While it is true that each e-commerce has its own peculiarities, it is also true that, in this historical phase, several elements seem to accumulate: rising acquisition costs and conversion rates that are often too low compared to investments are undoubtedly two of the main problems.Obviously, it is not possible to generalize, and much of the results depend on the role that e-commerce plays in a brand’s overall strategy; is it the exclusive sales channel? Or are the same products found on marketplaces and in traditional distribution? What business policies can we adopt?We talked about the different types of e-commerce in this article.
A key factor in improving the marginality of one’s e-commerce business is the ability to retain customers to oneself over time, that is, to increase their CLV (Customer Lifetime Value)
As Steve Dennis points out so well in this Forbes article there are three main elements that are putting the lives of many online businesses at risk:
- Ever-increasing marketing costs, driving the cost of acquisition to often unsustainable levels
- More promotions, less attractiveness: as business grows, in an effort to acquire new consumers, the leverage of promotiveness is often abused, in a process that accustoms consumers to expect these discounts to the relative detriment of gross margins. Consumers acquired aggressively are therefore worth far less than those acquired “organically”
- Lifetime Value questionable (when not pitiful): the consequence of the previous two points inevitably predicts that customers with very low or even negative CLV will increase over time.
The implication of this reasoning is that without engagement, that is, without the ability to build a relationship with one’s consumers that transfers value (and not merely convenience) to them, our fate is likely to be really complicated.
How then to get out of this vicious circle?
Knowing one’s consumers is the starting point for getting out of this vicious circle.How can we think of devising winning marketing and business strategies if we have no idea how our pool of visitors and customers is composed? We are not talking about traditional analytics but a new way of being able to know our audience, from the anonymous to our hero users.
Thanks to A.I., it is now possible to be able to continuously learn from the behavior of users who are similar to each other, so that we can predict which products/services are likely to be of most interest to them.
The greater the user’s interest in our product the lower the sensitivity to price and promotability.
It is at this point that it is essential, thanks to the marketing personalization, to be able to offer them personalized browsing and subsequent reengagement experiences, so that they stay connected to our brand not only through prices and promotions but through valuable content. If you would like to explore this topic further, you can read this article on using content in a-ecommerce B2C.
Concluding
In a sea of similar proposals, among dozens of emails competing in the inbox, how do we think we are making a difference?Are we communicating the right content to the right person at the right time? What are we doing to incentivize him or her to come back to us? How do we pamper our best customers and inspire them to nurture word of mouth?
In this last question you will find the solution to a great many of your problems. Follow our blog and you will find many suggestions about it…but if you just can’t wait for the next installments please contact us, it will be a pleasure to discuss them with you!
