There are TONS of buzzwords in the eCommerce space. Everything you read practically has its own language.
You have conversion rates, landing pages, personalization, upsell, cross-sell, promotions, big data, and single sign on. There’s also targeting, retargeting, drop shipping, inventory management, exchange rates, payment processing, tokenization, integration, omni-channel, subscribers, and marketing automation.
Plus whatever tomorrow’s trending words will be.
All of that noise can feel unbelievably overwhelming and I feel your pain.
Back to the Basics
There are 3 core concepts that everything stems from:
- Products - This is what your company sells. It can be a service, an event, subscription, access to content online, merchandise, or a combination of these items.
- Customers - These are the people you sell to. They may be a company, institution, organization, or just your every day retail consumer.
- Orders - An order is one or more products being sold to a customer at a specific point in time. It contains all of the information about when and how the account is going to pay for those products. It also informs you how and when you are going to deliver those products to the buyer.
That's it. Well, almost.
These items cover all of the data involved with any business and we can call them the "what" of your business.
The next 2 items are the "how", which is your operation process, otherwise known as your competitive advantage.
- Marketing – This is how you are going to find customer, retain customers, and create repeat customers.
- Operations – This outlines how you are going to buy or make your products and how you are going to deliver those products to you customer. It is also how you are going to get some cold hard cash in exchange for the products that you deliver to your customers.
That's really it, I promise.
All of the buzzwords above, along with every buzzword I didn't mention can be organized into those 5 buckets with most dealing with the "process" part.
With All This Noise, What Should you Focus on?
First, you have to make sure the "what" is organized as best as possible using software.
If your product, customer and order data isn't organized in a clean and efficient way then you'll never be able to effectively work on the "how" of your business.
This means having a master system that owns each of the 3 items. Each item doesn’t need its own software system, but each needs to have a clearly defined master system of management. Once you have a solid foundation of data, you can move onto optimizing the "how".
Which buzzwords and areas are the most important? With all of things you can tweak in the process, which one should you focus on?
Profit & Loss
The profit and loss sheet defines every business. This is the report that is universally understood by all businesses in defining their success or failure with a very simple positive or negative number at the bottom.
The outcome of that number is a simple equation of (revenue – costs) that coincidentally maps directly to the concepts of "marketing" and "operations".
Put simply, if you look at those numbers on the P&L sheet and say, "We need to increase revenue" then the items to focus on are marketing opportunities to drive more revenue. By focusing on concepts like split testing, personalization or retargeting, you can test and refine your process to increase your top line revenue.
If you say, "Wow revenues are way up, but why is it so expensive to do business?" then you should focus on your operations. By focusing on operations with concepts like drop shipping, inventory management, payment processing or productivity tools, you can drive down costs and enable new opportunities for marketing.
In the End
At the end of the day, providing a solid foundation for products, customers and orders is the most important step. After you’ve built a clearly defined master system for those, then you can examine marketing optimization efforts to increase revenue and streamline operations.