Vol. 127 - NO. 39

Blog Startup CPG

SINCE 2019

How to Win at
eCommerce and Influence Shoppers

Ori Zohar is the co-founder of Burlap & Barrel, a social enterprise that sources incredibly flavorful single origin spices directly from smallholder farmers around the world.

We launched Burlap & Barrel in early 2017 sourcing single origin spices directly from our partner farmers in a handful of countries. From the early days, our small business relied heavily on restaurants and chefs, who served as our best customers and legitimized our nascent business to the home cooks that were looking for a better source for their spices.

When restaurants closed in March 2020 due to the pandemic, we were freaking out; restaurants drove more than half of our revenue. While the fear and uncertainty were setting in, we noticed something else happening. Orders from home cooks started pouring in, and each week was better than the previous one. By May, home cooks more than covered the lost revenue from our restaurant customers and set us up for a period of growth that’s still going strong. There’s no silver bullet in going from zero to millions of dollars in eCommerce sales. But there are certainly strategies — not tactics — that built Burlap & Barrel and keep customers coming back again and again. Today, I’m going to share my top three strategies with you.

1. The importance of actually listening to your customers

Do you know the story about Howard Moskowitz? Howard was the one who convinced Campbell’s Soup to create a line of extra chunky spaghetti sauces in the 1980s that went on to drive over $600 million of sales in the 10 years since it launched. Campbell’s hired the Harvard Ph.D. in experimental psychology to explore just about every conceivable variable for spaghetti sauces. He realized that ⅓ of people preferred a chunky sauce, yet none of the major players offered one.

The “Big Sauce” companies were too busy copying off of one another and making slight variations off of their existing products to realize that they were missing a huge chunk (pun!) of the market. (Get the full story from Malcolm Gladwell)

The reason I’m bringing it up is that most entrepreneurs I speak with start to think about eCommerce by looking at more established companies and copying them. Sure, you can look at Amazon or Walmart and see what they do, but you’ll end up missing the bigger opportunity: to better serve your own unique audience. You’ll end up making an eCommerce site that feels more like a generic off-the-rack suit rather than one that’s custom-tailored for your customers.

Assuming you’ve already got a site up and have made some sales, start by reaching out to every single customer that places an order. This is about qualitative feedback, not quantitative. Depth of information is more important than quantity of responses.

Don’t send them a survey or an automated email – reach out to them with a personal note thanking them for their purchase and asking a few follow-up questions. Oh, you also grew up in Baltimore? How did you find us? How are you planning on using our spices?

If they respond (and many will!), follow up with another set of open-ended questions: What did you love? What could we do better? What else do you wish that we carried?

That’s where the magic happens. You’re going to get two things out of these conversations: (1) the customers will be blown away that the founder of a company they like reached out to them and (2) you’ll get invaluable feedback about your eCommerce website.

Over the course of a few dozen conversations, you should be able to figure out who your customers are, why they love your company, and various specific pain points and ideas on how to better serve them.

I set up a call with a frequent customer in her 70s who was willing to share her feedback. Over the phone, she narrated her shopping experience while browsing our site with her tablet in one hand and a magnifying glass in the other. We increased text sizes that day and reduced the number of columns on the desktop and mobile view of the site so each product could have more real estate on her screen. She wondered aloud why we had the text “Add to Cart” but the cart icon was a shopping bag – so we fixed that, too.

We personally learned that our customers were older and less urban than we expected, which impacted our text size, color contrast, and written tone on our site. A few customers suggested we add an easy way to buy one of every spice that we carry – so we added a Complete Collection to our site in 2018 – two years later, that one listing drove more than $100,000 in revenue.

Customers will leave your site when they hit an obstacle, like if they can’t find what they’re looking for, can’t understand your shipping terms, or can’t get a feel for what they’re going to get and when. Most companies view customer support as a cost center and make it hard to reach out, missing out on very valuable feedback directly from their would-be customers.

Instead, embrace the feedback! Make it as easy as possible to reach out, and encourage feedback at various points. Then you don’t have to make a guess at what they want or what they’re missing – they’ll just tell you, which also gives you a chance to win them back.
Side Note: If you don’t have a live site yet, get a site going, even if it’s very rudimentary. Then work on getting your first few sales and reach out to every single one. The quality of data from actual customers is so much more valuable than hypothetical ones.

2. The most important eCommerce metric

The most important metric for the effectiveness of your eCommerce is your site’s conversion rate. Your conversion rate is how many people completed a purchase divided by how many people visited your site. It can tell you whether your customers arrived with a high intent to purchase, whether they were able to find what they were looking for and whether they were able to check out without any surprises.

Your site’s conversion rate will be the difference between making money or losing money on each sale, especially if you’re spending money on advertising. Speaking of advertising, it’s also a good metric to evaluate the quality of the customers that you’re getting from each channel. But we’ll get to that later.

I’m less concerned about your conversion rate in an absolute sense, although if it’s under 1%, the only way to go is up! Instead, focus on the relative change to help answer the question of whether the changes you implement on your site make it better or worse. I don’t mean day by day, but week over week and month over month. Getting it to improve is through many, many small victories… or whatever the opposite of “death by 1,000 cuts” is.

