Reaching Customers: The First Step to Success for an E-commerce Business
If a man has good corn or wood, or boards, or pigs, to sell, or can make better chairs or knives, crucibles or church organs, than anybody else, you will find a broad hard-beaten road to his house, though it be in the woods.
—Ralph Waldo Emerson: Essayist. Lecturer. Poet. NOT A BUSINESSMAN.
Many small businesses don’t start out thinking about this explicitly, relying on Emerson’s idea that a good product mystically draws customers. In reality, this just isn’t the case, especially in eCommerce. You are trying to find your customers on the internet, and fighting for their attention against all of your competitors and against the attention-grabbing universe of hilarious cat pictures. When they get tired of looking at those, your customers can always go to Walmart. The process of customer acquisition doesn’t just happen on its own.
Many models of this process are available, for example the simple model and the complicated one. The main point is: your customers have to know you exist and have a product that fits their needs or wants, they have to make a decision to buy the product, and then make the purchase.
Every road bump in this process costs you customers and money. From conversations with customers, I estimate that typical conversion rates for an ecommerce business with a great product in a booming market with an educated audience and a well-developed marketing strategy are around 1-2%. It means that for every one hundred customers who visit the site, only one or two leave their money. Keep in mind that every hundred costs money, whether in web hosting costs, pay-per-clicks, or simply in the time you took to create the content to give them.
Every road bump in this process costs you customers and money.
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This is the same battle that every brick and mortar store faces daily. The only way to win is to constantly work in order to understand where the obstacles are, to measure your funnel, and to widen it at crucial points.
The good thing about ecommerce is that you have accessible tools to understand aspects of customer behavior that cost traditional businesses a fortune to measure. Just for comparison, a supermarket chain can spend tens and hundreds of thousands of dollars videotaping customer shopping patterns from every angle, testing various store configurations to maximize revenue. However, it has no way of telling how many people walked by the store without turning in, and why. But an ecommerce business can affordably and continuously gain insight into all this and more. Here’s how:
Track customers looking for a product
Use Google’s AdWords Keyword Planner tool to understand how many people are looking for something that answers to your product’s description, and how much it might cost you to get them to click on that description. Shopify has a great post on what to look for. This already puts you ahead of brick and mortar stores, who are flying in the dark when it comes to potential customers passing by.
Measure your business’ performance against its competition in search engine results
Again, this puts you ahead of conventional competition, which has no way of really knowing how attractive their façade is when compared to that of their competition. Use one of many search engine optimization tools available; my personal favorite for Bigcommerce is BoostSuite, but there are several good options for every major platform out there.
Measure customer behavior inside your site.
This is where you can really improve returns on customer acquisition costs. Why do customers come in, look around and leave? What features give them trouble or turn them off? Lots of tools are available to address different aspects of this problem. I like the conversion tool our hosts at Userpeek are offering because it has highly advanced tools telling you crucial information. Traditional businesses have almost no way of doing the same, except for maybe videotaping each one of their customers and analyzing their every action. Only the biggest brick and mortar chains can afford to even approach this.
The brick and mortar equivalents of these processes, if they exist, cost so much in time and equipment that only the biggest businesses can afford them, but as an eCommerce business, you have them at your fingertips. Use them wisely, and feel free to contact me if you need any advice.
Torsten is CEO and founder of Userpeek. He is an old stager in the online business with 20 years of experience as an online marketer, conversion rate optimizer and UX strategist.
