Many of us would like to forget 2020, and it looks like the same could apply to the majority of 2021. Unless you got in right at the start with personal protection kits, are a pharmaceutical company with a viable vaccine, or sell services that address the many socio-economic hardships customers all over the world are having to face, chances are your ROI has either taken a beating or become stagnant.
There are countless reasons why businesses are struggling as we get into the swing of 2021. It’s not all COVID. There’s Brexit, the Trump exit; and very uncomfortable foreign minister meetings, for a start. In the COVID tent, we can blame the mad rush to replace physical stores with digital ones that have saturated the already competitive eCommerce sector. We can blame unemployment rates practically the world over due to furloughs and cuts. Then there’s the uncertainty of when this pandemic will end – the ‘will it, won’t it’ worries about the effectiveness of a vaccine against viral mutations. We can point the finger at COVID for shipping delays (and point at the UK and Europe for increased shipping costs to and from the British Isles), look at the lack of face-to-face contact between teams and foreign travel for sales departments. The list goes on.
Is it as Bad as All That?
Friedmann LLP reported late last year that the US retail industry had grown in the third quarter of 2020 after a huge post-COVID slump. It gave commercial kudos to the online shopping habits of millennials and high-income earners, making semi-luxury goods rake in the profits. It also mentioned the general public’s willingness to try new brands as they are forced to remain at home and have time to carry out research.
The Bureau of Economic Analysis published an advance estimate of US GDP earlier this year that also denoted an upward curve to the end-of-year figures. Both personal income and disposable personal income plunged in the third quarter of 2020; both are now making a visible recovery. But a drop in personal and disposable income hardly seems to fit the third and fourth quarter GDP rises experienced in the eCommerce sector.
Perhaps increased spending is the result of a ‘you only live once’ attitude that has its roots in the pandemic. This isn’t such a far-fetched theory. Paul Schmelzing’s 2019 paper Eight Centuries of Global Real Interest Rates mentions that “The Black Death created not just the means for wider parts of the population for excessive consumption – but the traumatizing experience of sudden decimation in the earthly life also triggered the impetus to enjoy it to the fullest, while still able to.”
Is this what is driving the rise in online transactions? While, thankfully, COVID has not been as deadly as the mediaeval plague it has, to date, caused nearly 2.5 million deaths worldwide (12 Feb 2021). This has given the global population pause for thought.
Another theory as to why spending on goods and services is increasing is the end of travel as we know it. With holiday companies barely hanging on, other sectors are taking over their profits. McKinsey tells us that the global GDP driven by tourism had reached nearly $9 trillion pre-COVID. It even predicts that “tourism spending is not likely to return to precrisis levels until 2024”.
If the public aren’t paying for holidays and trips away from home, what are they going to spend their leisure money on? Add to this how local lockdowns are keeping people out of bars, gyms and even libraries, there appears to be a lot of money left over for retail therapy.
Average household expenditure in the EU in 2019 – before COVID – after housing, utilities, transport, food and non-alcoholic drink, education, health and communication were removed totalled 42.7%. This near-half of the monthly wage consisted of clothing and footwear, household furnishings and equipment, restaurants and hotels, recreation and culture, miscellaneous goods and services, and alcohol, tobacco and narcotics. Restaurants, hotels, recreation and culture made up 17.4% of the total expenditure of the average household. Where is this money going now? Not into savings plans. Intrum’s pulse survey has shown that less Europeans are putting money into savings accounts during COVID.
Good news if you’re providing products or services online. At least until people are free to travel at will and their fears of infection have disappeared.
Your Competitors vs You
So how is it that so many eCommerce companies are struggling? That although startups are flourishing, they are also floundering at an almost as rapid rate. What separates the high ROI from the average or – heaven forbid – low ROI? The following advice is attuned to today’s environment, where there is money circulating but significant, often very savvy, competition.
1. Audit Your Business
Every part of your business should be tested, compared and rated. From management to workers on the floor, there is no reason to have a mediocre team. This does not mean firing staff – although this may be necessary. It means giving your personnel all the tools they need for success. From training to task management tools, your aim is to keep your finger close to the pulse of the heart of your business. Feedback opportunities, evaluations and rewards for top performance are part of your marketing strategy. Because the right staff – driven staff – get the best results.
