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The Levers Product Managers Have to Pull in eCommerce - Introduction to eCommerce PM

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Product management 29 Jan 6 mins read Kerstin Exner

Product managers are adaptable creatures that often switch industries several times during their careers. eCommerce is one of those broad categories that are transferable to many industries. It is, therefore, a very valuable experience for a product manager.

Let’s have a look at the particular challenges and opportunities for a product manager working in eCommerce.

Different types of product managers in eCommerce

Typically a company that sells products or services online will have three different kinds of product managers.

Consumer product managers

They look after the customer-facing parts of eCommerce. These product managers are in charge of the customer journeys to find your products, evaluate and purchase them, and deal with customer service or return if required. 

Typically these product managers have a strong focus on customer experience and conversion optimization. They also work closely with marketing.

Physical product managers

They design the products or services that the company sells online. They provide all the product information for the online shopping that goes into the inventory management system. 

They will also work closely with the consumer product manager as subject matter experts o ensure that the products or services are presented well to customers.

Backend product managers

They look after all the systems that the business needs to manage their inventory, fulfillment, customer service queries, and returns.

They are usually more technical, as they deal with the connectivity of all the systems and a massive amount of data. Sometimes they will manage 100,000s of different SKUs (stock-keeping units) containing all the variants of products that the business sells.

The backend product managers provide the bridge between the physical world of products and the online shopping experience. They need to work very closely with both other types of product managers.

The systems that backend product managers manage are mostly customizable off-the-shelf products.

The role with more freedom and opportunity to drive the business in an eCommerce environment is that of the consumer product manager. This is the focus of this article. 

The eCommerce customer journey

An eCommerce consumer Product Manager needs to deeply understand the whole customer journey from getting to know about your physical products to have the product in their hands (or even returning it). It is much broader than just the online shopping experience. 

Your customers do not distinguish between online and offline and judge your brand according to their end-to-end experience. 

Even though the product manager may only be able to manage the online shopping part actively, they need to closely collaborate with the other parts of the business in charge of the rest of the journey to make sure it is seamless.

The broader ideal journey looks something like this:

  • Customer gets interested in a generic product either online or offline

  • Customer is being made aware of your products online. Q: How well does your SEO and your online advertising perform?

  • They land on your website. They may land on a product page, a page with multiple products, or even a search box. Q: How compelling is their first view of your brand?

  • They research a product in detail. Q: Does your product page show products in a way that compels visitors to buy them?

  • They put it in the basket. Q: Does the basket continuously urge customers to complete their purchase?

  • They check out the basket and pay. Q: Is this an easy process without any barriers?

  • They receive the product. Q: How do you reassure them that they can ask questions and return them if required?

  • Success! You have a happy customer that tells their friends and comes back next week to buy more. 

As you can see, a lot can and will happen for this ideal journey to be disrupted.

The levers to pull in online shopping

1. Conversion funnel

As an eCommerce product manager, your biggest lever to increase revenue is optimizing the conversion funnel from landing on your site to purchase. For this, you need data, data, and more data.

If your product is not fully tagged up with analytics, get it done now. 

You should be able to see exactly what every customer does from the point where they land on your site to post-sales behavior. Look for big drop-off points and analyze why they may happen (this is where a good UX designer comes in!). In your conversion funnel, you may have points that are underperforming versus others. 

Do customers search three times, then 50% leave without ever looking at a product? Do they put items in their basket, but 60% never go to the checkout? 40% drop off during the checkout? 

When you look at this funnel closely, you will probably identify some obvious pain points. There may be easy wins, where a small change may make a big difference.

And remember that this is a funnel, so the top has many more potential customers in it than the bottom end. 

An example: if out of the 5000 visitors who land on your site you can persuade 5% more to put an item in the basket, you have gained 250 extra people who you can persuade to buy.

If you have 500 people with items in the basket and you persuade 5% more to complete the checkout, you are only gaining 25 new customers. 

Start optimizing your funnel from the top down.

2. A/B and multi-variate testing

To optimize the conversion funnel, one of the most effective tools in your toolbox is testing different experiences against each other. A/B tests test two variants of the same page. Multi-variate tests test more than two variants at the same time. 

These tests are often associated with optimizing agile marketing campaigns, but they can be equally valuable within the product. Many testing tools allow you to create different variants of a page without any code changes.

Some simple tests may be:

  • Different presentations of search results. You will find out what compels visitors to click through to a product.

  • Different presentations of your product pages. You will find out what information persuades customers most to purchase.

  • Different ways of handling the basket to compel users to go to checkout.

  • Different presentation of form fields in checkout. 

There are myriad more opportunities to optimize your funnel through testing. 

As this is cheap and easy, you can run many tests in a short time. 

And don’t be disheartened by tests that fail to improve conversion.

If you get more than half of your tests to yield a better result than the existing pages, you have done well. 

But a failed test is also very valuable learning. It teaches you what you don’t need to try next time. 

3. Customer loyalty

When looking at a conversion funnel, it is easy to lose sight of what happens after a sale. In eCommerce, the goal is not simply to get a customer to buy a product. If the same number of customers buy a product every week but never come back for more, your business doesn’t grow. In other words, your customers churn at a high rate. 

The goal is to make your customers come back for more so that you accumulate customers and grow.

Creating customer loyalty is a long term value-generating goal

There are several things you can do to create customer loyalty. The obvious number one is to be so good in your whole proposition that your customers trust you with future purchases. This includes not just the shopping experience but the shipping and customer service experience as well. 

A lot of this journey is outside the control of a product manager. But there are also things a Product Manager can do to create customer loyalty:

  • Getting the customer to create an account with you after they have purchased a product. This ensures that you know who they are when they return, and you can give them a more personalized experience. It also allows you to ask consent to market to them.

  • Up-selling and cross-selling relevant products after they have purchased a product. 

  • A loyalty scheme to get discounts on further purchases

  • Even better, let your customers find other customers through a refer-a-friend scheme.

  • Create a My Account section where they can see their orders and customer service interactions. This reassures customers that they are well looked after. Besides, this provides valuable marketing space as well. 

And note this: you can do this because you control your own shopping experience. You control none of this when selling through a platform (e.g., Amazon or eBay).

So use your opportunities and test, test, test what works for your customers.

4. A whole lot more.

Consumer product management in eCommerce touches on a variety of aspects that are valuable in many online businesses. As a consumer product manager, you have a great number of levers to pull to optimize your shopping experience. 

The key building blocks of success are

  • A deep understanding of the end-to-end customer journey, not just the online shopping part. 

  • Deep knowledge and understanding of your customer data.

  • Testing and learning continuously what works for your customers.

In a fast-paced eCommerce environment, airfocus can help you plan and schedule your tests and implement your learnings easily. In addition, with the full transparency and visibility of airfocus, all your business stakeholders can be on top of your schedule at any time.

Start optimizing now!

Read also

Product strategy 4 Aug

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