Well hello there! Catherine Langman here with you on the Productpreneur Success Podcast! Welcome to the show if you’re a new listener, and welcome back if you’re a long-time listener!
I’m super excited to bring you today’s episode, which is essentially all about how you can give yourself the best chance at succeeding this year, no matter what crazy things you might need to withstand.
And to be honest, I was inspired to create this episode after reflecting on and comparing the results from last year between our most and least successful clients, to try and draw out some conclusions about why some fared better than others.
Now obviously some businesses would have been impacted by things beyond their control, depending on what you sell and how much the demand for that was affected by lockdowns and the like.
But when we think about the last year, I think the two biggest themes from 2021 would have to be that eCommerce as a business model is where it’s at – the growth in retail sales continued to increase at an exponential rate.
Because of the pandemic, we’ve continued to see differences in the way people shop. In regions where lockdowns were enforced, online shopping is still king, not just for convenience but for somewhat instant gratification. Yet statistics show that as regions open up around the globe, online shopping is not stopping.
And the second theme is that supply and fulfillment chains suffered under unprecedented pressure, making it more difficult and expensive for brands to actually source product or ship orders to customers.
On top of those themes, there were some significant changes and disruptions to the digital platforms that we all use personally and for our business.
The Apple iOS 14 and 15 updates in particular changed the landscape of how we plan, execute and measure our digital marketing. On the one hand, I do think it’s good for consumers to have more control over the privacy of their own personal information and browsing data, but that move did significantly impact how digital markers can track the performance results of their marketing and reduced our ability to personalise our advertising. We’ve had to work around all these updates by adjusting budgets, turrets, goals and reporting to ensure the effectiveness of campaigns.
So I guess you could say that 2021 was the year we were forced to compromise and pivot…
Makes me think of the chorus lyrics from Gloria Gaynor’s hit song ‘I will survive’…
Now, before we dive further into this episode, I’d like to ask you a quick favour: if you love this episode, would you share it with one or two of your business besties? Especially if you know they’re looking to improve their marketing. It’s super easy to share – just click on the icon next to the podcast on whichever platform you listen to it, copy the share link and then send it in a message to your friends.
Alrighty then – let’s dive into the episode.
I’m going to share with you today are some facts and stats to illustrate the current digital marketing landscape.
Did you know:
- About 80% of a brand’s future profits will come from 20% of its existing customers. This is the Pareto principle right? Which plays out in so many facets of business and life. And yet, so many businesses I see aren’t actually focusing on this yet, or are doing so in an ad-hoc unplanned way using methods that are not systemised and are at risk, for example using only social media to engage with customers and drive repeat sales. Remember, of course, you do not own your audience on social media, so only relying on that for such an important part of your marketing is incredibly risky.
- Statistics show that more than 70% of customers choose to remain loyal to brands based on the quality of their customer service. From interactions with your business on social media or live chat or email, to receiving their order and using the products, as well as any other interactions in between. In a little while, I will talk more about this.
- Customers who purchase products through email actually spend nearly 140% than those who do not receive email offers. Which is a pretty bonkers statistic if you ask me!
- Repeat customers spend nearly 70% more and place larger orders than first-time customers. Which feels kinda intuitive when you think about your own buying behaviour – we often want to test out a new store we’ve not bought from before with a small order first to make sure we like the products and make sure the store is good to shop from. But again, I don’t see as many online stores really focusing on driving those repeat customers, as I said before, so this is such a missed opportunity.
- On average, loyal repeat customers are worth up to 10x as much as their first purchase. And this really comes down to the fact that it costs you money to acquire a first-time customer, and it takes time to convince someone to buy the first time. But repeat buyers are much easier to sell to – especially if they had a great customer experience the first time around.
So how do you increase customer loyalty and repeat purchase rate? There are a variety of ways – of course you can work on things like being super active on social media, or cultivating an engaged Facebook group, and send lots of email newsletters. I won’t suggest to anyone that you don’t do these things, but I do want you to be aware that any kind of manual effort like this that requires you to show up and do the work, not only won’t’ work if you don’t consistently put in the effort, for example if you get sick or if you get too busy to keep it up, but it’s also not going to scale with you as you grow. Plus of course, like I mentioned earlier, relying purely on engaging with your customers on social media is super risky as you just don’t own your audience on external platforms like that. Hopefully none of you have memories too short to recall things like Instagram changing their algorithm and resulting in organic engagement dropping off a cliff for brand pages, or the time last year when Facebook was literally just down and inaccessible.
To mitigate all this – to secure your ability to market to your own customer-base and to put scalable systems in place, you need to make sure you knuckle down on growing your own database. Our favourite system to do this for eCommerce is Klaviyo, and Klaviyo calls this your ‘owned marketing’, because building a database of customer emails and sms’s is literally building a money-making asset that your business owns.
But one of the biggest problems eCommerce brand owners have is attempting to do everything by themselves. Running this kind of business has so many different moving parts, from sourcing to fulfilment to marketing to customer service and more.
It’s simply impossible to to grow a business that provides any kind of quality service to its customers if all those functions are done alone, or manually. One of the most crucial components of growing a profitable, sustainable business, means using technology to automate much of your marketing communications throughout a customers’ lifetime of buying with you. Otherwise known as lifecycle marketing.
In a competitive industry like eCommerce, brands are expected to anticipate customers’ needs and to create lasting relationships with them and drive revenue, all at once. And frankly, we need to use technology with inbuilt AI capabilities, and then use automation functionality to send out personalised messages.
