Maximize vs. Optimize: What’s Your Ecommerce Growth Strategy?

Posted on Monday, 24. June 2019 in category e-commerce. 3 min read • Written by

Andraž Štalec

Are you a maximizer or an optimizer? Your ecommerce strategy impacts your growth rate, revenue, customer acquisition, satisfaction, retention and your profits.

Being a maximizer is sexy. Big numbers and high growth can be very rewarding, but also very risky. It’s a high-stakes game with lots of ups and downs.

On the other hand, optimization is about sustainable growth. It’s an art of balancing your growth and efficiency. You’re still growing, but your focus is on long-term results.

What’s Your Ecommerce Growth Strategy?

Of course, every ecommerce can be a bit of both, but usually your growth strategy leans towards one direction.

You’re focused on maximizing your ecommerce growth if…
1. You want to increase your revenue by more than 2x in the next 12 months.
2. Your main KPIs are revenue and number of transactions.
3. Your main focus is on customer acquisition.
4. You invest heavily in paid advertising. Your paid advertising investments represent more than 70% of your digital marketing budget.
5. Your weekly routine revolves around creating sales promotion campaigns.
6. Your paid traffic bounce rate is above 60%.
7. Your new vs. returning visitors rate is hugely in favor of the former.
8. You work with an agency primarily on sales and customer acquisition.
9. You believe that more traffic equals more money.
10. You are unlikely to turn down a new supplier.
11. You are willing to try every new idea to get more revenue.
12. One of the first things you do every day is check your revenue from the previous day.
13. Your hiring (and firing) policy revolves around hitting revenue targets.
14. You invest purely in ROI.
15. You’re too busy to sit down with your team (or agency).
16. You’re afraid that pausing all your digital activities for a week or two would be a catastrophe.

You’re focused on optimizing your ecommerce growth if….
1. You have a defined growth plan for the next 3 to 5 years.
2. You have translated your yearly goals into quarterly and monthly chunks.
3. You have clearly defined target groups and have developed personas for each of them.
4. You have an established and active CRM system.
5. You frequently measure customer satisfaction using frameworks like NPS.
6. You know what your typical customer lifetime value is.
7. Your weekly routine revolves around creating a better customer experience.
8. You invest serious resources in AB testing.
9. You regularly do a retrospective after a campaign to identify the lessons learned to help you improve in the future.
10. Your main KPIs revolve around customer metrics like CAC, CLV , frequency, churn rate, customer profitability. You have also set up a dashboard to measure those metrics on a daily basis.
11. You’re competing on customer experience not on price.
12. You’re regularly looking for ways to optimize your online performance.
13. Your agency meetings revolve around strategy execution rather than campaign execution.
14. You are willing to sacrifice short-term revenue and profitability for long-term gain.
15. You would rather keep a customer than gain a bit more revenue from them.
16. You regularly analyze and optimize internal processes to remove friction and make them more lean and agile.
17. Your direct traffic represents more than 10% of total visits.

While many ecommerce companies are pursuing to maximize their growth, we prefer to work with optimizers. They tend to distribute their resources across all aspects of business and are not solely focused on revenue. They care about their overall success. They are more realistic about how we can help them and about what they need to do to achieve their goals. They’re still often growing fast, but they execute against a plan.

Maximizers’ goals are often extreme and while their optimism can be inspiring, their pace is often unsustainable and their approach unscalable. They often tend to ignore important aspects of business (like client experience and retention) and focus solely on customer acquisition.

As mentioned at the beginning, your strategy is largely impacting every aspect of your business and greatly defines your actions.

The first thing you should do is write down a Vivid Vision – a vision about what your ideal future would look like. Then think about your current actions and plans. Are they consistent with your Vivid Vision?

Still here?
Question? Write it in the comment bellow, let's open a debate.

Leave a Reply