All B2C enterprises are getting on the E-commerce bandwagon. And they should. But the industry is still grappling with the process. If you are one of those established brick and mortar retail companies making the transition or a disruptive newcomer trying an online-only model, you will find that the going is not easy. There are licenses to get and taxation issues to understand and implement. But most challenging of all is executing the e-commerce strategy.
So what do you do? Hire an e-commerce consultant. Figure out the various parts of the e-commerce game. Immediately get on to selection of vendors who take care of one or more of these parts. You need someone to help you with Product Cataloguing, an E-commerce Web Site and Application including a Mobile App, Payment Gateways, Content Creation for Community-Building, Social Media Strategy, Social Media Marketing, Search Engine Optimization, Inventory Planning and Management, Forward and Reverse Logistics etc. etc.
Challenge: All these vendors need to work together and deliver your vision.
Getting all these people to work together is no easy task. Anyone who has tried to implement their e-commerce strategy for their company knows that he or she needs to get this done themselves. You must establish the fundamental framework and premises within which these vendors work together.
These 8 important steps are for a company that is taking on this challenge, to make the journey a lot easier. It is a risky proposition to launch your e-commerce portal without thinking through these 8 points. After this is done, you can easily define, delegate and monitor the execution of each of the vendor's activities with much more clarity.
Step 1: Define All Your Typical Customer Profiles:
A Typical Customer Profile (TCP) can be defined by specifying criteria which are relevant to identify the customer. Defining factors can be gender, age, location, income, education, memberships, employer etc. A TCP may sound like this: Male, between 18 and 30, city-dweller, who is a member of Art Clubs. There will be multiple TCPs and it is important to define all of them. If you are a niche website it is easier for you to define your customer profile.
Step 2: Define the Product Portfolio:
Depending on your business you could have anywhere from 5 to 10000 plus categories and multitude of products in each category. And it could be changing rapidly with products and/or categories going out of fashion/stock or new products being added. Keeping this catalogue updated is an important task and can be outsourced only partially.
Step 3: Define and Estimate Customer Lifetime
By Customer Lifetime we mean the period of time for which the individual (TCP) is your customer. So, if you define your customer as a teen and your products are aimed at teens, then customer lifetime is about ten years. Briefly, the number of years that the customer will be likely to buy from you.
Step 4: Categorize Your Product Catalogue by Typical Customer Profile:
Make a Product / TCP matrix. Mark the products against their target customer profiles. Not all of your products are for all TCPs. This is a very important step to understand the product portfolio symmetry and spot any gaps in your offerings. A lot of times we define a Typical Customer Profile and we find that we actually do not have the Product Catalogue aligned to our customer needs.
Step 5: Estimate Potential Life Time Revenue (PLTR) from every TCP:
A logical next step is to estimate the total revenue that can be earned from each customer over the customer lifetime. This can be calculated by simply inserting potential order quantities of the all products that a customer can possibly buy in an year, in the Product / TCP Matrix. Make a separate matrix for each year in customer lifetime (or for any base period). This is derived from the concept of Customer Lifetime Value (CLV).
Step 6: Design a Staged Social Media Product Marketing Plan:
As stories of success serve to encourage, so do those of failure. Despite the media narrative that states otherwise, the valley has witnessed its fair share of failures. The day-to-day determination to succeed at the risk of near-constant failure is absolutely pervasive among entrepreneurs in the valley.
Step 6: Design a Staged Social Media Product Marketing Plan:
Now is the critical part of executing this strategy. Discuss with your social media marketing vendor on what channels / marketplaces that they are expecting your categories to gain traction. Create a staged plan for selected TCPs on selected channels to achieve number of unique visitors to your site and estimate conversion to orders based on industry standard conversion rates. Start with a hypothesis on this and direct all content development and social media marketing efforts towards that goal. This must be in line with achieving a percentage of PLTR or revenue to be earned from this campaign's target customer.
Step 7: Plan Vendor Activities based on Marketing Campaigns:
Based on the above steps you need to get the e-commerce platform vendor, storage, inventory and logistics partners to plan their activities. It will be a challenge to plan shipments without a clear understanding of the Product / TCP Matrix. A focused approach to achieving end goal of PLTR from each TCP will streamline all vendor activity for every campaign. Regular meetings coordinating all the teams for each campaign being rolled out will keep the boat from rocking.
Step 8: Finally! Who Said It Is Done?
Making an e-commerce strategy work is not a one time exercise. A continuous watch on the results and tweaking of the parameters is required to make it happen. An internal department must continue to make this process mature and to sustain the learning and internalize the learning to continue to benefit from it. Continuous activities such as Increasing the scope of the execution plan, redefining TCPs, updating product catalogues, updating the Product/TCP Matrix, recalculating the PLTR of customers and working with Social Media Vendors to come up with multiple campaigns for Target TCPs and the list goes on.
In order for the sum of the efforts of all your vendors to lead to synergy, you will need an in-house strategy and execution team with a clear understanding of your vision with continuous corrective learning.
Executing an e-commerce strategy is not about outsourcing all the parts to the vendors and coordinating them. The main idea is to understand and reach the potential lifetime revenue from each customer. And all stakeholders' efforts must be directed to making this happen.