Abby Healy, Director of Communications, Glew.io [Guest Blog]
June 13, 2019
If you manage an ecommerce business, you know that one of the biggest challenges is accurately reporting on your performance.
Most businesses use multiple tools, from their ecommerce cart to their advertising platforms to marketing automation, point of sale, shipping, inventory and more - and each of these tools has their own (often conflicting) metrics and reporting.
Trying to make sense of all that data can take time and resources (not to mention countless Excel spreadsheets). And that’s before you start to consider which metrics you should actually focus on - or what they mean for your business.
The good news? Developing a data-driven ecommerce strategy doesn’t have to be hard. You just have to know where to start - and have the right tools at your disposal.
There are (literally) hundreds of metrics that ecommerce merchants can look at to measure performance. It’s easy to get overwhelmed - and lose track of the data that actually matters.
One easy way to break it down? There are four pillars to a data-driven ecommerce strategy - and the things you should focus on to drive growth typically fall within one of these buckets.
It’s pretty simple - you wouldn’t have a business if you didn’t have customers.That makes who you’re selling to one of the most important things to consider when it comes to developing a successful strategy.
What does that mean for you? It means that you need to have a deep understanding of who your customers are - one that goes beyond basic demographic data and focuses on their tastes and behavior as your customer. This allows you to understand your performance among unique segments of your customer base, as well as create targeted strategies to drive loyalty, sales and lifetime value.
A few things segmenting your customers allows you to do:
Understanding your product performance is the next step to developing a truly data-driven ecommerce strategy - once you have the right customers, it’s about driving them to the right products. That’s the what you’re selling.
The action item here? Use your product and inventory data, combined with your customer segments, to match customers and products in a way that maximizes your profitability.
Some questions this analysis can help you answer:
A good rule of thumb? Use your high-LTV products to attract customers, and your low-LTV products to upsell. The goal should always be to maximize your LTV per customer through a smart product strategy.
The where of ecommerce analytics? Where you’re selling to your customers - as in, the channels they use to find your store and make a purchase.
If you’re like most ecommerce businesses, you drive traffic to your site and acquire customers through a number of channels - Facebook, Instagram, paid and organic search, email, influencers and more. The real question? How valuable each of these channels are to your bottom line - and how much time and money you should continue to invest in them.
Doing a deep dive into your channel performance can help you evaluate not only how your channels are performing big-picture, but how they’re performing among different parts of your customer base (who you’re selling to) and as a platform for the different products you sell (what you’re selling to them). See how this is all coming together?
Look for data points and actionable insights like:
Use this information to drive your marketing strategy, and decide where (and how) to invest to get the biggest return.
Maybe the most important - and often overlooked - piece of the ecommerce analytics puzzle? When you’re selling to your customers - and how you can optimize that timing to drive more, and more profitable, sales.
At Glew, we calculate something called lapse point for our merchants - it’s the number of days you have to upsell a customer before they’re likely to never buy from you again, and it’s different for each store. Where customers fall in relation to your lapse point determines whether they’re active, at-risk or lost.
Understanding this timing - and making it work for you - is critical to keeping your business growing in the right direction. How can you do that? Understand what your lapse point is, know which customers fall into those active, at-risk and lost buckets at a given time, and develop rock-solid strategies for communicating with them.
Here are a few tips:
Ecommerce analytics are complex, sure - but they don’t have to be complicated. Breaking your store’s performance down into these four fundamentals - who, what, where and when - helps you see where your opportunities are - and how these key elements of your store work together to drive growth.
One thing to remember? Data points and metrics are great, but they don’t mean much if you’re not using them to guide your decision-making. Make reporting on your performance - and seeking out actionable insights - a part of your day-to-day, and you’ll see results.