5 Signs Your Ecommerce Business Needs a Turnaround Strategy
Many ecommerce business owners experience periods of stagnation. While some minor slowdowns are normal, prolonged stagnation or decline can be a warning sign. The worst thing you can do is ignore the problem and hope it fixes itself - it rarely does. The key is recognising the warning signs early on and taking decisive action to get out of the slump.
Gary Baker
Your sales are flat, your ad costs are rising, and nothing you try seems to make a difference. Sound familiar?
Many ecommerce business owners experience periods of stagnation. While some minor slowdowns are normal, prolonged stagnation or decline can be a warning sign. The worst thing you can do is ignore the problem and hope it fixes itself - it rarely does. The key is recognising the warning signs early on and taking decisive action to get out of the slump.
So, if you’re seeing any of the following five signs, your business may need a turnaround strategy before things get worse.
1. Your Revenue is Flat (or Declining) Despite Increased Marketing
The Problem:
If your sales have hit a plateau, or worse, are steadily declining, it’s a clear indication that your current approach isn’t working. You know this is the case because you’re increasing marketing, adding new products, and perhaps even increasing your ad spend, yet your sales figures stay the same.
Why This Could Be Happening:
Your market has more competitors.
Your value proposition isn’t strong enough to differentiate your brand.
You’re too reliant on new customer acquisition without focusing on retention.
You have pricing or positioning issues affecting conversions.
What to Do About It:
Conduct a full business audit to understand what’s working and what’s not.
Re-evaluate your brand messaging and positioning to stand out.
Focus on repeat customers by improving customer experience and retention strategies.
Test different pricing models and offers to increase conversion rates.
2. Your Customer Acquisition Costs (CAC) Keep Rising
The Problem:
Your advertising costs are increasing, but the number of conversions isn’t keeping up. This means you’re paying more to acquire each customer, reducing profitability and making it harder to scale.
Why This Happens:
Increased competition in ad bidding driving costs up.
Poor targeting, creative fatigue, or weak messaging in ads.
Low conversion rates on your website due to poor UX or lack of trust signals.
Too much focus on paid acquisition without a strong organic or referral strategy.
What to Do About It:
Optimise your website for conversions: improve site speed, enhance product descriptions, and build trust with social proof.
Refresh your ad creatives regularly and test different angles.
Experiment with different marketing channels beyond Facebook and Google, such as TikTok, YouTube, or influencer marketing.
Implement referral and organic marketing strategies to reduce dependency on paid ads.
3. Your Profit Margins Are Shrinking
The Problem:
Even if your revenue is growing, your profit margins are declining. You may be selling more but making less money, which makes scaling unsustainable.
Why This Happens:
Increased costs for products, fulfilment, or advertising.
Heavy reliance on discounts and promotions to drive sales.
Poor inventory management leading to unnecessary costs.
Inefficiencies in operations that eat into profits.
What to Do About It:
Identify cost inefficiencies in operations and fulfilment.
Focus on increasing average order value (AOV) through bundling or upselling.
Reduce discounting and shift towards value-driven marketing.
Negotiate better rates with suppliers or explore alternative sourcing options.
4. Your Customer Retention Rate is Low
The Problem:
You’re constantly chasing new customers, but few of them return for a second purchase. A high customer churn rate means you’re not building a sustainable brand, and the cost of acquisition remains high.
Why This Happens:
Poor post-purchase experience, leading to dissatisfaction.
Lack of email/SMS marketing to nurture existing customers.
Weak branding that doesn’t create loyalty or trust.
No loyalty or rewards programme to incentivise repeat purchases.
Lack of “follow-up” products that customers might need.
What to Do About It:
Improve the unboxing and post-purchase experience.
Set up automated email and SMS sequences to engage customers.
Create a loyalty programme or referral incentives.
Improve branding and storytelling to build stronger emotional connections.
Create additional products that will entice customers to come back.
5. You Feel Overwhelmed and Lack a Clear Growth Plan
The Problem:
You’re working hard but feel like you’re spinning your wheels. You’re trying different strategies, but nothing seems to be delivering the results you need.
Why This Happens:
You’re relying on tactics without an overarching strategy.
Your business has outgrown its current operational structure.
You’re stuck working in the business instead of on it.
What to Do About It:
Take some time out away from work to assess your business.
Develop a structured growth and recovery plan with clear KPIs.
Automate and delegate tasks so you can focus on strategic growth.
Set clear quarterly and annual goals to measure progress.
What now?
If you recognise any of these five signs in your ecommerce business, it’s time to take action before things get worse. The good news? A turnaround is possible with the right strategy and support.
Rather than guessing what to do next, why not get a free personalised assessment? Just answer 20 questions and uncover the gaps in your ecommerce business you can tackle right now.