We Need Less Digital Marketing & More Selling Systems

For the past decade, digital marketing and online retail has been about churning through inventory — any inventory, at any price.

Digital marketing tells you to go big on Cyber 5, without stopping to consider if the customers you acquire will ever come back. Digital marketing takes a strictly near-term view: last click ROAS, today’s traffic numbers and today’s conversion rate. Digital marketing puts your business at the mercy of toll-takers like Google and Facebook.

And that used to work. When we were playing the game of eCommerce on easy mode, customers were easy come and easy go. But in today’s eCommerce landscape — playing on hard mode — it is impossible to run a profitable, sustainable business that way, as many are finding out.

Enter: Selling Systems.

Selling Systems are scalable, repeatable strategies for identifying relevant customers and nudging them to convert. Within the Consumer-Based Growth Framework relevant customers are people who can use your product, afford your product, and like your product. Selling Systems are not about investing millions in the hard sell, but about identifying and quickly nurturing relatively warm leads.

Every digital marketing channel can be studied as a Selling System, but your digital marketing mix does not function as a Selling System if it is not used strategically. In fact, Google and Facebook can command the big bucks because they’ve done 75% of the work of setting up these systems for you.

What do I mean by “every digital marketing channel is a Selling System”? Each digital marketing channel is good at selling a different part of your product assortment. This is because each channel has its own audience that was cultivated by the company that created it.

Instagram browsers are different from Google Searchers who are different from readers of a niche blog. Even if the same human is consuming all three of these media, they’re doing it for different reasons and are therefore in a different frame of mind each time.

If you feature your entire product assortment in a channel, certain products will always sell better. And that is because those products better align with the type of the people using the channel and the reasons they’re using it.

A few examples:

• Google PLA ads are good at selling incremental units of existing best sellers, probably at a discount. People use PLA’s to look for the best price on something they are already 90% certain they want to buy. If you invest in this channel you’re stuffing your customer file with…comparison shoppers.
• Instagram Ads are good at selling eye-catching, trendy products priced under $500. People use Instagram for aesthetic entertainment and to discover new brands. Standing out in the feed is hard, so they need to be smacked in the face with something bold, interesting or colorful. If you invest in this channel you may be stuffing your customer file with trend-driven customers with low loyalty.
• Email as a channel is good at driving volume during promotions and sales. This is largely due to how we, as the eCommerce industry, have trained the consumer. Outside of alerts (new product, restocks, sales), most brands abuse broadcast email, over-mailing generic messaging hoping to scoop up some incremental sales from high intent buyers.
• Direct Mail prospecting through data co-ops like Epsilon is good for acquiring older customers (55+), because those are the customers who “grew up” with direct mail. If you invest in this channel your customer file will be full of customers approaching retirement and, eventually, death.

You can design, produce, and launch whatever product you want. But if the price, functionality and aesthetics of that product don’t align with the customers in your Selling Systems…you won’t sell it!

If you lean on Selling Systems that others have developed for you — aka all of our most popular digital marketing channels — you are handing over the destiny of your product assortment, and your brand, to a third party. It’s like evolution: your mix of Selling Systems will “kill off” parts of the assortment that don’t align with the customers in that system.

Why do you think there are 10+ successful brands selling bright boho dresses like the one below? Because that stuff kills it on Instagram, and Instagram is where most fashion brands invest in customer acquisition.

As an eCommerce professional, how can you take action on this information? There are two things you’ll need to do at the same time:

1. Study your selling systems: what channels are currently working, and what type of merchandise is succeeding there? Take this information and communicate it to your merchandising and design teams ASAP. You cannot kill off these parts of your assortment prematurely or your business will go into free fall. It may not align with the future of your business, or where you want it to go. But you need to buy some time to…

2. Develop your own selling systems: where do you want your business to go, and what type of customers do you need to get it there. This is where things get tricky, and where management, product/design, marketing and finance/planning all need to get on the same page and get real. The first step is to run your product hypothesis through the Consumer-Based Growth Framework to get a sense of how hard, or how easy it will be to find customers for your product.

If you’re attempting to support mass-scale overhead on the back of a niche product you’re gonna have a bad time. If the size of your currently addressable market is large enough to support your financial objectives, you need to develop a plan to find them — a plan that is not dropping a dollar into the Facebook/Google slot machine and letting ‘er rip.

There is a reason that, per Web Smith of 2PM, successful brands ride waves. It is much, much easier to design into and exploit existing systems than it is to launch some iconoclastic product and develop your own systems. The latter approach requires creativity of the left and the right brain: how do we develop an amazing product AND how do we give this business enough financial runway to gain traction.

If you, or your company, is not designing into the market or designing into these ready-made Selling Systems, you need to ask yourself if you’re in the top 1% of human creativity, intelligence and perseverance. Essentially — are you the next Steve Jobs?

The sweet spot in today’s era of increasing competition and rising CAC’s is designing into the market — riding the wave — and developing your own selling systems while using Facebook and Google as short term funding. I will outline a few examples of brands that are doing this in another post.

I always welcome your thoughts and questions: greifelda [at] gmail [dot] com