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Niche E-Commerce to $5M: Dan Dillon, CEO of (Part 3)

Posted on Saturday, Mar 2nd 2013

Sramana: How much volume were you able to generate with search engine optimization as your primary customer acquisition strategy?

Dan Dillon: From October 2006 through the end of the year, we did a whopping $30,000 of business. In 2007 we did $300,000 of business. In 2008 we did $600,000 of business, and in 2009 we did $1.2 million of business. In 2010 we did $2.2 million of business and in 2011 we did $3 million of business. Last year we did $5.4 million of business.

Sramana: Between 2007 and 2011, did organic search remains your primary customer acquisition strategy?

Dan Dillion: That accounted for the majority of our business. We did try an affiliate marketing program and failed miserably at it. It came close to killing our business.

Sramana: In 2011 you started doing PPC. What are the keywords and their competitiveness in your domain? How competitive is it?

Dan Dillion: A general rule is that the broader a term is, the more expensive it is. If you are able to afford those broad terms then they will help you create branding. Branding is a huge part of the business. I never considered my company as a brand until I started diving into analytics. I realized that people were searching for our brand. They trust us and come to us specifically.

Sramana: How long did it take you to get to the point where people were searching for your brand name?

Dan Dillon: A light bulb went off for me in early 2011. I could not digest why we were growing, meaning that I could not pinpoint one particular thing that was driving our growth. Customer service and answering the phone live every time was always our focus. We did not realize the brand was as strong as it was until 2011.

Sramana: By 2011 you were doing a large volume of transactions. How likely is it that word of mouth was driving some of the brand-oriented searches that you observed?

Dan Dillon: I think that is very likely. When facility managers asked others where they sourced data, they would point to us. When the economic crisis happened, we really focused on pricing. We did engage in a price war to retain our clients. I can tell you that I can attribute a lot of that growth to search engine optimization and customer service.

Sramana: Can you talk about the segmentation of your business?

Dan Dillion: The first major breakdown is from a residential or commercial perspective. We find that 51% of our clients have a residential address; the other 49% is shipped to a commercial address. However, 85% of our revenue comes from that 49%. The commercial buyer purchases more than a home owner.

Sramana: What is the average order value of a commercial buyer as opposed to a residential buyer?

Dan Dillion: The residential buyer average is around $45. A commercial buyer will average around $400.

Sramana: How often do they buy?

Dan Dillion: Commercial buyers come back about 1.2 times per month on average. A residential buyer is very sporadic. We will get an order there once every four months at best.

This segment is part 3 in the series : Niche E-Commerce to $5M: Dan Dillon, CEO of
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