Men vs Women, 6 Key Differences in eCommerce Marketing

Are you trying to decide whether you should target men, women or both with your new product?  I have something shocking to point out.  The buying habits of men and women are DRASTICALLY different.  Your entire strategy has to change to attract one or the other.  Here are six key differences to look out for depending on who your audience is.  Please remember this is based on my personal experience, and you are entitled to your own opinion in the matter.

1. Cost per Acquisition
When it comes to women, they love what's new and exciting.  With the right marketing position and branding, it isn't that difficult to get them to try your product.

On the other hand, men are very set in their ways.  It is hard to convince a man to try something new.

The result of this is a higher CPA.  It takes less marketing to get women to try a product than it does men (this is obviously a broad generalization, but assuming everything else is equal).

This means it takes more upfront cash to get a male customer base growing.

2. Lifetime Value
This is where men make up some ground.  As easy as it is to market to a woman and get her to try your product, one wrong move and they will never forgive you.

I have had very different experiences marketing to men.  At Swag of the Month, we could send someone the wrong size, a color they stated they hated, and make countless mistakes.  The response would usually be something a long the lines of "can you just make sure this doesn't happen again."  They wouldn't even ask for a return or exchange most of the time!

At Ellie, we saw average lifetimes of about 4 months.  At Swag of the Month, we were seeing around 14 months!  Once men like something, they are a lot harder to lose.

This allows you to invest more up front, but eventually you will make higher returns (see my last blog post on key metrics).

3. Emotion vs. Logic
This all comes down to the way you position your product.  To get the best response, women want to see the emotional appeal.  They want to know the lifestyle behind the brand.  How is this product going to make them feel.

Guys shopping habits are much more logic based.  You need to appeal to why they need what you are selling.  Why does it make sense to purchase this.

Lifestyle can come into play for both, but men are going to think about it as a "why do I need this?" and women will usually think more as to "how is this going to make me feel?"

4. Social Media Strategy
This has been surprisingly tricky.  Women love to look at products.  You can push your actual brand all day and engage them on the lifestyle and product images (especially in fashion).

With men, you have to almost sneak the product in.  Guys are not on social media to look at pictures of fashion, just as much as they don't go to the mall to browse.  So with this in mind, you need to actually engage them on their interests.  Post about things guys will want to read and see, and then connect it to your product (but not too much).  Social media is a much more delicate thing when it comes to men.

5. Product Navigation
Basic rule here, girls love to shop and guys want to get in and out.  A men's site needs to have a tight funnel and focus them on getting exactly what they want and getting out.  Girls want to browse and look through products.  Girls are looking to spend much more time on the site.  A small product line and focused navigation is better for guys and a wide selection and user friendly interface for browsing (like fab.com) is much better for girls.

6. Customer Service
This is a big one.  When Swag of the Month had 1000 subscribers, we would get around 30 emails per month in customer service.  When Ellie hit 1000, we were getting about 1000 emails per month.  This goes back to the "men never stop and ask for directions" thing.  If women have a problem, they let you know it.  They want acknowledgement, validation and help.  Men are a lot more forgiving, want to handle it themselves, but they also don't give you the opportunity to make a problem right as often.

So think very hard about who you want your customer to be and how you model your business based on that.

The 5 Key Metrics to Analyzing your eCommerce Business

Many eCommerce sites are completely missing one or more of these key metrics.  The most important data points about your business.  Without knowing each and every one of these points, there is no way you can know if your business is sustainable.  Make sure when starting out, you are tracking every one of these metrics so that you know if you are going to survive, let alone make money.

CPA (Cost in Marketing to Acquire Each Customer)

CPA is your main marketing metric.  You calculate this by taking your marketing spend and dividing it by newly acquired customers.

i.e. Let’s say you spent $150,000 in marketing in the month of July.  Now let’s say that you got 7,500 new customers during July as well.  You would calculate your CPA as 150,000/7,500=20.  Your CPA during July was $20.  That means that for every $20 you spend given everything stays the same, you will get a new customer.

