The Three Pillars of Profit for eCommerce Part 1
The Three Pillars of eCommerce
The Three Pillars are life-changing to your eCommerce store if you understand and implement them properly. They really can be the difference between success and failure in eCommerce.
I spent a lot of time and a ton of money to figure out The Three Pillars. He spent hundreds of thousands of dollars on agencies, courses, masterminds, and experts only to discover nobody had ALL the answers – until now!
Aside from your offer/products, The Three Pillars ARE your success. Few people understand all Three Pillars or how they complement each other – and what happens when you have all three working correctly.
You may find people that are good with one or two Pillars, but most eCommerce stores don’t have all Three Pillars working in unison. We’ve seen a lot of stores and have yet to find one that had all three set up correctly before working with me.
That’s a powerful statement because, with the information in my book The Perfect Shopify Store, you can learn how to make your store perform better than everyone you’re competing against.
If you understand all Three Pillars, implement all three, and continually improve all three, it gives you an advantage in the marketplace. Especially over your competitors because very few people – brand owners, eCommerce marketers, or agencies – understand these three things and know how they complement each other.
The Three Pillars of Profit, when done correctly, will generate 70 to 80% of your total store revenue. Let that sink in a minute because that’s a huge number.
Most people think there is some secret to whether they have success or not. Some will say that all they need is a great quality traffic source or a great Facebook ads person. Some think that their competitors succeed because they have better influencers.
People also think that just because they have the best widget or supplement on the market, their products will automatically sell when the store is open. Nothing can be farther than the truth.
People STILL must know what your product is, why they need it, and where to buy it. The REAL SECRET is that you’re almost destined to succeed if you master The Three Pillars.
There are no guarantees. You MUST have a great offer and product. Then you implement The Three Pillars. If done correctly, it always works. It works across multiple store platforms and different markets.
Yet, if they’re done incorrectly, you could struggle or even fail. You’ll see from some numbers and stats we’ll share these Three Pillars can make or break your business. We’re not into marketing hype. No Lamborghinis and all that – none of that’s appealing to us.
We all hear about these “secrets” that no one shares. In this case it is TRUE. There is a secret. The secret is called “The Three Pillars of Profit!”
So what are these Three Pillars?
1. Cart Abandonment Recovery
You’re probably well aware of abandoned carts if you own an eCommerce store. People go to your store, put products in their cart, and then they leave without making a purchase – and they never come back.
People do this on ALL eCommerce stores. We’ll share how much of an impact this can have on your business. Abandoned cart recovery can double your revenue and increase profit even more, especially if you’re not doing it now or not doing it correctly.
2. Average Order Value (AOV)
Average Order Value or AOV is the amount of your average sale. Divide your total revenue by the number of sales transactions over a measured period, typically monthly, quarterly, or annually. Example: $1,000 in monthly revenue divided by 100 sales equals $10 AOV.
AOV is the life blood of all eCommerce stores. Increasing the average value of each order could be the most important thing you can focus on. We love focusing on AOV because if we can get AOV up, it changes our ability to acquire customers.
3. Customer Lifetime Value (LTV)
What’s the value of a customer in total sales over their lifetime? That’s what LTV is. If you can keep customers longer and sell to them on multiple occasions, you can radically improve your total sales.
Example: A customer buys from you three times over one year, spending $50 each time for a total of $150. This customer’s LTV to you is $150. On Shopify, you can look at “Returning customer rate” under Analytics – Dashboard.
This gives you a percentage of repeat buyers, not a dollar value of LTV. Both are valuable to know.
These Three Pillars are the foundation to build a great eCommerce store on. Individually they’re good, but when combined and optimized, they are unstoppable.
I have seen stores on the brink of closing before they started using The Three Pillars. They turned their entire business around after focusing more on these three things.
In the next few posts, I will show you some phenomenal real-world results…
I will show you examples of how my team implemented The Three Pillars on stores and how it’s changed the businesses. How businesses have been able to scale, how they’ve been able to make money, and how they’ve become highly profitable.
Be on the lookout for the next part in this series.
Brent Baubach
CMO and Co-Founder – PURE Private Label LLC
CEO and Co-Founder – Ecom Institute LLC
For more information on creating your own supplement brand go to www.PUREPrivateLabel.com For more information about creating a successful Shopify store go to www.ecominstitute.com