A few weeks ago I’ve paused sending daily emails about growing revenue and conversion optimization because it seemed inappropriate to pretend that it was business as usual when it obviously wasn’t. Much more important things were occupying practically 100% of people’s time and mindshare.
A few weeks have passed and this situation now slowly becomes a new normal. The world paused for a second but life goes on. People still work (but differently), people still buy (but differently), money is still being made (or lost).
It’s time then to adapt to this new normal, take it into account, and to keep working on the business.
To begin, a summary of a panel between Peep Laja (CXL), Drew Sanocki (NerdMarketing.com), Taylor Holiday (Common Thread Collective) and Karl Gilis (AGConsult).
Many great lessons here.
2/ A lot of ecommerce is up, but it’s category dependant, e.g. auto parts is down 30-40%, people are buying replenishments (i.e. brake pads), but they are not buying cars.
3/ Merchandising is key to success. What is relevant now? Barbershops are closed, so all hair clippers are sold out online.
There’s a company selling garage organization equipment and is booming.
Re-focus on those products that solve the problems of today.
4/ People are buying more economically on websites. People compare more products now than they did one month ago. Making more rational decisions. The moment you have to give out your credit card, it creates questions whether they need it or not.
5/ Incentives such as giving back are doing really well .
Don’t prey on the fear. Do the opposite. Be human. Be kind. Help them. Show them that you care about what life is about now.
6/ It’s estimated that top 20% of the Fortune 500 were created during a recession. Play defense for a little while. Then go to offense.
Key is realizing what problems get worse in a recession and pivoting your business into how to solve those problems.
7/ Marketing gets cheaper in a recession. CPMs are down dramatically .
8/ People are asking merchants questions like “what can you do to ensure the package is virus free?”
Adapt your messages about your services.
9/ “ Treat the COVID crisis period as a sale ”, like it’s a holiday.
Cashflow in, cash is what keeps you in business. Temporary sales are good.
If you have a good supply chain, and demand is strong, don’t liquidate inventory at a lower price if you can sell it for full price.
10/ Every credit card provider will give you 90 days post payment with no interest charge. If 25% of your revenue is tied up in CC payment to advertisers, then you have 90 days to push it out so you have more flexibility to your current cash.
11/ Should we be AB testing?
If you have the traffic, do it. But there might not be learnings in it with everything changing so quickly. Consider bandit testing.
12/ Amazon’s eye is focused on the COVID supply chain, and its slower delivery speed is helping other businesses who can ship faster.
Use that as your messaging on your site – mention shipping and delivery dates .
13/ Bigger retail chains are doing ok if they have online presence, but smaller shops are not. Some of them think that things are going to go back to the way things are, but in reality, they are doomed. Entrenched in their old school ways.
14/ Is now a good time to start a new ecommerce business?
Right now is always the best time. If you have a business idea that there is a demand for, do it today. Don’t wait.
The idea of ‘just because you put something online, it will sell’ is a bad idea. You have to do the work.
15/ “The whales are still buying”. 20% of customers drive 80% of revenue.
Every time a ‘whale orders’ we want to know. Get on the phone with that person, learn what is going on in their lives, and why are they buying.
16/ Top focus areas for ecommerce CEOs:
– Focus on cash reserves and cash flow.
– Quick wins
– Protect your downside. Renegotiate lease/contracts/contractors. Get your supply chain right.
17/ Check your emotional state. If you are experiencing lots of success, go listen to those not succeeding. Listen to outside views. Invite advisors/friends to give eyeballs to decisions. You are likely biased in your decision making by something going on in your world.
18/ This is a time for experimenting as a company. Talk about your business model like an incubator, keep your burn as low as you can to allow for opportunities to test in different categories.
19/ Tactics for short term revenue increase :
– Email
– Reach out to existing customer base. 80% of your cost is acquiring customers on the first purchase. 20% is subsequent purchases.
– Direct mail is doing really well since people are at home right now.
20/
Stay customer-oriented.
Stay healthy.
Stay home.
Stay human.
