As a CEO, your worries and responsibilities are always tied to the bottom line. When your e-commerce business isn’t doing as well as you’d like or seems to have stalled, the knee-jerk reaction is to make sweeping changes. While this may seem like the best way to go about improving business, the truth is that small changes can be more effective in promoting growth.
Understanding the 10% strategy
When it comes to growing your business, the 10% strategy is getting some buzz these days. It refers to growing your e-commerce business by a profit margin of 10% instead of focusing on bigger numbers.
Although you’ll be making only small changes, you will be doing so in the key business metrics, which means you’ll see maximum results when it comes to net profit.
This strategy takes a very detailed approach and requires businesses to look at growing each of the following four key areas by 10%:
- Profit margin
- Volume of leads
- Average order value
- Conversion of leads to sales
This strategy really starts to make sense when each of these areas offers a cumulative effect over the sales quarter, the year, and beyond.
How to succeed in all four areas
It’s easy to say you need to grow the business by 10% in each of these four areas, but actually doing so is a whole other story. One of the toughest areas for businesses to grow can be the volume of leads. It’s quite common to feel like you’ve hit a wall in this area and have no other markets to tap into.
Word of mouth and referrals are some of the best and easiest ways to grow your leads. You may want to approach this through a customer incentive program, offering your most loyal customers an incentive when they refer a new customer. Another option is to write guest blogs on popular websites. This is a great way to increase brand recognition and consumer awareness.
Another area where e-commerce businesses often struggle is converting leads to sales. Getting people to visit your site is one hurdle, but converting them to actually complete a purchase is a whole other process. A great place to start is to ensure that your email marketing campaign is robust and targeted.
Your emails should also be unique so they don’t get mixed in with competitors’ email and spam. A great way to do this is to use clever taglines, interesting information, or some other “hook.”
E-commerce is also all about customer satisfaction and comfort. The more streamlined the customer experience is, the more likely they’ll return. One way to achieve this is to offer the most comprehensive and up-to-date payment options. The cashless society isn’t quite here yet, but we do have a plethora of payment services that allow us to transfer money in real time, eliminating the need for checkbooks or ATMs.
Some of these services, like PayPal, have become household names, while others are known only locally (WeChat payments in China, for example). But whether local or international, payment apps are changing the way we use money on a day-to-day basis. For that reason, try to include as many options as you can, or even consider developing a P2P payment app of your own if your market niche is very specific.
You’re ready to grow
Instead of focusing on making major changes in pursuit of ever-higher numbers, try the 10% strategy and strive for more cumulative effects. Small, incremental changes can have a surprisingly big impact on your bottom line.
Want to learn more about e-commerce and changes that drive business success? Read the Top 10 E-Commerce Game Changers Over The Last Decade.