorbitant costs during the conversion phase (simply the CPA)
To put it very bluntly:
You can throw as much money as you want into ads and hire the best marketer in the world,
but if your problem lies in the foundations of your business, it is unthinkable to build a skyscraper.
In your opinion, why do PayPal, McDonalds, Amazon and company, despite their global impact and a very strong brand, continue to do sponsored ads that you find on your feeds ?
Because branding is repetition, to the point of exhaustion , to imprint in your head who should be at the top of the ladder of your mind.
and since to remember a concept, as well as a poem, we need to fix it well in our mind with repetition (and not only) here they are hammering like a jackhammer ( even though they are famous ) because they know they cannot lose market share
For this reason, to be remembered, a brand needs a winning, different positioning that stands out from the crowd ... and to hammer home its message.
This is not an article about positioning, so I won't go further.
but if you want to understand more I think that the contents of the late Marco De Veglia are the only ones that can give you a tip.
One thing is certain, today more than ever it is impossible not to talk about brand positioning and branding actions.
Pattern 2: Zero Community Focus
Linked to the recurring pattern number 1 we find the following number 2 and if you think about it it is a natural consequence .
If you are selling to sell and not to actually provide a unique, different, new solution to the market with your product,
It won't be easy for you to attract people interested in your company,
Your customers may have been captured by good marketing, but we won't be able to talk about a fan base or community .
To confirm what I say, try to look at how many people repurchase after the 1st purchase.
I'm just throwing it out there... 10%? 20%?
The companies I worked with did not exceed a 30% repurchase rate.
The companies I worked with did not exceed a 30% repurchase rate.
Let's face it, most e-commerce is born with the idea of:
– make a profit as quickly as possible ( and maybe resell the business )
– create and sell the perfect product that no one has ever asked for
– sell and promote already recognized brands
But what happens if your e-commerce was born from the need of a specific market niche ?
and then it was built on the demands of a certain group of people who have common problems and your product was based on those ?
Here the game is different and we move from being product centric to being market centric.
How many e-commerce sites do you know of were born like this?
I can only think of a couple and magically they are the ones that would work even if they turned off the ads tomorrow.
This recurring pattern also has no niche or geo boundaries,
It's the same all over the world, but not all of the e-commerce world has understood that it must start from the country, not the product .
If you are a more experienced marketer these concepts may seem trivial to you,
the fact is that these are the basics that almost everyone ignores and why everyone complains about ads that don't work .
Pattern 3: Low Margins Low Profits
There are no brakes that can hold back a loose cannon made of high fixed costs and low margins, it's an ending we've already seen ( and not hoped for ) .
If you are selling a third party product your low margins are probably dictated by:
– market prices (of your competitors)
– manufacturer-imposed prices (in some cases)
What I saw in several e-commerce sites that had this problem was the following script .
– basically full prices most of the year but always with % discounts available through coupons and other things, so never really full prices
and consequently never the full margin you had expected
– during the various holidays such as Black Friday, Christmas etc… prices drop even further, between discounts, countdowns and coupons
and consequently an even narrower margin.
If we want to tell the whole truth... nowadays every day there is a holiday that gets a promo if you don't have a strong brand that can impose its own rules.
If we then also include some e-commerce that, in order to avoid having leftovers due to space, value, etc., is willing to take away the margin on certain days of the year...
there you are selling purely to recover the initial costs of the product,
the problem is that there are not only those of costs, how much are you paying for those sales? and your team?
You understand that if you don't have all these numbers in front of you to pass on to a cruise vacation on the Titanic it's a moment for your company .
Let's say you actually produce what you sell, here the game is already different because the margins are obviously higher,
But in any case you have the cost part that should not be underestimated and in any case there is always the N1 factor that regulates your success: the market
This doesn't mean that you are a producer and have more margins and an easy path to big profits, but you have more control over your numbers .
So how do you increase profit in both cases:
– trying not to destroy the margin when possible (avoiding promotions all year round discrediting your brand)
– trying to increase sales volume (on new and old customers)
– trying to increase the value of the brand to be able to afford higher prices and better margins
Pattern 4: The Post-Sales Desert
I called this pattern like this because I imagined how a person who receives thousands of advertisements on his cell phone every day feels.
