In a fiercely competitive eCommerce market, it has become essential for retailers to stay ahead of the game and maximize their profit margins since it is becoming challenging to find cost-effective marketing strategies and improve return on investment (ROI) for eCommerce businesses.

As digital transformation transforms from a buzzword to the norm, it is becoming increasingly difficult for eCommerce businesses to keep up with the changes. Therefore, they must rethink their e-commerce marketing strategies to stay relevant and competitive.

If you are looking for ways to improve your ROI for your eCommerce business, here are some strategies to get you started.

What Is a Good ROI for eCommerce?

ROI, or return on investment, is used in many business types, but it is especially important for eCommerce businesses. Good ROI helps to measure project success and understand how resources are used. 

ROI depends on a range of factors, such as the nature and size of the business, geographical location, competition in the sector, market dominance, and type of goods or services offered.

Calculating your ROI is key since several factors can contribute to ROI in eCommerce. We have detailed below the most important factors:

1. Revenue: Your business is doing well if your company has a high revenue. More revenue translates to more profit and further growth.
2. Margin:  Margins are the difference between what you pay and how much it costs to produce a product. If someone orders $10 worth of product and you have a 50% margin, your profit is $5 ($10 – $5). Margin is an important factor in ROI because the higher the margin, the better the ROI.
3. Operating Costs: Figure out how much money is invested into running the business, including labor, rent, etc., and expenses such as shipping and inventory costs. You won’t see substantial ROI if these costs are too high compared to what you earn from revenue.

While this is only a small number of eCommerce business strategies that generate ROI, they are some of the most important for businesses that want to compete in this market.

1. Connecting with customers

eCommerce business owners need to connect with their customers by keeping them engaged through social media channels and offering them a personalized experience. With more than two hours a day on social media, today’s consumers prefer social media as the main platform to connect with businesses. They want immediate responses, live chats, and real people available 24/7 to answer their questions and handle concerns.

FAQs

How to connect with customers on social media?

Start by setting up profiles across social networks such as Facebook, Instagram, LinkedIn, and Twitter. This way, you can maintain an active dialogue with your consumers on various platforms. Then, take it one step further by looking into other channels, such as Snapchat or Pinterest, which may allow you to reach out to your target audience differently.

How to keep customers engaged?

Keep the tone of voice consistent across all platforms – whether tweeting or posting on Facebook or in any blog posts or comments. Plan your content marketing strategy and create interest and engagement for your customers. 

Personalize your messages and ensure they are tailored to customers’ needs and interests. Use pictures and videos to help your customers relate better to your business and easily find the information they need.

Tips

Communication is crucial, so this should be high on your priority list as a retailer. You need more than just posting about sales and promotions; you need engagement to build trust and loyalty. Listen to the customers and interact with them thoughtfully and promptly.

2. Mobile-focused marketing

The number of people using mobile devices to access the internet has increased exponentially in the past decade, as 73% of online retailers’ traffic came from mobile phones as of December 2022. 

A mobile-friendly website will help you to get ahead of competitors with the added benefit of increased conversion rates that significantly improve ROI. Most people surf the internet with their mobile phones and judge a website based on its appearance on these devices. This eCommerce marketing strategy can help increase your conversion rates since you can provide a better customer experience through your online stores.

FAQs

How to create a mobile-friendly website design?

The first step to creating a mobile-friendly website is to use the right platform for your site. If you use CMS providers like Shopify, WordPress or Drupal, modify it accordingly and turn on responsive design in the settings. Regarding specific features, HTML5 should be used when possible for its responsiveness. Use the following Google tool to run a Mobile-Friendly test.

What does a successful mobile-friendly eCommerce website have? 

A successful eCommerce website should provide a responsive design, high-quality images, fast loading times, and optimized product pages. A responsive website automatically adapts to work on any screen size, displaying content without zooming or scrolling around the page and making it easy for prospects to find what they are looking for. 

Tips

Invest in search engine optimization (SEO), i.e., optimizing the company’s website to rank higher in search results, which can help drive more organic traffic. Investing in SEO can improve your visibility and reach, leading to increased sales and a higher ROI.

3. Competitors Analysis

Competitor analysis is a fundamental part of any eCommerce strategy, and many retailers are still trying to figure out how to use competition analytics to improve their ROI. It will provide a baseline for measuring your efforts against the competition and allow you to understand what the market wants. 

