Digital marketing and eCommerce depend on effective analysis and thorough business plans for success.
Every business can fall into the trap of poorly adopting new trends to streamline its customer outreach and generate new leads. However, with a comprehensive approach to risk management, you’ll be able to provide reliable digital marketing results no matter the market conditions.
Nothing proved the value of risk management, quite like the COVID-19 pandemic. Now, businesses are learning the importance of building risk management into transformational eCommerce trends. You can, too.
The Importance of Risk Management in eCommerce Trends
Every business venture comes with some form of risk or another. To mitigate risks that could potentially damage your revenue streams and alienate your eCommerce customers, you’ll need to be expertly aware of the many different risk types and the roles they play in eCommerce.
There are all kinds of variables that affect the potential of an eCommerce platform. Many of these variables are within your control to address and change as needed from SEO to marketing. However, many of the risk factors you’ll face will be totally outside your control. These risk factors include:
- Market conditions
- State of the economy
- Competitor strategies
- Industry regulations
Unless you have pull across governments and major corporations, you’ll be hard-pressed to create an environment better suited to your business model. But here’s where risk management comes in.
By understanding the forces that will counter your business ambitions, you can build a business model that circumvents problems to produce greater revenue. This requires planning for the worst, the inevitable, and the day-to-day challenges that will occur down the road.
The COVID-19 pandemic was the perfect example of an uncontrollable risk that devastated the economy and created unique market conditions that served some business models while forcing others to shut down. Risk management means forecasting inevitabilities like a pandemic so that your business has a continuity plan in place.
Businesses are even using risk management to streamline trends in manufacturing and sales in a digital world. For example, direct-to-consumer sales take the middlemen out of the manufacturing process, meaning fewer variables for tracking supply and demand while managing sales and delivery.
Then, there are the sensory tools and data management systems that bring real-time information to eCommerce businesses. These technologies are invaluable when protecting your assets against the inevitable, but their application in risk management takes careful consideration.
How to Apply Risk Management to eCommerce Innovation?
Managing risk for a successful eCommerce business is much easier said than done. After all, the host of factors you have to consider mean there are plenty of opportunities for mistakes. But don’t worry; surviving these mistakes is exactly what risk management is for.
You can use the following strategies to gauge and monitor your risks while implementing the tech and trends to improve. Here’s what you should know about applying risk management to eCommerce innovation:
1. Assess Different Types of Risks
First, you need to identify and understand all the risk types inherent in an eCommerce business. While you won’t have to worry too much about physical risks, you’ll need to consider employee and customer safety, financial and data security, and a host of other technological and supply concerns.
Here are just some of the many variables to consider:
- Location risks for suppliers and manufacturers
- Human risks like theft and accidents
- Technology risks like cyber attacks and power outages
- Strategic risks in business scalability
In addition to the uncontrollable factors you’ll face, these risk types can make for a complicated business environment. Assess each of these to build a plan for combatting any problems that might occur. While you might not think of everything, taking an inventory of risk factors can go a long way towards greater success.
2. Map Risk Factors to the Customer Journey
Next, assess the risks that apply to every step of the customer journey. For example, you could miss lead generation opportunities in the awareness stage because many target audiences use ad blockers. Similarly, you could lose customers in the consideration stage due to more successful competitor content marketing.
Mitigating these risks requires you to map the customer journey and create all kinds of narratives about what might go wrong. Data will help. Analyze your metrics to see where you might improve bounce rates, customer satisfaction, click-through rates, and more.
Here are the stages of a customer journey you should use to understand your data better and avoid risks:
Explore each of these in the context of the risks that can occur to better prepare your eCommerce business for the inevitable.
3. Engage employees and customers in the process.
Last but not least, no risk assessment is thorough enough without the input of all those involved in the process. This includes your employees and your customers.
Invite suggestions, feedback, and discussion to engage with all the stakeholders of your operation. There is always a chance they will have thought of something you and your risk analysis team have not. From there, you can integrate plans to address problems using the tools and tech available to you.
Maximizing Your eCommerce Success
For eCommerce success, mitigating risks is a key element in managing your customers and overall bottom line. With a thorough and properly integrated approach to risk management, you’ll catch problems from the awareness to the retention stage of the customer journey while streamlining a business plan that works in any economy.
Assess all the different risks, map your risk factors, and engage others in your efforts. By following these steps, you’ll be able to spot and repair holes in your defensive strategy. In turn, your eCommerce sales will thrive.