Samir Balwani is the CEO of QRY, a marketing agency that helps consumer brands scale using a proven test and learn methodology.
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Starting an e-commerce business is difficult, and it doesn’t become easier as you scale. Instead, the challenges become different. Knowing what to do and what mistakes to avoid can increase your chances of success.
Here are seven marketing mistakes I often see growing e-commerce businesses make:
1. Assuming Advertising Fixes Everything
Regularly, my team and I see e-commerce managers assume that advertising will single-handedly scale their business and fuel limitless growth.
While it’s true that advertising is an important lever for growth, in the early stages of a business, advertising can cover up core issues with the marketing strategy.
For example, an early brand could grow by only acquiring new users without ever reengaging existing customers. As the brand gets bigger, continually acquiring new customers becomes more expensive and can ultimately stall growth.
Advertising is important, but it shouldn’t be your only growth channel. Scaling requires a multifaceted approach across the entire customer journey. Your marketing strategy should include things like partnerships, email and SMS communications, and loyalty programs.
2. Not Actively Generating Brand Demand
Once a brand reaches a certain size, the business needs to start investing in generating additional brand demand. Early on, the brand may build brand awareness through one-off influencer or press mentions, but without a structured awareness strategy, the business will not be able to effectively scale past a certain point.
Generating brand demand means introducing the brand to new audiences and staying top of mind as consumers move through the buying process. Brands can do this by investing in press outreach, activating influencer campaigns, and advertising in channels like TV and podcasts.
3. Not Diversifying Marketing Channels
While a business is growing, a brand is less likely to want to test and learn new advertising and marketing channels. We usually see this because resources are limited and funds are therefore allocated to channels that are already working.
This helps while the business is small, but individual channels start to plateau as it starts to scale. Diversifying marketing channels allows you to grow quickly by engaging consumers in multiple ways across multiple channels.
4. Not Tracking And Measuring Lifetime Value
When it comes to advertising, most brands focus on return on ad spend (ROAS). While we recommend using ROAS as a core KPI, as brands become more sophisticated, they should track lifetime value (LTV) as well as ROAS.
LTV measures how much revenue a customer will generate for the business. Where ROAS only takes into consideration the first purchase, LTV includes all subsequent purchases the customer will make.
Using LTV allows you to maximize your growth by focusing on the value of each new customer. It forces you to optimize your cost of acquiring new customers, the cost of engaging existing customers and the cost of driving brand advocacy.
We recommend using a customer data platform when tracking LTV to best understand your consumers and the different personas.
5. Not Investing In First-Party Data
We’ve already established that as a brand scales, the business is forced to reach out to colder audiences (audiences that are not always ready to purchase right away). This, in turn, increases the length of time it takes for a purchase to occur (since cold audiences aren’t usually ready to purchase right away).
Scaling brands need to focus on acquiring and maintaining a relationship with these audiences instead of having to continually advertise to reach them.
Incentivizing consumers to share their emails or phone numbers allows a brand to build a database of prospects that they can reach out to when they have new news (i.e., sales, product launches or VIP events).
This tactic is becoming even more important as changing privacy rules makes remarketing harder than ever before.
6. Not Communicating With Your Partners
As the business grows, teams will have to activate marketing strategies and programs across multiple campaigns. Not communicating the plan with your agency partners and internal teams will lead to missed opportunities and a lack of overall integration.
I recommend creating and maintaining a marketing and product calendar that outlines upcoming programs and KPIs.
Here are some examples of events you should mark on the calendar:
• Ad campaign launches.
• PR and VIP events.
• Product launches.
• Inventory restocks.
Sharing the calendar with your agency partners and internal teams will allow them to align and build strategies accordingly.
7. Not Prioritizing Customer Service
Few things can stop a growing brand faster than bad customer service. Consumers are constantly rating and reviewing their experiences and the products themselves.
It’s imperative that customer service is prioritized and that teams go above and beyond to ensure the customer is happy. These days, the customer has a megaphone that can impact advertising efficiencies, press engagement and overall word-of-mouth marketing.
Spending a few dollars to keep a customer happy can save hundreds of dollars in marketing costs.
What Opportunities Do You Have?
Each business is different, and while this list highlights some important opportunities that growing e-commerce businesses can take advantage of, it’s not exhaustive.
What have you seen impact the growth of your business? What do you think would help you get to the next level? What will you change in your business today?
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