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Social media has never been more connected to commerce than it is now. The pandemic has made direct-to-consumer ecommerce a priority for legacy players, creators and small businesses looking to diversify revenue streams.
Businesses will have more options to attract customers through Pinterest, TikTok and Instagram. But what happens if these attention models become too costly? What will it take for ecommerce merchants to make their first sale? They will be selling their first 100 to 1,000 orders. What is the best way for merchants to create repeatable sales models? Community is the answer. Every ecommerce seller has a unique, untapped opportunity and moat. Shopify acts as your back office for ecommerce, while community serves to protect you. We’ll be discussing this helpful framework throughout the article.
Let’s begin with the ‘day one’ merchants. Entrepreneurs who have not yet made any sales and have only just launched their ecommerce site. Your first sales will usually come from family and friends, however, it may be hard to find new customers. Logistically speaking, many founders have used social media to attract thousands of customers over the years. This is a great way to get customers, particularly if your buyers personas are known. Facebook and other companies are great at finding customers. You can put your credit card into their system and they will optimize ads for you. Shopify is a great example of attention-based business models that are scaleable and powerful. Cost effectiveness is the main drawback to using social media for customer acquisition. Merchants in ecommerce face difficult decisions about customer acquisition. There are more places to get customers than ever before.
Although social platforms make it easy and convenient for merchants to increase sales through ecommerce, it can be overwhelming. Paying hundreds of dollars every day on a Facebook ad is a lot more than paying $29/mo to Shopify to run your entire website. Day one merchants also have an alternate method of acquiring customers at scale: Influencers. Two things make Influencers great: they are storytellers, and have an audience. Theoretically merchants could find an influencer to help them get their first sale faster (and many more).
Both in influencer and ads marketing, the buyer behavior is concentrated from the start and continues to decrease until it is reengaged again. What can you do to increase your retention? How can you increase retention and decrease marketing expenses?
Let’s now talk about community. A community isn’t a group or an audience. A group of people who share a common characteristic is called a community. Healthy communities are aligned around values and common goals. It is possible for members to share their experiences in a repeating manner and form relationships. This sounds a lot like the kind of experience you want for your ecommerce business. This is our opinion.
It is important to define ‘community’. However, it can be difficult to put into practice. These are the functional units that make up ecommerce communities:
- Monetary incentives
- Interactions between members
Recruiting. This can be broken down into pieces. You will need to create a place for members of the community to apply. Another effective method is to give status to members so that they can invite others who share the same mission.
Monetary incentives. Ecommerce communities offer the opportunity to align financial incentives among your members. While referrals can be the most effective way to set up incentives, there are other ways that you can create opportunities for economic growth through participation and advocacy.
Interactions between members. Meeting frequency is what makes great and bad communities different. You don’t have a community if members of your group aren’t meeting up. Regular meetings are important and members should be encouraged to attend. Meetings can be focused on business opportunities, selling, suggestions for products, and feedback.
At this point, if you’re not convinced that community should be at the core of your marketing strategy, here are the business cases for the above (h/t Erik Torenberg):
- Increase retention of customers already in business, esp. Increase retention of existing customers, especially those with high-value clients
- Increase repeat sales
- Marketing costs can be reduced
- feedback / idea generation
- Reduce customer service costs
- New sales leads
- Retention and recruitment of employees
Marketing and networking with influencers
You may now be wondering what influencer marketing means. Many people have trouble defining an influencer. They are people who influence others’ decisions. This could mean someone who has one follower, or someone with 100M. Your community will expand faster if you have a larger circle of influence. This assumes that people who accept you into your network are aligned with your values. They are not an end or starting point, but a catalyst. They are just like an advertisement on Facebook. But they can access attention. The difference is they also have amazing content creation and storytelling skills.
Shopify and Community
Shopify faces many challenges. The community can help solve these problems. First, merchants who fail to succeed on day one will be losing paying customers. Shopify will not be able increase its revenue per customer if they can’t scale/lower customer acquisition costs. Shopify must continue to concentrate on customer retention, cost-effective acquisition, and long-term sustainability, given the rising number of SMB closings. Merchants can scale up their business with community strategies such as those described above, regardless of stage.
Publiated at Tue 31 August 2021, 13:18:46 (+0000).