E-commerce: why you should always have a digital marketing budget.
I have a Masters degree in marketing, and the very first thing I was taught, which is basically the only thing you need to remember, is:
“You have to spend money to make money”
I came across an article on Forbes the other day, stating that you don’t necessarily have to spend money to earn money. The author makes a reference to the success of IBM, which can be mainly attributed to the fact that they didn’t manufacture anything on site, instead they bought all the necessary elements to build their own computers.
The article quotes an IBM spokesman: “Anybody could have done what we did.”
While it might have been true back in the 1980s (but I doubt it), the rules have changed.
Today, having a business does not rely solely on how you build your products. It relies greatly on marketing. It is great to have a product to sell, but it is useless if you don’t communicate around it. Marketing, in the widest possible definition, helps a product be seen, and it also creates demand.
Imagine if Steve Jobs had no marketing budget for his iPod back in 2001? We might still be listening to CDs… No seriously, once you have a product, you should definitely promote it. With the rise of digital marketing, there is a whole new world full of opportunities for retailers to communicate around their products.
Having a physical store is obviously good, but since Internet users are getting more and more impatient about everything (and lazy), building an e-commerce website sounds like a great idea. Here are a few tips on why e-commerce retailers should always spare some budget for digital marketing.
Online customers are not loyal
It’s easy to have loyal customers when you’re the local news agency or bakery. Your customers live or work near you, they come to your store several times a week, and you get to create a relationship with them. You can always count on them to bring some cash in and have your business rolling.
But online is a different story: you have to reach out to your potential customers and you have to stand out. On the Internet, the competition is everywhere and customers can shop around for a really small effort: one click.
One click is all it takes for a potential customer to go and see someone else’s website. Even if this customer has bought from you before, it doesn’t mean they won’t want to see what the offer is like somewhere else. One way to work towards client retention is to gain visibility on the web.
Keep your online presence up
It might be tempting to have a one off SEO audit and restructure of your website, or to create a PPC campaign and have it running for a certain period of time until you have “loyal” customers. The key to customer retention and acquisition is: visibility! Be here!
If you allow yourself not to be visible in the search results, be certain that competitors will be delighted to take your customers away from you!
Unlike physical stores, the online share market is constantly up for auction. You rent this online share market, you don’t buy it. Keep that in mind next time you want to reduce your digital marketing efforts.
The e-commerce equation is relatively simple:
The more visitors you have on your website, the more potential customers will see your product, more of them will be seduced by it, and more will buy it.
E-commerce is an exact science, this is why it is as simple as mathematics. No promotion on the web? No visitors! Simple.
Build a long-term relationship
Unfortunately for online retailers, there is so much more to digital marketing than what happens to attract a prospect and turn him into a customer. There is also customer relationship management. Online retailers have this great advantage that physical stores don’t: a database.
Advertisers and retailers know that it is cheaper to keep a customer than to attract a new one. Thankfully, there are some great ways to retarget your converted customers and incite them to come back. Remarketing, Facebook and other Social Media, Google Shopping, e-mail marketing… The list is endless. This database that you’ll create with time is a gold mine, so make sure you make the most of it.
Google Analytics is a great way to start analysing your visitors as well.
All in all, online retailers please hear this: the old adage that you have to spend money to make money is truer than ever. If you’re not already, you’d better start thinking about your digital marketing strategy!
Feel free to contact me at Reef or via the comments section below if you are interested in promoting your e-commerce website online.