You can find your conversion rate in your eCommerce platform’s analytics or by installing Google Analytics. Either way, I recommend you set up Google Analytics, if for no other reason than to start gathering granular data about your site. Even if you don’t use it today, it’s good to have it accessible in a repository. And it’s very easy to set up – Google Analytics has built-in integrations and walkthroughs on how to set it up with just about every eCommerce platform.
Once you know what you’re tracking, you can start experimenting. In general, I try to make at least one improvement to the site each week and track the results. One week, we added an app that recommended products based on what was in visitor’s carts – about 5% of them took the recommendation.

Another week, we added the ability to sign up for back in stock alerts – about 20% of customers who received a back in stock alert went on to make a purchase. None of these changes had a massive impact on our conversion rate, but all of them improved it – and the culmination of the changes increased it significantly.

Side note: Sometimes changes that seem obvious and intuitive will actually lead to a decrease in your conversion rate. Don’t take it personally – but try to understand what happened and what you can learn from it. Then try again.

3. Finding customers without advertising

Now that you know your customers well and your conversion rate is high, you’re ready to start promoting your site. Too often, entrepreneurs start spending big dollars on Facebook/Instagram ads or Google Ads before completing the first two steps. Then they’re surprised why they’re not able to drive enough revenue to justify the costs.

Here’s the simple math on why it doesn’t work. If you spend $2 per click, and you send 100 people to your site, you’ve spent $200. If your conversion rate is 2%, then you’ve spent $100 per sale. If your conversion rate is 6%, you’ve cut that down to $33 per sale. Same ad, different site, hugely different results. And if you’re good at driving repeat purchases, then the numbers start to look good.

You’ll have to figure out your “breakeven number”, but the main point is that too many companies start spending on advertising before improving the conversion rate on their site and end up losing money on those sales. That’s not sustainable.

Think of your acquisition channels as a pyramid, with the lowest-cost customer acquisition channels at the top. What are those? Once you’ve exhausted those channels, only then should you move to the more expensive ones.

Channels where you have a competitive advantage are typically lower cost – like email marketing to your existing customer base. Why? You’re reaching out to customers who already know and love your products, and it’s always easier to get a repeat purchase from an existing customer than getting a new customer to make their first purchase.

Here are three examples:

Public Relations: I’ve written about our approach to PR here, but the gist is that you should never, ever, ever send out a press release or pitch to a journalist. Think of this as relationship-building rather than transactional – it often takes 6+ months from first connecting with a journalist for the stars to align for the right angle, publication, and time, but it’s worth it!

Where to start: set up Google Alerts for articles written about your category, then reach out to the authors with a friendly note. Offer to share your expertise should they ever need it, and then follow up periodically to see if they need help with any stories or topics or with a friendly update about something relevant to their beat or expertise.

Wanna practice? Sign up for HARO and start fielding pitches.

Partnerships: Partnerships are an often overlooked channel. This is where you’ll find a company that has a complementary product that they’re providing to a similar audience to your own. You can either carry each other’s products or create a collaborative product or kit that involves both companies. It’s a great way to get your product in front of a new audience, and introduce your customers to something new that they will love.

When companies look for partners, they often reach out to huge players, which is always a long shot. There will be challenges with scale, as well as a much bigger/longer setup process with a larger company. Approval processes with bigger companies can take 6-12 months or longer, and their flexibility is always more limited.

Instead, we try to find companies that are in a similar stage or a couple of years ahead of us in terms of growth. Their audiences will be more similar and more receptive to your products (and vice versa).

What it means for your bottom line is that instead of paying for advertising, you’ll be selling your product at wholesale margins, getting it in front of a new audience, and driving DTC sales. It’s turning a cost center into a revenue center!

Newsletters: You should be emailing your customers more often. I’m not talking about sales, deals and steals – those drive customers who are price sensitive and will wait until the next opportunity to purchase your products at a discount. You’re teaching your customers the wrong way to engage with your brand. That’s why we never, ever have sales.

We started writing newsletters when our email list was practically zero, and now we’re at over 50,000 subscribers. Even if your email list is close to non-existent, send newsletters out! You’ll get better at writing an engaging newsletter with each one, and since they’re essentially free to send out, even driving a handful of sales makes them worth your time.

We make it easy to subscribe – it’s part of our checkout flow. We don’t buy email addresses or drop in names from sweepstakes – that’s how your newsletters get high unsubscription rates and end up in the spam folder. In fact, we unsubscribe people automatically if they haven’t opened an email in a while – we want to keep a tight email list of engaged customers!

In terms of the mechanics, we send out newsletters twice a month that cover new launches, new harvests, new collaborations, farmer stories, cooking playlists, online classes, behind-the-scenes of running a small business – anything that would help our customers get better acquainted with our products and our story. Your customers want to hear from you and to connect with your company. They’re looking for an excuse to make their next purchase!
The rule for our newsletters is that they have to have enough valuable content to make you want to open them and read them. Since we’re not sure what will resonate with each customer, we typically have 3 items in each newsletter, so that if you don’t like chilis, for example, you might be interested in our latest collaboration or to learn about our Spice Forum. If we don’t have enough content, we skip that newsletter.

So there you have it. This article is by no means comprehensive, but hopefully gives you some ideas on how to build a multi-million dollar eCommerce business.

I’d also be remiss if I didn’t say this explicitly: there are many ways to build a successful company. eCommerce is one of them, but not the only path. If this is right for your product, your business, and your skillset, then you can make magic happen.

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