Brand vs. Growth: Why E-Commerce Companies Need to Balance Both
Direct-to-consumer companies have been obsessed with growth for years. The industry relies on conversion techniques and A/B tests to continuously attract new customers to buy, at a steadily increasing average order value. But as e-commerce gets more competitive, hacking growth this way is no longer enough.
Customer acquisition is becoming too expensive to only optimize for one-off purchases. The companies that rise to the top in the near future will need to invest in brand as well as growth, focusing on building a memorable shopping experience that keeps customers coming back again and again.
Pairing brand with growth is the ultimate formula for e-commerce success — and ignoring one for the other so often leads to failure. Let’s explore why.
The Cost of Over-Optimizing for Growth
When does growth hacking go too far? Sometimes optimizing for growth means accepting immediate gains that lead to long-term challenges that are hard to undo. There’s a significant cost to blindly pursuing growth without consideration for the customer experience.
I run an e-commerce design and development agency. Several years ago, one of our clients set a goal to significantly improve their average order value to justify a high customer acquisition cost (CAC). As a growth tactic, the company launched a build-a-box experience: Customers could buy a 12-pack box, 18-pack box or 24-pack box of bone broth. On top of that, they offered a subscription model of 30 or 60 days.
As the agency behind their tech stack, we leveraged every pricing discount at our disposal and used gamification techniques on the user experience (basket displays, animations, dynamic calculations) to convince customers that the 24-box option was the optimal choice every 30 days.
At first this appeared to be a success for our client. The 24-box option significantly lowered CACs and was seen as a clear win for the growth side of the business. But then a few other numbers began to surface. Customer churn rate tripled. Support tickets went up by four times. The number of negative reviews doubled.
What happened? Customers had received more product than they needed ... and just got another shipment of 24 boxes.
To rub salt on the wound, the product weighed more than a few pounds, which made for expensive returns. What the brand failed to recognize was that the growth team’s mathematical calculations for growth ignored the most important factor: the customer’s needs. No customer needed 24 boxes of bone broth every 30 days.
When you focus exclusively on growth, you double down on the numbers that make the business thrive — irrespective of the customer. The solution, however, isn’t to avoid growth hacks altogether. Over-optimizing for brand can be equally problematic.
Impressing Customers With a Memorable Brand Is Not the Same as Meeting Their Need
Some e-commerce companies have no problem avoiding the pitfalls of over-optimizing for growth. These companies are more focused on having a lasting impression on their customers. The problem is, they often go to the opposite extreme: hurting the user experience for the sake of novelty.
A New York-based wellness brand hired us to help with their launch. Their goal was in some ways the opposite of growth. They wanted to communicate a story — to wow the visitor through design.
What this meant in practice was totally reimagining the e-commerce journey, including how we built common pages like product detail pages, product listing pages, and the cart checkout. This included changing the architecture of the layout, leveraging media in unconventional ways, and adding a whole host of animations and micro interactions.
The launch took about nine months from start to finish. From launch, it was clear that we accomplished the goal of creating an entirely unique and visually remarkable digital experience. The website was indeed stunning.
But over-optimizing for brand — like over-optimizing for growth — resulted in unexpected problems. The brand launched four months too late to capitalize on January sales (the biggest health-related shopping month of the year) and conversion rates stayed below 1.5 percent through the launch and post-launch cycle.
What’s more, the big imagery and scripts slowed down the website. And through qualitative surveys and interviews, we learned that the site was also not easy to navigate — which made shopping difficult.
What happened? The company’s grand creative vision trumped their need to design a seamless shopping experience. The primary goal was to be unique, even if that came at the cost of the user experience. The slower-than-normal load times exacerbated the challenge of navigating a more “creative” site. In other words, dialing the artistry and uniqueness of their website up to 10 was detrimental to other business goals.
Brand is all about building a memorable buying experience. But like optimizing for growth, it’s easy to over-invest in brand and ignore the elements that create a user-friendly shopping experience. The key is to find a middle ground that matches your short- and long-term company goals.
Strike a Balance Between Brand and Growth
Growth and brand are two ends of one spectrum. Most companies do not fall perfectly in the middle. Some lean toward efficiency, enticing customers with endless upsells and a simplified shopping experience with a gamified cart to eke the most out of every purchase. Other brands are more memorable, providing beautiful shopping experiences that are seldom in your face with sales tactics.
The goal of most brands should be to edge closer to the middle. That means making your site unique, while remaining true to the constraints of e-commerce standards.
Leverage provocative messaging and tell your story through a structure that flows in a way that consumers are used to. Develop high-end media to strengthen the story, but then use dynamic formatting to make sure things look good and are easy to navigate, no matter the device a customer is using.
Capture email addresses, but only in a way that adds value to the consumer. Increase cart size through actual complementary products or by focusing on lifetime value via future purchases. For example, emphasize subscriptions options for returning customers who have tried the product and know they want it, as opposed to nudging new customers to sign up for recurring products they don’t know if they enjoy yet.
Many of these recommendations can sound obvious. But e-commerce companies ignore them every day. Next time you make changes to your website, ask these questions to ensure you’re walking the fine line between brand and growth:
- Do our customers want this? (Or: Does this help them achieve their goal?)
- Do customers understand the product when I present it to them?
- Are we making the shopping experience easier for our customer?
- Will my customers remember the brand because of this?
Find your ideal middle ground: Build a memorable e-commerce brand that also consistently gets the most out of every sale.