If you employ an analytical approach, competitor analysis will be a lot more informative. Try to answer the following questions when conducting an eCommerce competitive analysis:

1. Who are my competitors?
2. What do I know about them?
3. What are their strengths/weaknesses?
4. How do they position themselves in comparison to me?
5. Do I have any data on how my audience perceives them?

FAQs

How to conduct competitors’ analysis? 

Modern businesses rely more on their online presence. Monitor your competition’s online presence or track specific keywords on search engines using Google Analytics. Finding what channels they use for promotion and distribution can help you understand their eCommerce marketing strategies and what might work for your business. 

For example, you can start by looking at their website and checking out their products and services using third-party websites like Google or social media platforms to find out more about them. The goal is to get a better understanding of the product offerings and business model of each competitor.

How to use competitor analysis to improve ROI?

Collecting data about your competitors can improve ROI in various ways. For example, if your competitors target specific keywords that bring them higher conversion rates, it might be worth investing in them too. 

Another great way to improve ROI using competitor analysis is to see how many pages per visit their visitors average on their website. If this number does not match up with yours, it might indicate that something about your website needs improvement, like page loading time or content quality, to keep people on the site longer.

Tips

Analyze your competition’s content strategy or assess how they handle customer reviews by reading through their blog posts or product pages, what they post on social platforms, how often, and what kind of content they share. Identify the best days and hours during which a competitor posts on social media and use this information to plan your posts accordingly.

4. Track and Analyze Customer Behavior

Companies today have access to a ton of data, but the challenge lies in making sense of it and using it for better eCommerce business strategies and ROI. The data ranges from quantitative data like sales figures, time per page, or purchase intent to qualitative data such as feedback or reviews on social media platforms such as Twitter, Facebook, and Instagram. 

FAQs

How to track and analyze customer behavior? 

Start by selecting the right platform. Many different platforms can be used for this purpose, such as Google Analytics and Mixpanel. Then, collect data and analyze it to make data-driven business decisions. Analyze customer behavior by using sales data and conversion rates which allows you to identify gaps in your eCommerce strategy. 

How does customer behavior benefit ROI?

By analyzing customer behavior data, you can identify trends and patterns that can inform your eCommerce marketing and sales strategies and help you make more informed decisions that can drive sales and improve ROI. 

For example, you might use customer behavior data to identify which products or categories are most popular or to understand how customers navigate your site and what factors influence their purchasing decisions. 

With this information, you can optimize your website and marketing efforts better to meet the needs and interests of your customers.

Tips

Determine key metrics that are most important to your business and focus on tracking and analyzing them. Common metrics include conversion rate, average order value, and customer lifetime value.

Segment your customer data to obtain a detailed understanding of different groups of customers and how they behave. For example, you might segment your data by location, age, or purchase history to identify trends and patterns within these groups.

5. Focus on Customer Experience

Improving the customer experience is a key eCommerce strategy for improving ROI. A positive customer experience leads to increased customer loyalty and repeats purchases, ultimately driving your ROI. 

Many factors contribute to the customer experience, including the overall design and usability of your website, the quality and accuracy of your product information, the convenience of the checkout process, and the level of customer service you provide.

FAQs

How can I improve customer experience?

Use data such as past purchases and browsing history to tailor the shopping experience to each customer. This can include recommending products based on their interests, displaying personalized promotions or discounts, and offering a more personalized customer service experience. 

In addition, make it easy for customers to complete their purchases by minimizing the number of steps required to check out. This can include offering a wide range of payment options and using tools like saved payment methods and guest checkout to make the process as seamless as possible.

How does good customer experience improve ROI?

The more information we have about customers, the better we can tailor our products and services to suit their needs. Retailers can use this information to analyze consumer behavior patterns in regard to specific products or services and identify new market trends and opportunities. 

This enables retailers to build a comprehensive profile of each shopper, which they can later use when targeting them with personalized offers across various channels, such as email marketing campaigns or social media notifications.

Tips

Encourage customer reviews, as they can be a powerful tool for driving sales and improving the customer experience. Responding to both positive and negative reviews in a timely and helpful manner increases trust and credibility, ultimately leading to increased ROI.

Summary

eCommerce businesses continuously seek innovative strategies to improve their ROI, achieve success in the eCommerce business, and create sustainable competitive advantage. With traditional eCommerce marketing and advertising strategies becoming less effective, it is time to explore new approaches that value the role of data and analytics in ROI. Ultimately, success in this industry is tied to adapting to the changing market and exploring new growth opportunities.

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