LTV (Lifetime Value)

Now that you have your CPA, it is extremely important to know your LTV.  LTV is measured by the average amount of revenue generated by a customer in their lifetime.  When analyzing this, it is also important to know how long this lifetime is usually as well (do they spend mostly over 3 months, 6 months etc.), that way, you can then calculate an estimated ROI taking your CPA and your LTV.

Let’s say that using the same case as above, the LTV of your customer is $200 over 6 months.  Now you know that, if all things remain constant, if you invest $20 in your business, you will make $200 over 6 months.

Gross Margin

This is where a lot of ecommerce businesses aren’t looking.  You have your LTV, but that is just based on revenue.  What percent of that do you actually take home after your cost of goods?  To calculate this you take your retail price, let’s say it is $50, and then you take the cost it takes you to get it out the door, let’s say this is $20.  You take 50-20=30, then 30/50=.6 which means your Gross Margin is 60%.

This means 60% of the revenue coming in actually goes to your business and the other 40% goes to cover the goods you are selling.

Overhead

Keep your overhead low!  All the costs of running your business other than your goods.  Your employees, office, equipment, anything at all that you are spending money on to keep your business open.  Make sure you know what you are spending (this may seem obvious, but you’d be surprised how many people don’t know this number).  Taking the case from above, let’s assume that your overhead is $50,000 per month to pay yourself, your employees, your office rent, equipment and all of your business expenses.

Profit

Don’t let anyone tell you this number isn’t important.  You want to make money and this is where you do.  Focus on getting your “bottom line” or Profit up by make sure to keep your costs under control as well as growing your revenue.

Now let’s look at the examples.

$20 CPA

$200 LTV over 6 Months

60% Gross Margin

$50,000 Monthly Overhead

$150,000 spent for 7,500

This means:

You will make $1,500,000 in revenue over the next 6 months (7,500 customers x $200 LTV)

$900,000 after your Cost of Goods are covered (1,500,000 * 60%)

Your overhead will cost $300,000 over the next 6 months (50,000*6)

After 6 months you will end up with $600,000 (900,000-600,000)

So if you invest $150,000 in marketing, it will take approximately 1.5 months to make that money back (150,000/(600,000/6 months)) and then you will make approximately $450,000 profit over the remaining 4.5 months.

Recap

CPA, LTV, Gross Margin, Overhead, Profit

Know these key metrics and you will know how to analyze your business.

Why Is My Ecommerce Site Not Making More Money?

Through my years of consulting and building ecommerce businesses, the most common problem I see is a lack of understanding of “The Funnel.”

The Funnel is the name for the different levels of customers that eventually result with some percentage purchasing.

There are 3 levels to the funnel – IMPRESSIONS – LEADS – CUSTOMERS

Step 1 – Impressions

Impressions are the top of your funnel.  These are all of the people who have seen or engaged with your brand in any way.  There are many ways to get impressions to your brand:

1. Advertising – Advertising in any way can increase your brand exposure and therefore your impressions a ton, but it usually comes with a cost.  Advertising refers to any channel in which you are pushing your brand in front of people.  This can be online sponsorships, media buying (banner ads, billboards, tv, radio etc), really any channel to just blast your brand out there.  Keep in mind, even though this costs, it can really help push the rest of your “top of the funnel” strategy.
2. Word of Mouth – This would be any form of people talking about your brand.  You can incentivize this by creating referral programs and other rewards for talking about your brand.  There are arguments on both sides though, that incentivizing can create less of a brand loyalty as they become motivated by the incentives, instead of just sharing your brand organically.
3. Publicity – Getting high level influencers such as publications, blogs and even influential individuals to notice and share your brand.  This is an incredible source of impressions because it comes with brand validation and trust.  Most people trust the reputation of the editorials they read and therefore trust what is written.  If TechCrunch writes about how amazing your new product is, most of their readers tend to at least gain some level of trust.  There are not many better ways to help push someone through your funnel.

Remember, if you miss this step, you will constantly just be retargeting your existing customers and never building your customer base.

