Common E-commerce Mistakes Made by Small Companies–Do These Sound Familiar?

I’m a big fan of my good friend and industry colleague Bill Lapierre, who works at Datamann in Vermont.  He is a no-nonsense guy and also one of the smartest direct marketers I’ve ever met.  Bill does a regular blog, and in his most recent post he described several common mistakes that he sees small catalog companies make on an ongoing basis.  Bill has spent the majority of his long career in the catalog realm, and his post struck a chord with me because I have spent the last 15 years in e-commerce–and I instantly saw parallels between Bill’s comments about the catalog side of things and my experience on the digital side of the house.  You can see his posting here, and if you read it first you will have a fuller understanding of this whole picture.

So, with these comments as background, I’m going to borrow topics shamelessly from Bill’s blog and talk about five common mistakes I see in smaller companies involved in e-commerce:

1.  Under-capitalization and entrepreneurs:  By far the most common thing I see in small entrepreneurial companies is owners or officers who think they know more about the digital realm than they really do.  They often make decisions based upon the wrong things, supremely confident all the while that they are on the right path.  Then when some time goes by and their new web initiative fails miserably, they are both surprised and in a bad spot because they often don’t know where to turn–and they’ve run out of cash to fix the problem anyway.  In most cases they would have been better off admitting that they didn’t know everything, and bringing in some e-commerce specialists who could have educated them and helped them make the right decisions the first time.

And this phenomenon is only going to get worse because merchants are going to be forced to upgrade their e-commerce systems to accommodate the oncoming storm of mobile device usage.  Spending on platform upgrades and maintenance will have to increase if anyone wants to stay in business, and in my experience, few companies are successfully anticipating the “mobile” freight train that’s headed their way.

2.  Publishing “Art”:  This is a biggie in that I cannot tell you how focused people get on how the website LOOKS, while simultaneously ignoring how it WORKS.   They often add new features and functions without testing them, and then wonder why their response rates drop off or they get more cart abandonments.  If it comes down to making something pretty or building something that converts visitors into buyers, I’ll take the buyers every time–why else are you in business?  I have often had to become brutally frank with my clients by saying:  “Look, do you want to publish art, or do you want to sell some stuff here?”.

3.  Getting talent in the right places:  Many smaller companies who still have multiple people working on the catalog side of things might have one (or maybe two) overworked and undereducated people assigned to manage ALL of the web efforts that a company needs–site management, technology upgrades, paid search, SEO, product management, email, you name it.  They expect these people to have all of these different skill sets, when these days it really takes a specialist in each area just to simply have enough knowledge and skill to compete in the marketplace at all.  These poor souls are basically doomed from the start because they cannot possibly know or understand the fine points that make the competitive difference in each specialty–they are spread too thin!

So because of this state of affairs, the results in the web channel are often not as good as they could be, and then management allocates fewer resources, and the downward spiral continues.  Most of them would be better off hiring skilled consultants on a long-term basis for each of the special areas like paid search, SEO, email, and others.  But finding such a consultant they can trust is often difficult, because when it comes to hiring them these companies don’t even know what they don’t know.  The answer?  Educate yourself, find a good consultant for each area, trust them, and hold them accountable.  And don’t expect one or two internal people to know it all!

4.  Focus where it counts:  Oh, don’t even get me started on this.  Marketers are always chasing the latest shiny object (Facebook/social media of the week is a big one in my book) while ignoring the basic blocking and tackling that is part of any effective e-commerce operation.  Like:  What have you done lately to optimize your email campaigns?  How could you increase your open and click-through rates?  When was the last time you looked at the ROI on your paid search program on a keyword-by-keyword basis?  What are your top organic search terms and what are your search positions?  When I ask these questions, I mostly get blank stares, but THIS is the important stuff–NOT how many “Likes” they have on Facebook.

5.  Business by hunch:  Avinash Kaushik is the Google guru on website analytics, and he’s written a couple of well-received books on the topic.  In one of them, he introduces the concept of decisions that are made based upon HiPPOs (Highest Paid Person’s Opinion)–and NOT based upon data and real analysis.  In my experience, this happens all the time.  The home page gets a certain banner because the VP Marketing (or the CEO) wants it there, not because it makes any sense based upon results.  There is an enormous range of analytics data that is available, and I’ve always felt that very few companies use it well–or use it at all in some cases.  These days, there’s no reason for this, except big egos.

Good luck in the final stretch of the holiday season!

Bud Reed

The E-Commerce Curmudgeon