Internal audits aren’t just to ensure your staff are performing; they often bring to light hidden failings that, without shining a torch directly on them, simply melt into the shadows. Your internal audits are the equivalent of analytics tools. Without in-depth observation and the noting down of anomalies, you can’t expect to get the right results.
2. Aim for a Target Bullseye
Your ideal customer profile and buyer persona isn’t static. And if you don’t know what these terms mean, there’s a problem. Some marketers insist upon a need for broad target groups, others on the greater returns when opting for narrow ones. While it’s true that focussing your energy on hypothetical ideal consumers will stop you from investing in the wrong areas, targets are rarely hit or miss affairs. They are more commonly grey areas.
If you sell to individuals, you have to expect and respect differences. Your most successful competitors know exactly who they are selling to but they also know that this can change over time. They also invest, in lesser amounts, in less typical targets – those groups that don’t quite make the grade in the ICP but are nonetheless worth engaging.
For those who want to set up an ideal customer profile or are looking at groups that may fall slightly outside of it, your analytics team counts. If you have done your internal audit, you know you can depend on them to carry out an audit of your consumers. They will gather and analyze the data and produce the results you need to create high ROI buyer personas.
Using paid web traffic when you own a startup can significantly cut the analytics timescale by upping this data. You will find a long list of rated and reviewed providers at Webmasterreviews. When you buy website traffic as an established company, data gathered from large volumes of visitors from other niches can help you to expand into other profitable focus groups.
3. Future-Proof Your Company
We all want to earn from our business. From the new influencer-wannabe to the multinational sector-leader, return on investment is the driving force. We need to earn more than we invest, and the higher the ratio of earn:invest, the better. While all of us have a good idea of what we are doing right now, surprisingly few businesses can say in detail what they expect next year … or even next month.
After your internal audit, you know you have a team and a methodology you can trust. To keep up with and overtake the more successful of your competitors, you need a game-plan that brings your company into the future. Brainstorming sessions that think about the future of your product, the future of your public, and the future of your strategies bring countless potential adaptations to light.
Making money isn’t about counting money. It’s calculating growth in every department in terms of knowledge, skills, reputation, and preparation. Making 1 month, 6 month, 1 year and 5 year game plans that describe your company’s growth does not mean making a concrete commitment but is an essential set of guidelines that keeps your business on track.
4. Generate More Leads Than Ever Before
Online sales are on the up. And everyone wants a piece of that trend. The reason you are reading this article is probably due to the first part of the heading – Traffic Competition. Getting the traffic to come along your street, let alone enter your shop, needs to become one of your top investments in terms of staff and marketing. Always start with the assumption that your customers don’t know how to find you. This means implementing SEO, regularly updated and relevant content, backlinks with companies that offer services to the same target groups, email marketing and social media marketing.
Social media is one of the top methods for generating leads in 2021. Your worthy competitors will already have accounts on all of the top networks. If your marketing department requires training in this lucrative field or if you neither have the time nor the know-how to create profiles that bring results, it is important you collaborate with a professional. Selling on Etsy and need a service that knows all the ins and outs of Etsy rankings and marketing strategies? Etsy Geeks is a pioneer in single-platform expertise and one of the few that offers money-back guarantees. Do your research and locate the professionals – you simply cannot skimp on lead generation in 2021.
5. It’s All About Sales
With higher ROI at the top of every business goal, sales conversions count. The customer journey should never be a rocky one and it is your job to ensure that every step is fine-tuned to generate sales. Every member of your team should adjust their strategies and prioritise online transactions. Even human resources should be geared toward selling – they are responsible for your sales team.
This doesn’t mean hard-sell tactics. Potential customers no longer have to build up the courage to say no – all they have to do is click on an X. User experience must be pleasant and sales should be dependent on transparency, willingness to assist 24/7, the right product at the right price, company knowledge and trust.
Three Year’s Grace
If predictions are true and the tourism sector gets back on track in 2024, household expenditure will continue to show a gap that your product or service could partially fill. While local tourism will recover first, global destinations – the big spends of practically every household – need time. Not only due to restrictions and vaccination schedules but also because of the fear factor. Should the current vaccines not protect us as well as they should from future variants, how safe will consumers feel when trapped in a plane for hours?
While businesses should now be looking at how to keep their public happy during restrictions, they will once again have to compete with the new sense of freedom when international travel returns to its previous levels. Even in the current climate, your trendsetting competitors are starting to think about growth strategies in 2024 and beyond. By ensuring your brand is known and trusted now, you can do that, too.