Several myths surround e-commerce websites that make running successful sites harder. Today we’re beginning a series of posts every few weeks that will look to identify and dispel some of these e-commerce myths that we frequently come across. These misconceptions cross the boundaries of e-commerce platforms, products sold, and countries the businesses are operated in and proliferate across the Internet as a whole.
Let’s get to it.
Myth 1: Your business isn’t working, and it’s not worth finding a solution
Sometimes it can be hard to break from the cycle of throwing good money after bad. We recently worked with a client who just three months prior had migrated their website from Wix to a competing platform and to say it wasn’t going smoothly would be an understatement. When they approached us initially, they were looking for support on the platform that they had just migrated to, but it quickly became apparent to us at least, that the platform was causing more pain than it was worth to the business. We first discussed it with our contact; however, they let us know in no uncertain terms that suggesting migrating to Shopify would bring an immediate end to our business relationship. Though we felt strongly that continuing to sink money into their current platform was a less than optimal approach, we respected and understood the feedback our contact provided.
Less than a month later, the client contacted us to discuss transitioning to Shopify as the impact of their current platform had become so detrimental as to be unbearable. This was made all the harder by the fact that they had seen numerous red flags during their migration, but in their mind, they were already so invested in it that they had to continue in the hope that if they just kept throwing money at it eventually it would be the right solution for them. Four months later, it was apparent that this was not the case.
The above is, sadly, a real example of a sunk cost fallacy decision. Mostly, the client had decided that the money already sunk into the project that could not be recovered outweighed the costs of switching direction. The reality, however, is that sunk costs are no longer relevant to decisions about the future, and when the decision is being made about the best approach moving forward, they should not factor into the overall rationale applied.
To get another example, let’s take it outside of the realm of e-commerce and instead look at a scenario that most people are faced with. Say, for example, you own a car that has recently taken to breaking down. In the past six months, you’ve replaced the tires and brakes for a total cost of $4000; and now your transmission is gone. It’s an easy mistake to make to factor in the fact that you’ve already invested $4000, and this can tip the balance and make it appear as though sinking another $2500 into for a transmission makes more sense than buying a new car. This, however, isn’t the case. It’s essential to look at the picture as a whole, factoring out the sunk costs. When you avoid researching alternatives as a result of sunk costs, you run the risk of overlooking the fact that if you spend $25,000 on a new car which would ensure that you can consistently make it to work, and because of the included warranty, a lower total cost of ownership. These factors clearly put buying a new vehicle clearly in the lead.
Human beings as a whole are terrible at letting go of sunk costs when making decisions. Ultimately it comes down to ego; we want to feel as though we are good decision-makers and not wasteful, so it’s hard to look past the previous expenses. We assign the value of something as the price paid, which is seldom true but is a simple heuristic, we’ve learned and continue to follow subconsciously.
When you’re looking to make a complex business decision easily, the following two questions provided by Farnham Street can help to limit the chance of falling victim to the sunk cost fallacy.
- Are the people making the recommendations overly attached to past decisions?
- If you were brand-new to the role, what would you consider?
Circling back to e-commerce, one of the most common scenarios we see is a business that has recently migrated to a new platform or application and find themselves hoping that the issues they’re experiencing will resolve themselves in the future. In the end, it doesn’t matter how much you’ve spent, what’s important is the cost moving forward if you do not have the right systems in place to grow your business.
Myth 2: Your passion for your Product is What’s Most Important
As in the case of most myths with staying power, this one is half true. While it’s true that if you opened Leather Belts and Handbags Inc. because belts and handbags represent two of your favorite things in the world, you’d benefit from that in-depth understanding when the time comes to write compelling copy about them, this can also hold you back. There are times where being exceptionally passionate about something can lead to communication gaps because you assume that because you know or believe something, your audience does as well. This is something that even the team at Shop Style Design is guilty of at times. A real-world example of this can also be seen when someone is recounting a negative experience. The feelings and memories surrounding the experience they’re describing often causes them to leave out critical information that helps the people they’re sharing the story with to understand why they should care.
We’re not suggesting that you avoid selling products you’re passionate about, or even that you should minimize its role, but it’s important not to lose sight of the other elements needed for business and connecting with your audience. The passion of connecting with your audience is critical. Never assume that your market research is complete simply because in your mind you are the target audience. The reality is that your target audience isn’t you. If you fail to understand the unique needs that drive the decisions about your product line in the minds of your audience, it could result in missing sales opportunities. Remember that just because you would’ve decided on your products, doesn’t mean your potential customers would’ve made the same choice.
Wrapping Up
These are the first to myths that we will be tackling in the series, but they’re two of the most impactful misconceptions that exist in e-commerce today. Sometimes, it’s essential to take a step back and examine your business and approach with an unbiased eye. The reality, though, is that not everyone can remove their personal bias from the facts of business and so working with a team of professionals such as those at Shop Style Design can help to ensure you have a pragmatic understanding of your business and where to go next.
