The Ecommerce Defensibility Scorecard

Marketing

August 1 2022

After analyzing the marketing strategies of hundreds of e-commerce brands, we've started to notice commonalities that the best and most profitable businesses share. Some of these are black-and-white quantitative metrics indicative of the health of the business, while others are more qualitative tactics which we find always make our job easier as their growth agency partner. In this post, we outline the key benchmarks that indicate your brand is here to stay for the long term.

1. A blended conversion rate above 2.5%

While Conversion Rate will obviously vary greatly depending on your average order value as you can see in the below graph, with most non-luxury e-commerce brands, we find that a conversion rate below 2.5% makes scaling on paid extremely difficult in today's competitive CPM environment. CPCs only continue to go up on paid social. The more efficiently your site can convert traffic to revenue, the better you will fare in the paid acquisition gauntlet.

After analyzing the marketing strategies of hundreds of e-commerce brands, we've started to notice commonalities that the best and most profitable businesses share. Some of these are black-and-white quantitative metrics indicative of the health of the business, while others are more qualitative tactics which we find always make our job easier as their growth agency partner. In this post, we outline the key benchmarks that indicate your brand is here to stay for the long term.

1. A blended conversion rate above 2.5%

While Conversion Rate will obviously vary greatly depending on your average order value as you can see in the below graph, with most non-luxury e-commerce brands, we find that a conversion rate below 2.5% makes scaling on paid extremely difficult in today's competitive CPM environment. CPCs only continue to go up on paid social. The more efficiently your site can convert traffic to revenue, the better you will fare in the paid acquisition gauntlet.

A great graph of CR vs AOV. Source: Common Thread Co

2. An email capture rate above 3%

Almost equally as important as paid conversion rate is your email pop-up conversion rate. For your site visitors who aren't ready to buy, how effectively are you harvesting emails? An email pop-up of some kind is critical to converting these hesitant buyers into revenue down the road with your welcome email flow. Among most e-commerce verticals, Klaviyo benchmarking suggests that anything above 2% is at least average. However, we've seen brands convert as high as 10%, and find that the very best are consistently converting in a 3-5% range.

3. At least 15% organic revenue (Direct + Google Organic)

While it's possible to scale a business to seven and even eight figures a year without any real content marketing or top of funnel investment, margins will be thin and competition will be cutthroat. Having organic revenue makes the downtimes easier and gives you breathing room to invest in experimental paid channels. Investing in affiliate/PR, organic TikTok, influencers, and even a blog depending on your customer demographic can start to build this valuable revenue stream.

4. A dedicated in-house content creator/performance creative director

This is probably the most recent but most critical development that we've seen among the top in-house marketing teams: investing in someone who lives and breathes content creation. Having someone who spends their 9-to-5 sourcing influencers, testing different messaging, and quickly churn out new ads when they find a winning concept is the best way to tackle the level of creative iteration necessary to scale on paid social. Agency partners can also be an important part of this equation given the level of context they have with the other brands and their portfolios and the quality of their creative specialists, but having an in-house content star who understands the brands core ethos and customer better than anyone can complement an agency well.

5. A test-and-learn culture

The most common killer of struggling e-commerce brands is complacency and unwillingness to try new things when the status quo is not working. Landing pages, offers, messaging, targeting, lead magnets, creative - everything should be in a constant state of experimentation. When was the last time you tested new copy on your hero headline of your landing page? How about your email pop-up offer? It's the little gains that add up to make a difference across your entire funnel.


Here is an example of what the tabs of a high-octane growth team might look like. Many of these tabs should contain rows and rows of planned or completed growth tests, with results:

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We are a growth marketing agency based in Brooklyn, NY.

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