How Data Can Drive Your Revenue and Growth Strategy
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Big 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, expanding their customer base, and increase business growth.
However, it’s not just about the data. It’s how you use it. Here are three steps to put your data to good use.
1. Data points require interpretation to be useful
“Looking at data is great, but the whole purpose is to come out of it with some sort of actionable steps,” says John Procopio, director of marketing and eCommerce at Palo Alto Software, the creators of LivePlan.
That’s the difficult thing about data, there aren’t always clear answers that emerge right away. Still, raw data is necessary to fully understand your customers and those visiting your website. The more you dig into your data, the more you know how to optimize your eCommerce site to fit their needs.
It’s easy to misinterpret data without experience
However, there are plenty of rabbit holes and vanity information that can easily lead you astray. And developing plans and strategies from data takes expertise, interpretation, and nuance. You need statistical knowledge, human empathy, and a logical mind to convert data into actual improvements. 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 you may simply be providing the best answer. And as Google continues to find more ways to proactively address user intent, the more difficult it is to keep users on your site (but that’s a discussion for another time).
If you’re unfamiliar with analyzing data, start here
As a free, easy-to-implement, easy-to-comprehend baseline for any site, Procopio, and the rest of the LivePlan marketing team recommend Google Analytics. The free service can be plugged into virtually any website.
You can dig as deeply into its metrics as you want, but 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.
Your goal should be to work out how users are finding and using your site. Look into bounce rates, returning users, overall page views, and which pages are top performers. From there, you can set up conversion funnels to see how 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?
2. 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.
Areas of your website to run A/B tests
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.
Specific A/B tests you should conduct
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.
When testing — don’t assume
What you think customers do and what they actually do can be quite different. Don’t approach tests assuming you’re right, because a lot of times your changes won’t affect things the way you think. People are complicated and predicting them isn’t easy.
The best thing you can do is be open to any result and look for additional learnings outside of your core test. You may simply be testing different variations of headlines on a landing page. But in the process, you uncover that both options don’t convert, the bounce rate is extremely high and time on the page is lower than the rest of your site.
You could immediately assume that both copy variants aren’t winners, but more than likely there’s something else on the page that is deterring users. Maybe it’s your image choice, branding, or even your button placement being too far down the page. No matter the answer, the key is to take a step back and consider answers outside of your assumptions.
3. 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.
Don’t forget your 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.”
Focus on customer engagement
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.”
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. Now, in 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:
- Marketing analytics and measurement: Google Analytics
- Surveys: Qualaroo or SurveyMonkey
- A/B testing and split testing: Google Optimize or Optimizely
- Email marketing: MailChimp or Constant Contact
- Website builders and web hosts: Squarespace
- eCommerce platforms: Wix or Shopify
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.”
