I am betting your mind is already deep down in your favourite web analytics tool, guessing whether it’s bounce rate, conversion rate or maybe product list click-through rate that I am about to announce as the one, overall winner.
Get your head right up and forget all about the metrics you normally hear the experts preach about.
I have worked with e-commerce for seven years, both as a consultant, an owner and as a CEO. I have made the huge mistake to focus too much on the wrong business metrics the first 4 years. Hindsight is always easy (and painful) and I sure that our business would be double its current size if I had realized the following four years ago.
Back in 2012 Back when I was working as a digital marketing consultant, we had this large client (e-commerce) with a annual revenue at around $100 million a year. The client was thriving, but their website experience was not great in terms of both UX and digital marketing strategies and efforts.
This was my dream client. During my tenure a consultant I was convinced that if we could just get a few months to improve the lowest hanging fruits in terms of both conversion and traffic, it could be a huge win for both the client and us.
However, it never happened. We did get some projects in with good results, but not close to what I had hoped for. One day our CEO explained to me why. Apparently, the client and more exactly their CEO had a very specific mantra:
“If I stand to choose between investing $100k in assortment and integrations to suppliers or in improving and optimizing UX and traffic, I choose assortment and integration every day.”
He knew. He knew what it took me five years to fully realize. As a e-commerce company, you always need to start with building the best assortment at the best prices with the best delivery. It’s pretty simple, but it is powerful. It is exactly those “Big ideas” that Jeff Bezos has built Amazon upon.
I know a lot of small Danish e-commerce companies getting eaten at this very moment by big foreign competitors. And I fully believe that the one, key reason for this is that the companies in question spend 20% of their time, money and efforts on building, improving and optimizing assortment and 80% on digital marketing, user experience optimization etc. We all get so caught on i traffic sources, partnerships and bad tools because it’s easy to understand and attribute. Selection and price is not. It is hard and important.
Marketing cannot save a bad product. That’s a fact. For e-commerce companies, the “product” is the assortment and its prices.
I am writing (preaching) this mostly to myself. TrueStory is not a traditional e-commerce company, but our “product” is our selection of experiences, it’s availability (booking) and the prices we are able to sell those experiences at. The way our site is designed, which channels we use to attract new potential customers and the size of our remarketing lists do not matter if our product is not able to compete.
However, if our selection is great, our marketing efforts will kick in with an effect we could not have dreamed about otherwise.
Think for a minute about an e-commerce company you know. How many people are working in the marketing team? How many are working in the purchasing team? Exactly.
If I had to only monitor one metric in 2018? It would be the growth our selection of experiences. No doubt. That’s the one metric to rule them all.
Supporting metrics: the quality of the experiences, the price competitiveness and of course the efforts done to get that growth.