After having worked with dozens of merchants over the last 10 years I’ve come to the conclusion that most of the time you can build a pretty amazing eCommerce business with a handful of the right people.
Yup, you read that correctly. Only a handful of professionals. Most of us don’t actually need a giant team to build an eCommerce business into the low-to-mid eight figures.
I’ve seen both extremes when it comes to the people side of retail. I’ve seen super lean, very effective small teams and on the opposite end, very large teams that are both effective (somewhat) and not.
Bigger isn’t Always Better
Anybody who’s ever built a large company (100+ employees) will gladly tell you that often a bigger team doesn’t necessarily mean you are getting more done. I would argue that a very well operated eCommerce company can get into the $25-50 million range with less than 5-8 core team members driving the business. Obviously this wouldn’t include warehouse or customer service, mainly because a lot of companies are choosing to outsource warehouse to third parties (3PL) and customer service teams fluctuate a lot.
So excluding customer service and warehouse, what does a badass team look like and how do you build one?
How to Build Your Badass eCommerce Team
For the purposes of this article, I’m going to limit myself to just 5-8 people in specific roles, responsible for a couple of functional areas each and that’s it. I’m not going to get super nuanced and talk about edge-case business models that have edge-case staffing requirements. This is just the approach I’d take today if I were starting to think about building a team to take a company from $1million in eCommerce sales to $10-20 million.
Let’s dig in!
Since we’re limited to just 5-8 people in this theoretical situation, we’re going to start by defining the areas of business we want our team focused on. The good news for you is that there are only two big buckets that you need to really worry about!
As you’ll see below, I’m going to assign responsibilities to each of these big buckets and then people to the responsibilities. Really I’m just building out a Process and Accountability (PAC) type chart that you’d find in Verne Harnish book Scaling Up among many other business operating system tomes of wisdom.
Please remember, this is a theoretical team building exercise for a company that’s following a common roadmap. I am not dealing with all of the edge-case (and there are many) eCommerce business models out there.
Also, the functional accountability areas listed out doesn’t mean that you need a person tactically doing that work, it just means you need someone that OWNS that area internally and can work with potential outside service providers to do the strategy & tactical part.
1 . New Customer Acquisition
What do we need to do to acquire new customers in a repeatable, scalable way?
Content Creation & Distribution
- Some call it content marketing, some call this social media; I call it the bedrock of any eCommerce business building for sustainable growth over a longer period of time.
- Highly research & data driven.
- Your balance between Quality, Speed & Consistency.
- Google Paid Products (Adwords, PLAs, Retargeting, etc).
- Facebook Paid Amplification
- KPI(s): Traffic, Budget Items, Return on Ad Spend (ROAS)
- With so many channels available for merchants to sell into and service, someone needs to own all channels.
- Inventory management is key here. Ensuring you are allocating and controlling inventory levels appropriately across all channels.
- KPI(s): Sell Through by Channel, Inventory Levels by Channel (shortages, returns, etc)
- Most often this is a very big area of responsibility and one that straddles new customer acquisition and customer retention.
- Ownership over your product catalog data, from an integrity to quality.
- KPI(s): Average Time to List New Product, Completeness of Ideal Product Profile
- Your business has funnels, lots of them.
- On-Site Path to Purchase (conversion optimization)
- Lead Generation/List Building
- KPI(s): AOV, Conversion Rate, Revenue Per Subscriber
2. Customer Retention
What do we need to do to get our existing customers to buy more?
- For new customers you want your retention team/person doing on-boarding.
- Just because a customer places an order, that isn’t the end of the opportunity.
- Email is a major tool to use for on boarding new customers and ensuring they get the right flow of information at the right time.
- Social outreach is also huge here.
- First-Order Fulfillment
- Do something special…duh?
- Every great eCommerce business should have a significant portion of their revenue derived from email marketing. Hell, every business should! But we’re just talking eCommerce here aren’t we?
- All of the low-hanging fruit should be accounted for here:
- Post-Purchase Engagement
- Cart Abandonment
- Welcome Series (overlap with customer on-boarding)
- List Growth
- List Segmentation
- List Sanitation
After Functional Areas of Accountability, Roadmap Their Focus
Once we know what our big bucket areas of accountability are, we need to create some operating rules (or a system) that governs our behaviour every month and every quarter. Below are my three main “rules” that I currently use to drive the roadmap creation and iteration process.
Note: This article is not a how-to on building roadmaps for eCommerce. This is just how you set your team up for success while building and iterating on roadmaps. For more information on why roadmaps are important for retailers and brands, read my post here.
Again, these are just what I’m currently using. I update my own beliefs quite frequently based on experiences and new learning from others and I can’t stress enough that you have to do what works for you.
Rule 1 – Rotate between Acquisition & Retention as a cohesive unit.
When you are working as a small team (less than 7-8 people), it is generally a good idea to narrow the focus of the entire team towards a common set of objectives. I usually like to do this on a quarterly basis, but some people like to change their focus monthly.
It really depends on how fast you are growing, and how much low hanging fruit you have as a business in the areas of acquisition & retention.
While we may have specific people/roles mostly dedicated to different functional areas of accountability, I like to have everyone focus most, if not all (depending on role) of their attention on one area for one cycle (cadence).
Rule 2 – Focus on 90% science, 10% art.
I also like to set some goal posts around where we allocate budget across our teams. I usually break it down as follows:
- 45% – Acquisition
- 45% – Retention
- 10% – Feelings
Feelings is the art of retail. It’s all those gut feel things that members of your team are going to want to do. You can’t not do these, as much of this stuff aligns with brand building & awareness and should be allowed to have some space (and budget).
Since I’m a science/data heavy operator, I like to set objectives that are quantifiable. Not only does this work for my style of management, it also happens to be a more predictable and trackable way to growing a business.
Rule 3 – Set “Step-Up” Objectives
Once we’ve determined our rotating focus cadence / rhythm, and we have our budget “goal posts”, next we need to actually determine what our objectives (goals) should be on a quarterly basis.
Since I’m a “predictable growth” guy, I like to create step-up objectives that take my business from one step to another instead of trying to make big multi-step jumps (high growth).
While I like predictability, I also don’t want you to confuse that with being modest or conservative. Far from it. I’m a fan of setting objectives that are just out of reach, otherwise known as stretch goals. We do this so that we can create key results (OKRs) that we strive to get 60-80% of. If we hit 100% of an objective, we weren’t ambitious enough.
I can almost hear what you’re thinking right now. You’re missing so many key people and key elements! And you’d be right. There’s some pretty normal things missing from this list that you’d likely see at any company.
Besides this being a theoretical exercise, it’s also one born of a hard truth that a lot of what was done in the past doesn’t mean that we need to do it now. This applies to people and team building as much as it does anything else.
I focused very deliberately on everything that is highly measurable. If you remember from the beginning of this post, I’m only talking about building a small, highly effective team to take an eCommerce company from $1M to 25M-50M.
I really hope this helps many of you that are going through the various stages of growth and trying to figure out the people aspect of growing an eCommerce business.