You’re getting ready to launch your BIG online advertising campaign. “It’s fool-proof!”, you tell yourself, as you review and approve everything. The ads look great. The promotion is irresistible. This one’s a real winner. You just know it. Then nothing happens. Time spent. Money wasted…
Is this all too familiar?
You can see what everyone else is doing. They’re advertising on Facebook so we should too.
How much should you spend? Let’s just throw a couple hundred or thousand dollars just to dip our toes.
What should our marketing say? What should we offer? Well this business is doing this, so let’s just do the same.
If you’ve been in any of these positions, you too have made one of these three fundamental mistakes when selling online…
Not knowing your numbers
In 1997, a founder of a new online bookstore was interviewed and asked how he got started.
He mentioned coming across data that web usage was growing at an astounding 2300% year over year. So he decided to create a business plan around those numbers.
That man was Jeff Bezos speaking about Amazon in his early days. And well, as they say, the rest is history. Bezos knew his numbers and his early success can be attributed to that.
Do you know yours?
Here are 5 basic numbers to know:
- Average Order Value (AOV)
- Buyer Frequency
- Customer Acquisition Cost (CAC)
- Conversion Rate (CVR)
- Customer Lifetime Value (LTV)
Average order value
Revenue / Number of Orders
The average value of a sale. This number will give you insights into how much revenue you’re getting per sale. Also, if you’re CAC is higher than your AOV, you know you’re not making a ROI on your marketing efforts. (The exception to this rule is using LTV in place of AOV.)
Number of Orders / Number of Customers
The average number of times a customer buys per year. With this data you’ll know whether your customers are returning. A low buyer frequency means your churn is high and you’ll need to figure out how to keep previous buyers longer.
Customer Acquisition Cost
Amount Spent / Customer Acquired
The average cost to get a customer. For your profitability’s sake, you’ll want to track how much it costs you to acquire a customer.
Conversions / Website Traffic
The percentage many visitors purchase from you.
(AOV) x (Buyer Frequency) x (Years A Customer Stays)
The average amount a customer is worth to your business over their lifetime with you.
Not knowing your customer
How well does your online presence speak to the pains, goals, and challenges of your customer?
The effectiveness of using buyer personas as the starting point for your marketing is how brands that become wildly successful with fans become a reality.
A business that does this well is Bespoke Post, notice that in order to get started, you’ll have to take a short quiz that will match a specific subscription box offer to you based on your interests.
I can guarantee they have a specific buyer persona for each of those boxes.
A buyer persona is a detailed profile for a segment of your target audience that provides insights for crafting your product offers and messaging.
Here’s a quick way to create one:
- List out the goals and desires of your ideal customer
- List out the pains and challenges they go through
- List out the objections they usually have for purchasing your products or services
- List out demographics and interests
Use this information to guide what you say in your messaging and the solutions you offer them.
Not being different
Great products and services have great stories.
Those stories communicate the uniqueness and difference they bring vs. everyone else. Take for example, Fire Department Coffee, they sell one of the most commoditized products: coffee. Could I easily go to my local supermarket and purchase a mass-produced bag of Folgers, sure.
But if their story attracts a very specific type of person (think again to the buyer persona) and their brand is differentiating itself from other coffee brands. It shows in the design of their coffee bags, videos content, and overall brand.
If you don’t differentiate, you get ignored.
So how does one truly differentiate? Always look to the 3 P’s in your business: people, product, and process.
Who can you serve that no one else does? How can you understand your customer better than your competitors?
What unique features and benefits do your products or services have? How can they be better, faster, stronger than similar ones in the market?
What signature process can you promote?
What tools can you leverage to deliver the desired end result?
Steven Marin is marketing consultant and owner of SparkPPC. If you’re a small business owner selling online and want to increase revenue, retain existing customers, and acquire new customers—let’s chat at SparkPPC.