You’ve secured your domain. You’ve created a beautiful website. Your inventory is ready and waiting, and you can’t wait to sell. Well…now what?
Chances are when you started your eCommerce store you had a vague idea of your overall eCommerce goals. Maybe your goal was to make a single sale the first month. Maybe you were shooting for the moon, like a multi-million dollar revenue year. Both of these goals are respectable, even achievable! But do they align with the time, resources, and capital you are willing or able to put into your store? That’s the big question.
At EmberTribe, we believe in giving our clients the full picture. eCommerce goals are a delicate balance between recognizing your growth potential and marrying that with realistic, achievable steps to get there.
Growth can be broken up into three main stages: traction, profit, and scale. Each growth phase comes with a different set of key performance indicators (KPIs). You should be using and tracking KPIs in your goal setting.
Phase 1: Traction
You have to walk before you can run… a marathon. In the world of eCommerce, we could translate this to “you have to start selling before you can sell out your inventory.”
If your business doesn’t have strategic email sequences, run ads, or hasn’t successfully convinced a person to buy from your brand yet…well, your first goal shouldn’t be $1 million in revenue. Simply put, you’re just not ready yet! You don’t have traction.
Traction for growth can be summed up as a predictable pattern of desired behavior. For your eCommerce goals, this means consistently generating leads and getting purchases. Ultimately, your KPIs will be focused on activities that prove you are reaching the right audiences and presenting the right offers and ads to them.
When you’re in the traction phase, you should be tracking these key numbers:
- Website traffic
- Adds to cart
- Initiate checkouts
- Conversion rate (this is the percentage of visitors who turn into a customer)
- Cost per acquisition/purchase
- Ad click-through rate
Tracking these numbers allow you to see where you’re losing (or gaining) customers and your areas of profit opportunity.
This phase can be the hardest mentally since so much testing can take a while to achieve. When it does, we see amazing wins for our clients like exceeding their launch results, as we did for this client.
Once you’ve figured out which ads are performing best, how to improve your website’s conversion rate, and who your actual customers are – you’ve successfully completed Traction. Now it’s time to move on to the Profit phase.
Phase 2: Profit
Once you enter the profit phase, you’ve already validated your store, offers, and ads (or in other words, you’ve proven that you can sell your product). Now you have more data points to work from and you can start pumping up your sales volume. So naturally, the next step is to sell more!
Which is how we were able to produce 369 sales with a 7.11x average ROAS across one client’s account. We saw as high as 17x on a campaign during one week because we had tested it so thoroughly in the previous phase.
When you’re in the profit phase, you can start focusing on these key numbers:
- Repeat purchase rate
- Average order value (AOV)
- Cost of goods sold (COGS)
- Return on ad spend (ROAS)
- Profit margin
Overall, you should try to set a single goal in the profit phase. We call that your north-star goal which usually is ROAS or cost per purchase. When you hit that goal with consistency, you’re ready to move into the final phase of growth – Scale.
Phase 3: Scale
Once you reach the scaling phase of growth, you’ve proven that your business is able to generate predictable and consistent revenue and achieve your north-star goal for profit. It’s a new beginning!
Now before you go jacking up your ad spend because you’ve reached your profit goals, you’ll want to take a step back and examine your path forward. If you increase spend too rapidly, you could actually be undoing all of the amazing learning that you gathered through the traction and profit phases. As you scale, you should be testing experiments that will widen your funnel to bring in new potential customers and employing strategies for customer retention.
If you try to enter the scaling phase without going through the previous two phases, you’ll probably end up with a house of cards marketing strategy that’s liable to come tumbling down.
In the final phase of growth, you’re seeking to build upon all the testing, optimizing, and learning that you’ve achieved. It’s the results of all your efforts combined over time that create a sustainable growth system online.
Which is how this one client was able to sell her business within 10 months of working with us since we tripled her revenue and created a sustainable growth system for her business.
Metrics for tracking and measuring your Scale phase (along with the others) are:
- Customer churn rate
- Net promoter score (NPS)
- Customer lifetime value (CLV)
- Organic acquisition traffic
- Lifetime revenue
The best eCommerce goals growth success stories come from brands that take an intentional approach to their growth. By going through each growth phase, your brand will build a solid foundation for the growth process to grow and sustain over time.
EmberTribe helps eCommerce, SaaS, and education businesses build sustainable growth systems that bring in revenue sustainably. That way you and the other C-suite executives the bandwidth to focus on the other important tasks. Book a call with our growth experts today.