E-commerce changed drastically lately. COVID-19, Amazon’s flywheel, paid media costs, and more… Here are the top reasons for why email marketing & SMS is critical for e-commerce NOW and what you should do about it.
Why Email Marketing & SMS is Critical for E-commerce Now
2020 changed e-commerce forever and everyone doubled down on acquiring and retaining customers. In fact, McKinsey predicts that owning customer data will be of paramount importance. Here are five reasons why email & SMS is critical NOW.
#1: COVID-19 Disrupted Traditional E-Commerce Buying Patterns
The world is like a snowglobe right now. COVID turned the world upside down and it’s like a snow globe where everything – aka your customers – is just kind of floating in the air right now. Some of the customers have landed on your business; you can see ecommerce has grown by about 44% last year and it’s on track to grow about another 30% this year, so COVID disrupted traditional buying patterns. But everything’s still landing so you’re in a really great position to capture a lot of the market share that existed, market share that didn’t exist before. A lot more people are online and there’s a lot of room to grab stuff so it’s so critical to focus on digital marketing to capture your share.
#2: Amazon is Absorbing More E-commerce Market Share
But Amazon is doing the same thing. Amazon is clearly absorbing all customers through their own flywheel. You can see at the bottom; there’s the Amazon experience flywheel – low prices, large selection and super convenience. In e-commerce, people are loyal to convenience right now so Amazon is absorbing YOUR customer base, whether you like it or not. So you have to stand your ground and compete on retaining the customers you already have – as well as the ones you gained during COVID – and develop a lifelong relationship.
#3: Apps are Inserting Themselves Between You and Your Customer
Apps and direct-to-consumer brands are also inserting themselves between you and your customer. How many times has Seamless, DoorDash or Instacart interrupted that kind of connection your brand previously had with the customer? I’ll give an example – Doordash came in and said to customers, “Hey, we’re scaling up, we have a whole bunch of different products with super convenient options for you to buy food!” Before a customer would talk to the restaurant directly and have a relationship. Now, DoorDash came in and said we can do it better and more convenient so there’s a disruption to your customer relationship. You simply can’t develop the relationship if there’s a middleman.
#4: Paid Media is Becoming Pricier, Eroding E-commerce Margins
Paid media is getting pricier and it erodes margins. Google and Facebook grab a lot of the margins you may have had from your product already so by spending more money to get customers becomes more expensive. Plus, as everyone pivoted to e-commerce, everyone’s bidding now on more keywords that you once had success with, driving up the price and reducing your profits. Combined with retargeting, you end up paying Google and Facebook money to get customers to your site and then pay them again to bring them back. That’s a broken and expensive strategy.
#5: E-commerce Customer Acquisition Costs 600% More Than Retention
But there’s one more reason. The number one reason why email and SMS is so important now is that it costs about 600% to 700% more to acquire a customer than keep a customer. So not only will retaining and growing a customer make you more money, it’s cheaper than gaining a new one. Why pay Google and Facebook to bring you leads… and then pay Google and Facebook to get those leads back?! That’s inefficient, reduces your margins and it costs more in the long run. Existing customers trust more, they convert better, and they grow faster, you want to put all your energy into growing the customer lifetime value. And how do you keep those customers? Email, SMS and CRM strategies, built for e-c0mmerce. That’s why it’s so important to focus on growing that one-time buyer into a two-time buyer to a three-time buyer and brand loyalist.
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