We like to say that the pandemic has driven home the fact that it’s not a matter of if, but a matter of when a business has an online presence. Being online isn’t an optional business extra anymore, it is an essential part of the toolkit - and a stream of revenue that can’t be ignored.
SMEs find themselves in the impossible position of needing to stay relevant to consumers, but with more modest budgets. With every vertical threatened by the horizontal market giants, what can SMEs do to make their presence felt?
As consultants who help SMEs navigate this tricky balance every day, here are 1115inc’s top tips that every business can employ.
The best tool in an SME’s toolkit is service. In this era of convenience where you can order whatever you want and return it whenever you want with the tap of an app, the missing piece is being able to ask a question about the product or being able to get an authentic recommendation.
This is where a small business has an edge because there is a human at the other end helping the customer and offering genuine solutions/recommendations. This is why we often discourage SMEs from using chatbots when an online business is still finding its feet. The interaction with a human is something that could clinch the deal and upsell and is worth its resource cost.
Put existing customers first
This is the Holy Grail of our advisory. Often, the business tendency is to constantly drive new customer acquisition - but without retention strategies in place, think of it as pouring into a leaky bucket. No matter how much you pour, you will not have enough.
Online customer acquisition is expensive. You have bid online, reached out through relevant social media posts/advertising and, despite all the odds, you’ve gained this customer. The focus should stay on retaining them by having specific retention strategies in place.
Creating feedback loops, easy referral programmes, premium incentives and discounts and loyalty programs are some effective retention tools. These tools should be used to create well- crafted strategies that are right for each individual business.
Start with the lowest hanging fruit (feedback loops) and work your way up to loyalty programmes when the business is ready.
Know when and how to market
One of the key drivers of success would be understanding when and how to market to your customer base. This, of course, starts with the deep understanding of who is your customer.
There are seasons of the year we advise our clients with modest budgets to market modestly using techniques suited to their base. Your customers will want to know if you have an offer or sale on for Black Friday - but perhaps that is not the time to be running CPC campaigns.
One of the most valuable tools that is available to SMEs, but often underused, is email marketing. Creating your email marketing automations and engaging with your customers and community is the secret sauce for an SME.
Consistently updating the database by gathering updated information about customers is perhaps the single most important and effective marketing strategy an SME can employ.
Be data driven
Every business should know its numbers inside out, and small ecommerce businesses are no different. There are various KPIs that an ecommere business should monitor, and we recommend working with your accountants and agencies to create a document where you are monitoring these weekly/monthly/quarterly. Just this one step will make a huge difference in informing business strategy.
Some basic, non- accounting KPIs for an ecom businesses to look at would include sales, conversion rates, average basket value, cash-on-delivery vs card transactions, shopping cart abandonment/recovery rates, returning visitors, product affinity, top performing products/categories.
Once you start measuring data consistently, some strategies will reveal themselves. Certain products, categories, segments, marketing techniques will show themselves as being more profitable than others allowing you to really focus on these areas and creating a path to scale.
Find a room
“When you are the smartest person in a room, find a different room…” - this is a quote we live by and has contributed the most to our growth as entrepreneurs. On this journey as small business owners, we are often driving the strategy while looking at and managing all aspects of the business. We are, in fact, the smartest people in that metaphorical room that is our business.
Some outside perspective helps. If you have read the above tips and are thinking I don’t know how to do that, get help. If this expertise is in the form of hiring the right person for the job, hire good people, support them and get out of their way.
Accelerators, community groups, business mastermind groups are the other ways to find people who can support and help the business through idea sharing and expertise.