Erik is a Partner at Antler as well as a Swedish entrepreneur working and living in Vietnam.
He's cofounded several ventures, worked as CEO, Country Manager and/or Managing Director in a few others.
Guest Author: Erik Jonsson
A guy from Goldman Sachs once flipped one of my key metrics upside down, and it was the best thing that could’ve happened to first-time CEO Erik.
This was back in 2012 when I was running an e-commerce venture (e-commerce was still somewhat of a burgeoning concept back then).
One of the first investors to look at what we were doing was Goldman Sachs Asset Management. The representative visiting us was an experienced e-commerce operator and investor, and I was a first-time noob.
As with any online retail business, one of the key metrics we were tracking then was our return rates, i.e. the percentage of items ordered that were returned to us.
During our meeting, we talked about our GMV, revenues, profit contribution, conversion rates etc before he suddenly said: “Erik, tell me about your return rates.”
I was thrilled.
We had just hit single-digits in our return rates last month (9%) and were on-track for 8%, which were fantastic numbers – both in a Vietnam context as well as the industry in general.
Or so I thought.
His response was lukewarm because instead of being impressed, he simply said: “Hmm, ok. Well done on those low rates, but maybe they should be a bit higher.”
Because for him, the low numbers suggested that people were perhaps finding it hard to use our return process in the first place, which potentially meant that it was limiting our sales.
A possibility that up until that point had never crossed my mind.
So we got to work analysing the data and as it turns out, he was right. New and existing customers were hesitant about our return policy and processes and as such, some didn’t even try to buy anything from us.
Once we improved how we managed returns, we saw an immediate uptick in the influx of new customers, recurring orders and overall customer satisfaction.
So to the founders out there – question the key assumptions that you have about your metrics.
They might be a symptom of an underlying problem that you need to resolve.
So go have a think.
And in the meanwhile, if you anyone is interested in building a startup in Vietnam, don’t forget to check out our 10-week Antler program: https://lnkd.in/dWH2XKJN
We’re accepting applications for our upcoming April 2024 cohort.