With the right automated processes and marketing messages in place, brands can find an effective way to retain customers and also find new customers to drive revenue and profitability.
Benefits like lower operational costs – automated email flows help to fee up your time and resources. And you can also expect customers to be more satisfied with your business if they’re receiving more timely and personalised communications with you.
I’ll actually be sharing another podcast with you next week I think, about many of the automation options you have available for you using Klaviyo.
Another couple of options you have that may help increase customer loyalty and repeat purchase, are subscriptions and loyalty programs. These options are not going to work for every product category – typically subscriptions work best in instances where customers are definitely going to use the product up and want to replenish, like bog roll and coffee beans! And loyalty programs tend to work well in retail stores that have large and deep product ranges where there are numerous opportunities for cross selling and up-selling. I personally find myself responding to loyalty programs run by skincare, makeup and hair care stores, especially if it’s a store where I can buy for my family as well as myself.
As with everything to do with digital marketing, you’ll need to test things yourself and then review your results to see what works in your business.
- Next, I have a few different, rather interesting stats for you: Omni-channel customers spend about 10% more than single-channel customers. Omni-channel simply means you’re providing seamless and consistent, high-quality customer experiences with your audience across the various channels where your customers interact with your brand. It can be just different digital channels, but can also be in physical stores as well as online.
- Customers who use four or more channels spent an average of 9% more per transaction. And after 6 months of experiencing omni-channel shopping, customers made 23% more shopping trips to the same stores.
- By taking an omni-channel approach to your sales and marketing efforts, you’ll out-sell your competitors by 20%.
- And on the flip side, 23% of eCommerce businesses failed because they were outcompeted. When it comes to digital marketing, just doing what you’ve always done will eventually, and unfortunately, lead you to fall behind.
We started rolling out omni-channel marketing strategies for clients more and more last year after the Apple iOS updates disrupted Facebook and Instagram advertising in particular.
Part of that was in reaction to the risk associated with only marketing on one platform, especially if that one platform is likely to change the way it works as Facebook seems to do every single year.
But mostly, we moved to more omni-channel marketing because this is how we’re able to achieve the best results.
As I mentioned earlier, customers now expect consistent experiences when they interact with a business or brand on a variety of platforms. So you can’t be thinking separately about the marketing content you roll out on each different channel. The customer needs to feel like it’s a cohesive brand experience regardless of where they interact with you, whether it’s on social media or on your website or on email or at an Expo or trade show, or in a retail store when they see your packaging on the shelf, or wherever.
And further to that, you also want to think about the customer journey and where they might be going at each stage of their journey. What content is going to be relevant if they’re watching a Tik Tok or a Reel, vs when they google you?
To succeed in multiple channels, brands need to realise this is not the time for a one-size-fits-all strategy. Instead, establish your marketing across multiple channels and underpin that with data. Working on personalised marketing and a good customer experience that resonates with the customer through their buyer journey is vital. That means looking at your channels and figuring out how they can complement each other, not compete against each other.
Next, I want to speak about authenticity and ethics.
In the past, it was often the case that people would say they wanted one thing – like organic, or locally made, or many other things, but in reality most consumers still bought the cheapest option.
But that’s actually not the case anymore. Now, we’re more concerned about the environment and human rights, and with how businesses can influence the world to be more sustainable and equitable.
- 54% of consumers say the sustainability of the packaging is a factor in their product selection process.
- 57% of consumers are less likely to buy products with packaging that is harmful to the environment.
- 88% of consumers say authenticity is crucial in supporting brands, or in choosing brands they’ll purchase from.
- 72% of consumers said they want to see photos and videos from real customers when deciding whether or not to buy.
- Conscious consumers spend a combined $300 billion per year on ethical products, with numbers in recent years increasing 10% year on year.
Ethical shopping and selling is hinged on observing honesty and transparency. We can’t say one thing and then do something different.
I also think that living through a pandemic for two years has actually reminded many of us about what’s most important in our lives and in the world, and as consumers we are more and more, shopping with businesses that align with those values. Even to take employment based on their values.
And when it comes to the type of content we should produce to help communicate with this changing audience effectively:
We need to button down more on things like user generated content, where your customers are sharing their personal experiences using your products or demonstrating how to use them.
Also finding ways to collect as many customer reviews as possible – and not filtering out the odd negative one. If you show only 5 star reviews, it’s actually not that believable. In fact, statistics show that websites with a 4.2-4.7 star rating actually convert higher than those with a 5 star rating. If you can respond publicly to negative reviews, you will come across as more authentic and transparent and like you are not hiding negative reviews, and that all demonstrates a genuine desire to help your customers.
Or if you sell something like fashion – be inclusive and show your products on a variety of models of different sizes, shapes and ethnicities.
If you sell something like makeup or skincare for women over 40, don’t show all of your images on 18 year old women. That’s just disrespectful now, it’s not aspirational.
There is always so much more we could add to this, but hopefully what I’ve shared with you today gives you some useful insights and inspiration for what you should prioritise this year.
The key takeaways I want you to remember from this episode are:
- Focus on creating content that is meaningful to your customer base and roll it out seamlessly and consistently across all channels;
- Use technology to help enable automated and personalised communications to your customers before, during and after they’ve purchased, with the view to fostering authentic relationships with them over time.
Doing these things will help you to increase your customer loyalty and give you the best chance of building a sustainable and profitable business over the long term.
Of course, if you’re keen for some help with this stuff, please just give us a shout! Whether you need help to learn and implement these things, or you’d like to outsource to our team, just head over to productpreneurmarketing.com and you can book in for a free strategy session.