When the chips are down and your business isn’t moving any inventory, it can be incredibly frustrating and confusing. It’s tempting to look at flashy marketing efforts, gimmicks, “growth-hacks” or other quick fixes promised by agencies or vendors and feel like your business isn’t harnessing the newest marketing tools available, or those utilized by leaders in your space. Fear not; the reason for most businesses slacking sales online however, is likely one or more of the following…
You aren’t spending (enough/any) money on marketing
100% of the time 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 value (more on these later). Simply put, if you know it costs in the neighborhood of $100 to acquire a customer and are hoping to add 100 new customers/month – a penny less than $10k/month on marketing is just bad business. If you don’t have the money – that’s a different problem, you need marketing dollars to grow a business online. I know, I know, “Dropbox did ______ and Nasty gal did _____…” no disrespect to businesses that have scaled with limited initial marketing budgets, I did one of those as well, but those are exceptions that prove the rule.
For those that are already spending, and growth has plateaued, it’s time to double-down on the most profitable channels or when timing is right. Marketing isn’t gambling, but sometimes market conditions are “hot” and it’s time to throw more money in the mix in the hopes of getting some outsized returns. Hot ads or campaigns, in terms of return on ad spend or cost per acquisition, from a specific channel, target group, type of copy, call to action, landing page or creative flight can pop up anytime and you need to be comfortable spending when the opportunity knocks. Too often a fertile advertising opportunity will present itself and a business will be too slow to act, catching little if any of the potential boost in returns from the same ad dollars.
The 70-20-10 rule is a solid starting point; spend 70% of budget on proven or safe and relatively consistent channels, 20% on opportunities that have yet to be fully flushed out and seem likely to bear fruit and 10% on wild ideas in the hopes of hitting a few home runs. Newer businesses should flip the 70 and 20.
You aren’t capturing site traffic adequately
It’s easy in the digital world to treat traffic statistics as just that – statistics. The reality is that even 1,000 monthly uniques are potential customers and more importantly PEOPLE! 1,000 real, live, humans with wallets and credit cards living in a consumer-oriented society that is constantly reinforcing the notion they should be buying stuff. 1% is a very generic e-commerce conversion rate number that gets tossed around (obviously everyone’s business is nuanced and should benchmark accordingly) and that would mean 10 sales out of 1,000 visits. What about the other 990 people that came to the site and didn’t buy? Frankly, I care way more about the folks that aren’t converting every day than those that are, because there are so many more of them in every business I’ve worked with.
What kind of email capture mechanism are you using? Is it incentivized? How is that incentive being delivered and what are utilization rates like? Have you tested these? What kind of retargeting have you set up? Are you segmenting these audiences and testing copy/creative/etc? What about landing page optimization? Are you using cart abandon e-mails and/or ads? What do other site statistics like bounce rate, page turns, time on site, behavior flow, etc. tell you about how users are engaging?
If 1,000 people walked through your brick and mortar store and only ten bought something, you’d damn well 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 are no good
This is not an assault on your creative vision or aesthetic – ironically, most people I’ve had this conversation with have way more ego around their creative voice than their strategic roadmap or their analytical ability. What are your target groups like? How are they responding? Are you using UTMs or other tracking methodology to dive deep into user behavior from each campaign? Good ads aren’t necessarily visually appealing or contain the punchiest copy. Good ads are those that are performing well (meaning high click-through rates and good stickiness on site as a result of message match) with the specific audience(s) those campaigns are targeted to.
Are you sending cheap traffic? Who cares. Are you sending traffic that converts inexpensively – happy dance time. Stole this graph from a webinar recently (sorry I can’t remember which one! If it was yours – drop a note and I’ll cite you).
This is the most succinct (and therefore excellent) visual map of what you should be thinking about in terms of traffic generation and conversion.
You’re ignoring existing customers (AKA LTV)
Right now we’re fortunate to work with a new fashion brand that is getting 15% of buyers back for a second checkout within the first 90 days. How? Post purchase email and specific ad messaging, up-sells, peripheral sales and referral incentives (to name a few). I can’t remember where I first heard the idea, but it’s pretty simple: sell new customers proven products or sell proven customers new products, avoid trying to sell new products to new customers (too many variables). Additionally, capitalize on the super-fan, evangelist types. Every brand seems to have at least a few customers that are just bananas about the product. Make sure those people (or cohorts) are getting appropriate messaging and opportunity to continue spending and supporting the brand in various ways.
This point could easily spin off into several others about email marketing, but the short story is; send the right kind of communication to the right cohort. Batch n’ blast email marketing is archaic at this point. Automation is ideal but, at the very least, manually segmenting an email or customer list into a few tiers is a good start.
Your product sucks (sorry)
Okay, that’s too harsh – what I mean is there may not be a fit for your product in the market you’re trying to wedge in to right now. If everything else above feels dialed in, if 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. Sorry about that. It’s a competitive world and it may be time to move in a different direction, unless of course you have a massive war chest and can weather some stormy waters for a bit 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 can have a cookied user pool to shove some direct response messaging to in your dying breaths. But seriously, take a hard look at what is happening and make a business decision about whether to move forward or not.
Try not to let this pound your ego – I’ve worked with really smart people who have had previous success or success post-failure that went to market with products that just fell flat. I launched a company with an awesome platform that (in hindsight) was about 2 years too early given where smartphone technology was at the time and how it evolved since. We burned through all of our investors money and folded. It happens. Again, make sure to really look hard at the first 4 points and focus on doing simple things well. After taking away the emotional connection and focusing on the data, it’s very simple to be a good marketer, but it’s not easy. In the same way it’s very simple to eat well and exercise regularly, it’s not very easy.
Curious to know more? Questions about the above? Comment below or contact us and I’ll get back to you ASAP.
About: Hawke Media is full service outsourced CMO and digital advertising agency with clients in Santa Monica, Los Angeles, San Jose, San Francisco, Chicago and New York.