“AARRR”
Tuesday #13
5 steps to a perfectly profitable E-commerce
Themes : e-commerce, start-up
This week, we adapted a start up product marketing model to E-commerce : The AARRR pirates funnel, initially developed by Dave McClure. And it turned out to be incredibly accurate …
“A person is surfing on the web, looking for clothes.”
5. Acquisition
We can say without doubt that this part is well understood by most E-commerce teams : creating traffic, meaning attracting visitors to your website. Basically, two kinds of strategies emerge more than any else.
A. Creating a strong brand identity and a captivating concept; bidding on advertising to generate traffic and attract your targeted audience straight to your products. This is called “Pull” strategy, as the customer will come to the product himself
B. Pushing the product itself to prospects, using retargeting, offering promotions and special offers on a particular product and part of the inventory, sampling … This is called “Push” strategy, as the seller will put the directly as a bait to attract visitors.
Common acquisition tools used on the web : SEO, SMO, Adword, targeted advertising, mass mailing.
“He comes to your website, either by typing your name or URL directly (because you use a Pull strategy) or by using a search engine (because you use a Push strategy).”
4. Activation
Now comes the hard part. How to make sure the visitor won’t bounce on your website, assuming there is a “compulsory” amount of mistargeted audience that we will ignore here. Activation is the crucial moment where your visitor buys for the first time in your website, and does not hit the “previous” button to buy in a competitors website. The procedure is to optimize your onsite merchandising and performance to offer the best navigation comfort and customer experience.
Common web activation tools : Real time automated one-to-one E-merchandising.
“He finds what he wants, makes a purchase and leaves the page satisfied”
3. Retention
By retention, we mean loyalty. How often are your first time buyers satisfied enough to come back and buy again ? And once again, would they be loyal to your brand, your service quality, your products ? It is often believed that loyalty comes automatically. It was already untrue 10 years ago, it is even more dangerous to assume this in the 2.0 world. We use to say first time buyers are way more expensive for a company than loyal customers, and it is becoming less and less true (via Gartner Inc in “Journal du net” : 45% of the budget goes to keeping buyers, 55% to acquiring new ones). Customers expect a lot today. You have to go above and beyond satisfaction, and really know each customer tastes, needs and wants to increase loyalty. We are true believers of data driven decision and traffic data analysis, and we think you should integrate it in all your campaign, especially retargeting and retention.
Common loyalty enhancer web tools : Dashboard and analytics, Product offer personalization and customer recognition and knowledge, personalized e-mail, newsletters with interesting content.
“One week after, he think about buying pants to go with the t-shirt he bought. He remembers your brand and comes back to your website.”
2. Revenue
The “Revenue” step can actually be thought of before or after the “Retention” step, depending on your acquisition + activation cost. To start making profit from the first sale, acquisition and conversion have to be industrialized and constantly optimized. For those who are still working on this, no issue. You can profit a lots from your loyal customers. Time to invest in margin products and average basket size !
Common CA increaser tools : cross-sell, up-sell and personalized product pushes and margin enhancers.
“This time he buys pants and shoes. And still leaves the page happy.”
1. Referral
And now comes the steps where any strategy benefits from itself and when word to mouth is on. This does not meet pressure is released. You still need to be on top, and to provide the best customer experience for every single visitor referred to you; and keep the cycle alive.
Common tools to transform you customers into recommenders : unique customer path, ergonomic and customer experience, live chats
“Your loyal customer tells his friend, who is secretly jealous of his style, ‘go to this website, good design, good experience, good quality products’. His friend buys a t-shirt.”
Why are we counting backward ?
The 5 steps of this ROI funnel are all crucial to your E-commerce business. It won’t work if there is a gap somewhere. This is why we recommend you start by optimising your loyalty program, your logistic, your customer care service, your on site conversion. Then, bring traffic on, you will not be disappointed by the result.
“To be continued …”
Share your opinions or questions with us, we are interested!
Or send us a mail at : commerce@ezako.com
See you next Tuesday !
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