Imagine this fifty year old gentleman ( yes, you who are reading this…I'm joking! ) who clicked on your ad that he saw while scrolling through Facebook.
Somehow you've charmed him into clicking the Buy Now button,
with difficulty and with many doubts he inserted the card, already knowing that he would have to justify to his wife yet another non-primary purchase for his family
And now what happens?
When you receive the notification of your purchase, you feel strong with your PayPal ringing with sales, but what happens to our friend ?
Who in a moment finds himself in the glittering Las Vegas where everyone was offering him a drink while with doe eyes they invited him to enter their shop…
…in the cold Nevada desert, alone, lost and wondering if he was right to press that button.
Marketers listening and entrepreneurs too, get this into your heads, marketing doesn't end with the sale
but it's just begun!
Marketing should be done first on existing customers and then on new ones, because the most important referral for your business is those who are already customers.
Does it seem normal to you that in 5 different niches, I found all e-commerce sites that after the sale, at most sent them transaction and greeting emails ?
Yes, there was someone who had created welcome sequences, but have you ever put yourself in the shoes of those who buy by reading them ?
It's like entering a club and at the entrance the PR treats you like a star promises you a table in first position and also gives you two free drinks
you who don't even know him, you think that either he made a mistake or it's your lucky day, that's why you let yourself be convinced, you feel privileged and you buy the entrance
but once you enter the PR disappears and you find yourself in the middle of a crowd of strangers, in a place where they don't really like the music, where everyone wonders what they are doing in that place ?
Ok I'm exaggerating but…
In marketing terms, Buyer Remorse is the feeling a person experiences when thinking about whether they were right to make that purchase, immediately after they have purchased it.
Since our friend's purchase was most likely an emotional one and not a rational one, now logic is coming to cash in and ask for explanations...
This is why there can be no post-sale desert, as I call it, but you have to create a strategy that gradually accompanies the person who has just purchased into your club,
and that reassures him that the choice he has just made is the right one and that it will serve to solve a problem and bring him to the desired condition.
Pattern 5: Lack of Segmentation
This is one of the great opportunities wasted by many e-commerce and the reason is very simple:
We are not all the same, and this also applies to your business.
There are those who firmly believe in your products and those who use you at their convenience or forget about you at the first discount from your main competitor .
You understand well then that it is fundamentally about treating everyone in a unique and different way;
or at least figure out how to group more similar people into buyer clusters.
This is where segmentation or also called Lead Scoring comes into play (two slightly different things but with the same goal) that is, giving a score to each of your leads based on certain actions, events and values .
How many e-commerce sites have a correctly segmented database?
And how many of them in turn run promotions dedicated to each segment?
In these 5 years of e-commerce I have not found 1 store that did this.
It's probably me who works with medium-small companies but I can assure you that speaking also with colleagues who work at an international level...
Most companies don't even have the time to figure out how to implement such strategies .
Too bad, I will apply them to my clients 
Pattern 6: Few points of contact with people
When I talk to the majority of entrepreneurs behind e-commerce I ask them a question:
If Facebook and company went dark tomorrow, how many ways do you have to reach your customers and potential customers ?
The answers are very vague, some don't answer at all.
I'm not a fan of the Apocalypse but the truth is that many companies no longer have points of contact with their existing customers and their potential customers .
They simply budget a little money each month for ads and hope that everything goes smoothly, like last month .
But if you don't have a multi-touch strategy, you and your business have 2 specific problems:
– 1 You can't really stay in touch with those who fuel your business
– 2 you are addicted to paid advertising
By multi touch I don't mean having emails and sending them newsletters every week, everyone does that....
Pattern 7: Retention What?
I feel this pattern is mine because I have been involved with marketing mathematics for years now,
I know how important it is for a business to talk (and deal) with Retention.
Not to mention the usual research you should already know that 1 new customer costs you almost 7 times more than selling to an existing customer.
the problem is that without retention your already tight margins are the limit to your business growth,
and if one day you want to sell your business, the first thing they ask you ( or at least they should ) are KPIs such as lifetime value ,
that is, how much value will a person bring within their life cycle with your company?
or KPIs like repurchase rate .
