How Data Can Drive Revenue and Growth Strategy

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tracking data small businessBig data is more important than ever, and it’s only going to get more important to online retailers of all sizes. Luckily, it’s also more accessible than ever. Small- and medium-sized online retailers, and even solopreneurs and early-stage startups, can access free and low-cost tools that can power big returns in sales conversions, expanded their customer base, and increase business growth.

However, it’s not just about the data.

“Looking at data is great, but the whole purpose is to come out of it with some sort of actionable item,” says John Procopio, director of marketing and ecommerce here at Palo Alto Software, maker of LivePlan business planning software. “Find lightweight ways to know what your data is doing, so you can then do promotions or make changes, measure the effect, and test whether the things you are implementing are driving the changes you want to see.”

Data points require interpretation to be useful

Raw data is essential, but it doesn’t always provide clear action points, says Jordan Harling, Chief Digital Strategist at Roman Blinds Direct. “Analytics are an essential guide to improving people’s digital experience,” he explains. “They provide the data you need to fully understand how your users actually use your site, allowing you to optimize and tailor it to their needs.”

The U.K.-based manufacturer of custom blinds uses their website to guide customers through hundreds of options to find the right product and configuration for their home or office.

Examining their own website analytics has underscored that teasing out plans and strategy from data takes expertise, interpretation, and nuance. “You need statistical knowledge, human empathy, and a logical mind to convert the cold data your site provides into improvements that benefit your users’ digital experience,” says Harling. “But, like any tool, if you don’t have the skill to use it, you could end up hurting yourself.”

Reviewing site analytics, for example, might reveal that a page on your site has a high bounce rate, or a high percentage of people who navigate away from your site after viewing just a single page. That could be cause for alarm, but it might also indicate content that’s doing its job effectively. If people have been finding the page through online searches to answer a question or fulfill another purpose, says Harling, “your page is serving a valuable purpose, which Google rewards in its rankings and increasing your brand presence.”

As a free, easy-to-implement, easy-to-comprehend baseline for any site, Procopio and Harling both recommend Google Analytics. The free service can be plugged into virtually any website. While data wonks can dig as deeply into its metrics as they want, Google Analytics was also designed to be useful—and user-friendly—for relative beginners. (Google also offers video-based and text-based free Analytics Academy Courses for anyone wanting some introductory training. Google Analytics for Beginners and Ecommerce Analytics: From Data to Decisions are good starting points.)

“You can quickly work out the overall efficacy of your site: bounce rates, returning users, and overall page views,” says Harling. “Then you can set up conversion funnels, see how your users are entering your site, and where they are leaving it.”

Once you can see what actions customers are taking on your site, though, how do you make changes that can increase conversions?

Test, measure, change, profit

Effectively using data is all about testing changes, such as what drives more customers to complete a purchase or other desired action. Luckily nowadays, testing small changes to your site is simpler than ABC—it’s as easy as A/B.

A/B testing, or split testing, helps you “understand what type of experience is resonating for your users,” says Procopio. “To do that, you need to pit two options against each other and give it enough time for the data to sort it out.”

To do this, you make one change to your site and test the changed version against the current version. Along with monitoring results from Google Analytics, split testing services such as Google Optimize and Optimizely streamline the process to set up the changes, make recommendations on how to set up the test and how long to run it, deliver each version to random customers, and help you evaluate the results.

Here are some areas where Procopio recommends ecommerce retailers run split tests:

  • Homepage content and layout.
  • Pages that are low in the conversion funnel, closer to checkout—then work your way up (Procopio calls this “funnel analysis”).
  • Pages where people drop off the site (such as pages with high bounce rates or exit rates). Common culprits here include the homepage, category pages, and any call-to-action page, such as an email signup page, account registration page, and any segment of the checkout process.
  • Search results—are your results optimal from a product-listing standpoint? There is gold in your search, so make sure your product keywords and attribute tags are steering customers to the right results.
  • Customer service pages, where you can test tactics like adding live chat to see if it affects conversion.

Once you know where to test, here are some suggestions on what to test:

  • Compare different colors and graphics, such as in-site navigation areas and call-to-action assets.
  • Test different categories or featured products on the homepage.
  • Compare conversion for multi-page checkout versus single-page checkout.
  • What happens if you allow guest checkout versus requiring registration?
  • Test timing and messaging on email signup or live chat engagements (such as popups, popovers, and overlays).
  • For email signup offers, compare exclusive promotions, free content, or other incentives to see which drives more subscriptions and subscriber engagement.
  • Optimize the text on a conversion button (which of these converts better: “Complete Order,” “Sign Up,” or “Get Your Free Copy Today”?).
  • Test different promotion techniques: Does free shipping over a certain amount move the needle more for net revenue and profit, or does more across-the-board discounting?
  • Test email subject lines, send times, and more dialed-in list segments versus more broad.

What you think customers do and what they actually do can be quite different, says Harling. “A lot of times your changes won’t affect things in the way you thought they might. People are complicated and predicting them isn’t easy, which is why A/B testing is so important.”

Examining analytics and testing changes has produced big results for Roman Blinds Direct. After studying the site’s data, Harling realized that few customers were using the site’s search to help them find and refine what they were looking for. Instead of returning product results based on tagged attributes, the search was returning results based solely on whether or not a keyword was in the product title or description.

They tested changes to the search engine were then implemented the better performing improvements. “We saw immediate results,” says Harling. “A greater percentage of people started using the search bar, people found what they were looking for quicker, and the number of conversions increased.”