Step 2 – Leads

Once you have this impression and interaction, the next step is converting that person to a “Lead.”  Someone who you can validate and retarget to push through your funnel.  There are a couple ways to generate leads:

1. Contact Information – One way to generate leads is to get their contact information.  With ecommerce, the most important piece is their email address.  Nothing converts Leads to Customers more than an email address.  The idea is to entice an individual when they receive impressions from you, whether through advertising, word of mouth or publicity, to give you some level of personal information so that you may continue to contact them on your on accord.
2. Cookie Placement – A great advantage to being a website is that when someone visits your site, you have the ability to place a “cookie” on their computer.  There are several technologies to then retarget these specific people with unique ads.  These ads can be focused on converting a Lead into a Customer, instead of an Impression into a Lead.  A simple strategy like this turns a website visitor from an impression to a lead.

Remember, without creating leads, you will constantly have to drive new traffic to sell and will be missing out on building a recurring customer base.

Step 3 – Customers

This is where you make your money.  You now have tons of impressions, some percentage of leads and now you need to convert.  Using banner retargeting from your cookie placement and email retargeting from all of the emails you collected will help drive traffic, you should be consistently converting leads that had not initially purchased.

Now that you have all of these customers, it’s time to increase your “Life Time Value” or in other words, the total amount a person spends with you in their lifetime as a customer.

You can do this by consistently (but not so much as to annoy them) contacting them and providing value above and beyond what they had purchased.  If it’s something they need more than once, contact them regularly reminding.  If by purchasing your product, it indicates they would like other products as well, show them those.  You can also offer discounts and other incentives, but tread VERY CAREFULLY as this can really hurt your brand and cause you to constantly have to discount to bring back consumers.

Follow these steps and you will see a much higher return on your web traffic and a faster growing business.

If you have any questions or comments, please feel free to email me at erik@hawkemedia.com

6 Truths About Using Facebook

Paying for likes on your facebook page is NOT going to skyrocket your business growth!  It is a common misconception that facebook is the most important marketing channel in this marketing age.  While it is important to HAVE a facebook page, it’s not going to drive you a significant amount of new users to your site.

Here are the correct ways to use facebook:

1. The best users are the organic ones

Stop spending money to grow your facebook page.  The days of it increasing your credibility ended when you could buy 10,000 Filipino likes for $50, everyone can see how many are actually engaging anyways.  You do not want your page saying “54,000 likes, 126 people talking about you.”  Those likes have no benefit anymore.  You want to encourage your customers and fans to like you so that you have a forum for them to communicate directly with you publicly and spread your message.

You only gain credibility from activity.

2. It is not a Billboard, it is a relationship

Most brands seem to love to just blast their fans with sales and images of their products.  The people on your page should already know who you are (unless you ignore the advice in step 1).  That means this is an opportunity to create a relationship and brand.  Make your posts engaging and more in line with your brands lifestyle.  No one wants to see “This is our product” posts.  An example: If you have an active wear line, don’t just make constant posts about the fact that you are an active wear line.  Talk about things that surround the lifestyle of someone that wears active wear.  Healthy Eating Habits, Great Workouts, and then highlight specific products in there, but explain why they are great.

Talk about things as if you are a part of an interest group with your friends around the lifestyle of your brand.

3. Communicate Directly with Customers

Facebook is an opportunity for your customer to feel like they will reach you directly as a brand and be heard (because it is public).  Take advantage of this opportunity and show all of the observers how you are great at handling customers questions and requests.

WARNING: Be wary that every mistake you make can end up being splattered on your facebook, so make sure this is being monitored closely and managed quickly.

4. Bring a Personality to your Brand

Create your voice and your personality.  People hate corporate language and bland statements from the brands they love.  Whoever is posting on your facebook, make sure they have a voice and personality that matches your brand.  Are you a men’s tshirt company? Be a man when you post, crack jokes, talk like a human being and people will gravitate more.

BE HUMAN

5. Encourage Active Social Media Users to be your Ambassadors

There are many great ways to encourage sharing among your fans.  You really can just bluntly ask your followers to share certain posts (just don’t overdo it).  A great strategy is to find influencers that fall in line with your brand and work out collaborations to expand your visibility on Social Media.

It is very important to know who the players are in your space and who the influencers are.

6. Create Long Term Relationships

By following these different directions, this allows you to create long term personal connections with customers that will fight for you, continue purchasing from you and spread your message.

Harness that opportunity and treat them well, you will reap the rewards.