The 80:20 Rule

Hello fellow Etsian Artists!  This is my second post as a guest blog writer for our EAWT blog. In this one we will be getting down to business, pun intended.

I recently started attending a six class business course at my local RCEDA (Ravalli County Education and Development Authority) who holds continuing education classes for The University of Montana.  The first class I had was Business Basics.  It was pretty much an overview of all the topics that they will discuss in further detail in the following classes.  First we discussed creating a Business Plan.  Some of you may have already created yours in order to apply for a loan or such.  Many of us, however, have not even wanted to think about doing that yet...it can wait 'til later, right?  Yes, and no.  While you may not be applying for a loan at the moment, writing a business plan will provide better incite for where your business is going and what you will need to get there.

The next topic presented was developing a Marketing Plan and deciding on your marketing goals.  As with most goals, they should be specific and reachable!  Don't set yourself up for "failure" when you decide on a goal that is broad and unattainable.  For Ex:  Say you are a brand new Etsy shop.  You decide on a goal to reach 5,000 sales in your first year.  That is not realistic.  If you do, however reach 5,000 sales in your first year kudos to you, but the majority of sellers will not attain that many sales in their first year or come close!  Also, make sure that your marketing goals are included in your financial projections and operations plan.

We have a distinct advantage of being Etsy sellers.  Etsy is a wonderful community with a vast amount of people living all around the world!  However, they can all be found in one convenient place, etsy.com.  Evaluating your competition is important, and isn't it nice how easy Etsy makes it for us!  Some people sell a wide array of items while others stick to one or two types.   If you are a vintage shop that sells everything from books, to toys, to records, home decor, etc you will want to peruse other shops with the same character.  Same thing if you are a shop that sells one or two specific categories of goods.  Viewing shops with similar items and vibe will give you a better idea of where your shop stands, if your prices are too high or too low, and see things that you or they are doing right and wrong.  Learning your competitions' strengths and weaknesses is never a bad thing.

One fun business fact that really stuck with me from my class is that 80% of your business will come from 20% of your customers.  Simply put, repeat customers are king!  Word of mouth (or keyboard as explained in my last guest post) is one of the biggest ways you will draw in customers.  We have a wonderful little feature on Etsy known as Feedback.  This is where buyers and sellers can leave positive, negative, or neutral feedback for a seller or buyer depending on their specific experience with that person.  This can be a great way for potential customers to see what previous satisfied customers have to say about your products and customer service.  Negative feedback can hurt your business dramatically.  For all those impulse buyers out there (and believe me I'm guilty of it, too) they may never even see those one or two negative feedbacks prior to purchasing.  However, most people who shop online nowadays really shop around, read reviews, and browse as many other options as possible to make the best buy.  Providing fast shipping, thank you coupon codes for buying, or a free gift are some great ways to make buyers happy and compel them to want to buy again and leave you glowing feedback.

Recently, we had a customer purchase a necklace for her friends' birthday.  We decided that we would include a similar style set of earrings as a gift from us to her friend, a birthday card, and we laser engraved "Happy Birthday, _____" onto her jewelry boxes.  Her friend who made the purchase contacted me the other day saying thanks for everything and how she wanted to leave us positive feedback on Etsy but didn't know how.  That was the first time that it had occurred to me that some people on Etsy do not know how to leave feedback or even know that feature exists!  I walked her through it and she left us some wonderful words of praise and said she couldn't wait to buy again.  Now, you don't always have to give away free stuff (and please don't if it's not at all profitable for you), but I'm sure you'll be more prone to repeat customers and customer recommendations if you go the extra mile in some way.  The extra half-mile or quarter-mile could work, too!

I have my next class this Thursday where we will be delving into Marketing.  You know that thing that we have to constantly be doing in order to succeed ;)  I'm sure I'll have some new useful information afterwords.  Until then, thanks for reading and feel free to leave us comments below.