Look beyond last month

Making decisions based on data requires far more than simply comparing the current month to the previous month, says Procopio. “Look at how you were performing this time last year. Retailers have to account for the seasonality with their products and sales.”

Different businesses need to look at different factors or data points as they relate to your target market and business goals, but here are some to consider:

  • Demographics and psychographics: When factors such as age, income, spending habits, sex/gender, beliefs, interests, or employment define your target market, is your site meeting their needs and expectations? Are you directing advertising and marketing resources to the right channels and campaigns?
  • Product and service categories: Which products or services are driving your overall business? Is that on target with your strategy and where you’ve invested in inventory or sales support?
  • Average order value (AOV): If your AOV, or the amount your customer spends per transaction, is $80 but you want to raise that to $100, then you can get more out of current customers and focus less on acquiring new customers. What upsells, cross-sells, packages, tweaks to shipping costs, and so on might increase AOV?
  • Traffic sources: What percentage of your site’s traffic comes through organic search, paid search, affiliates, social media, or your email list? What pages are the entry points? What do users do once they arrive? Are the sources driving relevant traffic? What traffic sources lead to the best or least conversion? How can you use A/B tests to optimize specific pages?
  • Lifetime customer value: What is a customer’s long-term value to the company? What annual spend are you targeting? Are those numbers going up or down? How are you influencing them with promotions, services, or add-on sales?
  • Seasonality: What times of year (such as the holidays) drive higher conversions, and which times tend to be slower? How did you perform during those timeframes last year, and what can you try or test that can increase performance this year?
  • Gross revenue and net profitability: Year-over-year, is top-line revenue up? Does the business have good customers who are meeting target customer value? Is the business more profitable?

Data from social media (from Facebook Insights), your website (from Google Analytics), and your email provider (such as email opens and engagement from MailChimp or Constant Contact) can all be part of figuring out the key performance indicators (KPIs) that can influence your business decisions and sales strategy.

But there’s one data source you need more than any other.

The ultimate data source

When it comes to acquiring meaningful, actionable data, all the tech in the world does not beat one essential, ultimate data source:

Your customers.

Talking with and listening to your customers is key to knowing how your products and services are being received by the market, and in figuring out how you can better talk to current and prospective customers.

“As marketers, we think we know how to design our products because we designed the product, and we worked with people on the product,” explains Procopio. “But customers are smarter than marketers, because customers are actually using the product. Marketers perceive product value, but customers know it.”

Customer engagement and feedback can take many forms, says Procopio, and it’s easier (and cheaper) than you might think. Asking for feedback in an email can provide it. So can setting up a quick online survey through Qualaroo or SurveyMonkey—resources accessible to ecommerce retailers of any size.

The best way, though?

On-site reviews.

“Product reviews on a product page provide a platform for the language the customer speaks,” says Procopio. “Think of how often you’ve read a review and encountered something about the product that you had not considered. Those ‘a-ha!’ moments can be huge for the customer, but the info didn’t come from the manufacturer or retailers.”

On-site reviews also provide a tactical opportunity for ecommerce retailers. Procopio recommends looking for phrases or concepts that are repeated or mentioned often. “Put those words on your landing page,” suggests Procopio. “Product reviews open a channel with the customer, and then you can use that same language in your site copy, in your ads. When we started using customer language, we saw a double-digit increase in conversion rate.”

Data will continue to matter more than ever

In his own conversations with customers and ongoing data analysis, Procopio says he increasingly sees that “people have less time, less patience, and their expectations are higher than ever.”

He sees that as a good thing, though. The best way you can put any data to work for your customer?

“Save the user time,” says Procopio. “Don’t think that long pages of sales copy are going to resonate, because your product is so important to the end user. Offer your value proposition higher and more directly, so the customer is consuming on the terms that they want. Find out what works for your audience—text, infographic, video, whatever—and get it to your audience the way they want.”

Harling also says that data will continue to matter more to ecommerce retailers of all sizes—and the barriers to access have crumbled away. “We now have the tools to discover, plot, and understand data with ease. This extra knowledge allows us to make better-informed decisions, it allows us to quantify and understand those intuitions, and it allows us to be more efficient all around.”

Differentiation and customer experience will now define companies, says Procopio. Already, 89 percent of consumers in a 2016 Salesforce survey said they expect companies to understand their needs and expectations. By 2020, Procopio expects that the number one influencer for a customer decision will be customer experience. Data and solid interpretation will be the ongoing keys to a retailer appealing to customers, exploiting trends, and deploying promotions and new features.

How to put data to work for your ecommerce site

“Continue to test to find out what you want to do,” says Procopio. “Whatever you can do in your industry to help you reduce friction for users, that is going to help you find the biggest wins.”

Here are free or low-cost tools he recommends ecommerce retailers use to gather, interpret, and act on data:

Customers continue to expect seamlessly customized, immersive, yet convenient online shopping experiences. It’s a big challenge for any small business—but the rewards will make it worthwhile.

“If you will do whatever it takes to provide the best experience in branding, you will get and keep their business,” says Procopio. “If you do that in this competitive world, you will stand out.”

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Anthony St. Clair
Anthony St. Clair
Anthony St. Clair is a business copywriter, author of the Rucksack Universe travel fantasy series, and a craft beer writer specializing in Oregon. Learn more at anthonystclair.com.
Posted in Growth & Metrics