This is why I need to introduce you to the concept of RFM analysis and why it is essential to segment your database well.
R is for Recency
F stands for Frequency
M stands for Monetary
From this KPI we see how this analysis can help you better identify the groups of people who are part of your customer database
First of all, I will write a specific article on this topic because it is very broad and deserves adequate space.
Basically, as we have already said, each customer has a different value for your company and trying to group multiple customers according to a single metric often leads us to make wrong evaluations .
Let's say you want to identify your VIP customers
you could take as input all the people who have made at least 5 purchases, or those who have spent more than €1000 with you
This may be the beginning of segmentation but it is still done with one eye open and the other closed .
Let's see each other better ,
You will agree with me that someone who has made 5 purchases but hasn't been seen for a year does not have the same value as someone who has made 5 purchases in the last 5 months .
You begin to understand then that the R of retention has a value, the F of frequency another and the M of monetary value yet another,
so if you combine all three together we can identify who is really bringing value to our business
and create different segments based on this analysis.
I know you would like me to go into more detail but as already said it deserves a separate discussion.
Comment below if you are interested
Bonus 1 – Pattern 8: Show your face!
We have reached the end of this long article, every time I can't stay within 3000 words...
…but I have so many things to tell you and at the same time I think I give you great value
if not, here's a bonus to finish off the day.
Most e-commerce, but I could also say classic companies, are abstract figures, non-existent in people's lives.
I am not inside people's heads except through a continuous bombardment of ads, or because I have been active for many years or thanks to laser positioning,
because no one impersonates, no one puts their face to it.
I'm not talking about testimonials that guarantee the reliability of the company and its seriousness,
but I'm talking about a person who becomes the voice and face of your company.
Let's remember that humans like to interact with other humans, nobody cares about your offices or your bot .
We like to know that there is a person who gives us his word, who does not want to deceive us, with whom we can relate in case of doubts and fears .
How underrated is all this? Very much so.
Practically every day we are all against each other, waging war on Facebook Ads while a person on their cell phone would like nothing more than a friendly voice explaining to them why they are in the right place to have a better life .
Once a client of mine, not a very big company but a very determined person, explained this concept to me very well,
As a marketer, I listened and mentally took notes while applauding,
he had understood a concept as simple as it was banal:
her clients were interested in someone who could advise them on a solution to make them feel better, that's all
No ads, no door-to-door salesmen, no countdowns…people.
Measuring the conversion rate of his stories compared to my ads there was no comparison in terms of sales or even return
Could you do this with a bot? With a fb ad? Come on….
Technologies have evolved, but human needs have not,
we always reason according to our points of view, our beliefs, not according to algorithms.
You can spend hours talking about marketing with me and competing with our dashboards but this doesn't exist in the real world.
Break out of the marketing bubble.
Bonus 2 – Pattern 9: Know Your Competitors
I have already talked about it in other articles but I thought it was right to insert it at the end of this article.
Many e-commerce companies I have spoken and worked with, it may seem strange to you, but they do not monitor their competitors,
they only have a list of names (usually up to 3) of those who compete with them,
but they don't study their strategies, they don't monitor their prices (there are tools that do this, you don't need an Excel spreadsheet ), they don't look at their communication.
It's enough for them to know that they're there and to check their Instagram every now and then.
Madness for me.
There is much to learn even from those who compete with us every day, because they may have already found solutions to problems that we are experiencing. and that we could borrow.
Conclusion
Ok that's all for today, I think I've given you enough ideas to reflect on and rework your e-commerce or customer strategy .
These words are not just words but come from my experience in the field, real stuff, real data .
If you only put into practice even just 1 piece of advice I gave you in this article I'm sure your business would benefit,
and you would be better off both as an entrepreneur/marketer but above all as a brand towards your customers .
As always I don't ask you anything for this article,
but I would like you to share it with anyone you think might find it useful, it won't cost you anything and you'll make a good impression .
In a world that moves at the speed of light, there are two choices:
– chase the latest technologies and try to decipher the algorithms
– put into practice a few right pieces of information that can change the course of your business
it seems impossible, and yet…
See you next time!
Easter