In this age of technology and online shopping , online consumers generate and leave an avalanche of data in their tracks. Whether it’s in the form of Social data – Facebook likes and comments, Twitter follows or Pinterest pins; Transactional data – product purchases and frequency or Behavioral data – on-site searches, products viewed and clicks.
eCommerce giants like Amazon have been using and optimizing Big Data for years. It’s the secret behind their highly personalized product recommendations and email promotions.
Thanks to data driven predictive analytics platforms, the good news is smaller companies can now also access the power of Big Data in their businesses. Keep in mind though, just because you can gather tons of data, it doesn’t mean you should. For most small-to-midsize businesses, trying to harness Big Data can sometimes do more harm than good. It can slow down your website and cost time and money.
To make effective data-driven decisions in your business, it’s best to identify and control the types of information you collect. Focus only on the metrics that truly affect conversion rates and ignore the ones that don’t have much of an impact.
Tracking raw ad impressions regardless of whether they yield clicks or conversions is an example of monitoring low-impact data. The same thing goes for blindly monitoring Facebook Likes or Klout scores. Stop wasting resources on metrics like these and devote your efforts on the data points that truly count.
Retention Science’s automated retention platform collects and analyzes key data metrics to predict customer behavior and deliver personalized communications that engage and convert.
Here are three of the most important key metrics for eCommerce merchants.
1. Visitor’s site behavior
Tracking the pages that users viewed, the actions they took, and their exit points can give you tremendous insights about your site and your visitors. Analyzing these metrics will tell you which aspects of your site need improvement. For example, say you discovered that while shoppers are clicking the “add to cart” button, most leave before they provide their credit card details. This could imply that there’s something wrong with your checkout page. Perhaps it’s confusing or you need a stronger guarantee. Regardless, you won’t be able to identify the problem if you don’t track what’s going on.
How you track user behavior will depend on what you want to measure. If you want to track your exit traffic, for example, you can add outbound link-tracker code to your website. For WordPress sites, this can easily be done using the Ultimate Google Analytics plugin.
If you want to track how users react to specific site elements — such as buttons, text size, forms, and other key elements — use heat maps that give you a visual representation of user behavior.Crazy Egg offers a solution for this. It enables you to see how people are behaving on each page.
Heat maps allow you to see how people are behaving on your page
2. Site visitor numbers and sources
As online marketing is rarely cheap and quick, it’s imperative to determine the best strategies to spend your resources on. Should you devote more time with bloggers who write about your products or services or should you spend money on AdWords? What about email marketing?
One way to get answers to these questions is by monitoring your visitors and where they’re coming from. There are several free and easy-to-use tools that can provide this information.
Google Analytics is an excellent tool that gives you insights on your traffic and traffic sources. To go deeper, such as which specific newsletter or which Facebook update sent visitors to your site, you can create Custom Campaigns and add special URL tags for each campaign. This lets you drill down on the specific source for your referral traffic.
You can also set up your online campaigns to make them easier to monitor. For example, having a different landing page for each guest post will allow you to quickly see which ones are sending traffic. Or, for social media, you can publish updates using a simple tool like Buffer so you can monitor clicks each from each post.
3. Dive deep into sales data
Tracking your sales is key to measuring customer lifetime value. Aside from looking at your basic sales numbers, compute your average order value and compare it with your marketing and advertising budget. Viewing how much you’re spending on each customer versus how much they’re spending on you will help create the right budget for customer acquisition and retention.
Go beyond gross sales and monitor item returns to obtain the net sales volume. Determine also the reasons behind refunds and exchanges to improve your merchandise. Also, track sales from promotional offers, to know what promos or discounts to provide in the future. If, for example, you used a loss leader to attract customers into your store, closely monitor overall sales based on that offer to see if it generated profits.
Analyzing this type of sales data, will allow you to send out tailored promotions to users. If you can combine those insights with other data — such as the time they usually buy from you or what device they use — you’ll be able to optimize your campaigns for maximum conversions.