Nurturing the email list contributed to this growth. During the time that SYE owned the business, the email list rose from 30,000 subscribers to 126,738 subscribers. The email list received exclusive offers, so more customers wanted to join.
The store started carrying products that customers naturally bought more than once. Marketing also focused on the reasons that people buy. Most products catered to women, but some ads focused on the male audience that buys gifts for women.
New Year's and Valentine’s Day promotions of this sort made the business profitable in the winter months. During SYE’s ownership, this was a first because January through March had consistently been unprofitable months in previous years.
There’s a common phrase in business that consumers buy from the people and brands they know, like, and trust. The brand was well known, but the like and trust factors needed shoring up. The brand lacked personality and feeling.
When SYE acquired this eCommerce store, the brand was little more than a logo and colors. As is common for the industry, both Wick and the previous owner remained mostly anonymous. There was no brand story. There were no people for customers to grow to like and relate to.
Consumers could only equate this brand with products, and the products were not unique to the store.
The brand needed a face, and with a lot of strategy and a bit of creativity, a character named Tracy was developed. Tracy cost $10 for a designer on Fiverr to create, and she played a key role in taking the large business to new heights. Tracy’s name and face donned everything from chatbots to order updates and social media posts. Consumers began to trust the brand more when it had a more human touch to it.
This human touch grew when SYE purchased a customer support phone number for the brand. The phone number increased perceived legitimacy of the business and provided another way for customers to reach out.
There was further implementation of expanded customer support options. New hires handled more customer support via email and Zendesk. Customers could also receive support via text message.
Before the SYE acquisition, customer satisfaction was not measured. Responses from surveys helped to improve the business based on customer feedback.
Purposeful marketing strategy is key to success in eCommerce. Facebook was originally the only source of traffic for the business. This was a key reason for a lack of consistent profitability.
Traffic diversification helped to increase the valuation of this business. When it comes to marketing online, there are going to be “bad days.” If you are marketing in a variety of places, those bad days don’t have as significant an impact on your bottom line.
SYE implemented a marketing strategy that utilized Twitter, YouTube ads, organic social media on Facebook, email marketing, text message marketing, Pinterest, Google ads, and Google SEO.
By advertising on a variety of networks, the business was able to tap into new customer markets. A “bad day” on Facebook no longer spelled a loss. If one ad network performed poorly, the traffic from the other networks could compensate.
The use of Google ads also led to an increase in valuation. A business that comes with a perfected marketing plan is much more valuable. That’s why under SYE’s ownership, $5,000 was spent per month testing and perfecting a list of Google keywords to bring in more business.
Google keywords are a very valuable method of marketing when the keywords work. After testing a wide variety of marketing, there was data to back the six methods that worked the best.
The new owners of the ecommerce store valued this keyword list and added to the benefit of owning this particular store.
The number of employees needed to grow for the business to scale. SYE tripled the staff within 90 days of acquisition. One of the employees was a skilled writer, who wrote high converting product listings and sales copy. The other new employees added to the order fulfillment and customer service teams. Finally, employees could work for efficiency and profitability rather than mere necessity. This growth primed the company to handle the explosion of new business due to better marketing.
With better management, marketing and profitability, there was also an opportunity to increase valuation. Profitability was a strong detractor for the valuation of the company. In 2017, the year before SYE purchased the company, the business made $658,000 in revenue, but profitability was only 6.4%, which is well below average. To get profitability more consistent with market rates, SYE focused on increasing profit during off season months.
The Valentine's Day and New Year's promotions helped to eliminate months of profit loss. Since there were more than two employees, processes and costs were more consistent. Time consuming problems no longer caused productivity to halt. Operating costs, labor costs, and advertising costs stabilized and became more predictable. There was a much clearer picture of the number of sales necessary to make a profit. These changes increased the profitability rate of the business to 9.29% in the store’s new 7 figure revenue, thereby nearly doubling annual profit.
To decrease fulfillment costs, SYE switched to a single mega supplier, rather than hundreds of smaller ones. Accounting became quicker and internally cheaper. Bulk orders saved the company money, and shipping costs also went down. Customers received single deliveries for multiple items in as little as 7 days, rather than the original 21 days.
In 11 months, SYE sold the company for 47.78% more than the original purchase price. In that time, average tickets grew by 32.24%, revenue increased by 32.43% and profits rose by 18.18%.
SYE has the expertise to identify roadblocks to making a business scalable, sellable, and profitable. The company has a keen understanding of the elements that make a good business as well as the experience necessary to transform a good business into an great one.
If you are considering selling a business or investing in an existing business, contact SYE enterprises today.