This is the last article in our six-part series on the E-Commerce Customer Lifecycle (ECL). It documents the stages of your online shoppers’ interaction with your brand, and provides a reliable, measurable, and predictable process to take your store from inception to success! Read the earlier posts here: Intro to the E-Commerce Customer Lifecycle; How to Drive Traffic to Your Online Store;Increase Conversions; Fulfilling Orders and Mastering Shipping; and Retention Strategies to Maximize Customer Lifetime Value. Photo by Annie Spratt on Unsplash.
Last but certainly not least, our final post in this E-Commerce Customer Lifecycle series is dedicated to the crucial topic of analytics.
You might be wondering why we saved analytics for last? It’s because this topic is a bit different than the other stages of the ECL. Analytics isn’t a standalone stage when it comes to building an e-commerce business. It isn’t used in a bubble as a final step in documenting your success. It is, instead, the foundation that supports and informs the continuous process of growth, change, assessment, revisions, trials, assessment… and on and on.
Analytics is the backbone that keeps all of the other stages working. Moving forward. Progressing. On course to drive you toward your end goals.
It is the data that tells you clearly, in no uncertain terms, what is working and what isn’t working. It gives you the information and tools to improve the other four stages at any point in your growth story.
So let’s dive in and explore how you can use analytics in each stage of the ECL.
Introduction to Analytics Tools
When people first consider exploring analytics for their online business, the resource that often comes to mind is Google Analytics. It’s free, fast and easy to set up, and offers a good baseline of data to work from. But don’t overlook the analytics that are included in your Shopify dashboard - especially Shopify’s Behavior Reports.
Shopify Behavior Reports will show you data such as top search terms (more advanced search term analytics are available from app integrations like Nextopia or Algolia), visitors by landing page, and visitors by device.
A website cart analysis will also show you correlations between products that were added to the cart within a specified time period, which can help inform product bundles or discounts.
There are a ton of other tools and apps that can provide greater insight into your site’s analytics, and we’ll mention some as we dig into analytics for each stage of the ECL.
Analytics for Acquisition
When you’re focused on acquiring more shoppers and customers, you’re probably trying a bunch of different strategies to spread awareness and entice people to check out your store. How do you know which strategies are working and which aren’t?
Yep, you guessed it: Analytics.
Acquisition campaigns may take the form of content marketing, paid advertising, SEO or other strategies, and typically are spread across numerous channels.
The biggest question to ask when it comes to effective acquisition is: Which campaigns and channels are most effective?
To answer this, we’re gonna break it down into two pieces:
- What is your actual spend per channel?
- What are your sales per channel?
Spend Per Channel
Imagine for example that you decided to focus on SEO to boost your customer acquisition. You hire an SEO consultant to help you improve and refine your keywords strategy and develop better long tail keywords to effectively target the right kinds of shoppers for your store. How do you know whether the results of your SEO campaign are worth the costs of the consultant’s fees?
First, you’ll want to look at how much the SEO campaign costs. It might be tempting to simply consider the cost to be your SEO consultant’s fees. But there are probably other costs as well, such as the time spent by you and/or your staff.
To understand the actual spend per channel, it’s important to consider all relevant costs, including:
- Staff time and salaries
- Paid time (retainers, consultant fees, etc.)
- Actual costs for paid media (advertising, etc.)
Sales Per Channel
Once you identify the complete spend per channel for all of the channels you’re using to increase acquisitions, an analytics tool like Google Analytics, Shopify Analytics, Glew or Zaius can help you track sales associated with each channel.
Keep in mind: Sales attribution can be tricky. There’s no one agreed-upon method to attributing a sale to a single initiation point. Some people claim a sale should be attributed to the first touchpoint (such as an ad), others say it’s the last or most recent touchpoint, while others say it should be evenly weighted across channels. There are literally dozens of theories on how to handle sales attribution, which can make it complicated to decipher data.
The best suggestion I can give you is: pick one and stick with it. Be consistent. It’s the best you can do. The data is still valuable and it will help you make more informed decisions than simply guessing or going with your gut (although I’m a big believer in following your gut). But you need data to back up those gut decisions to ensure your taking your business in the right direction.
UTM Codes for Clearer Sales Attribution
One way to clear the air when it comes to sales attribution is by using UTM codes (Urchin Tracking Module). UTM codes can be added to the end of any URL using a question mark to append a source, campaign name, etc. to help identify where a shopper came from - like the below example from Hubspot (the UTM code is highlighted in orange):
This enables Google Analytics to tell you where searchers came from - for both online and offline campaigns - and what campaign directed them to you. UTM codes make it easy to gather data on traffic and conversations for social campaigns, print ads, coupons, radio ads, TV commercials, etc. without creating custom landing pages for each campaign.
Analytics for Conversion
Traditional site analytics like Google Analytics are great for providing a macro-level view of conversions. For this, you can look at statistics such as:
- Most popular content
- Where people are clicking
- How much time shoppers spend on your site
- Bounce rate
- Number of unique visitors
- Number of unique sessions
This data will give you a broad, informed understanding of how people are generally using your site.
There are other tools that you can use to gain a more micro-level view into your conversation analytics (take a look at Hotjar, Lucky Orange, and Heap). These tools provide customer behavior analysis, profile individual users, and can screen record individual user sessions. Some will even illustrate scroll and click behavior using a heat map, like this from Hotjar:
These tools let you dig deeper into how conversions happen on your site: what’s working and where the opportunities are to improve. Although it’s time-prohibitive to consume massive amounts of this type of data, it can be incredibly valuable for gaining real understanding of on-site behaviors and trends
Analytics for Fulfillment
At a glance, fulfillment can seem relatively straight-forward. You may be wondering how much analytics can actually help. But after working with e-commerce companies for the last 10 years, we’ve realized that most business owners significantly underestimate their fulfillment costs.
Many merchants consider fulfillment to be as simple as basic shipping costs. However, there are a lot of other costs to consider in the big picture - everything it takes to get a product from you to your buyer. The risk of underestimating fulfillment costs is over-assuming total profits.
Fulfillment costs also include:
- Customs Fees
- Inventory Storage and Management
App integrations like Avalara, ShipStation, and ShipperHQ offer fulfillment analytics that can help you configure and price shipping properly, taking into consideration a complete (and complex) picture of fulfillment costs.
Analytics for Retention
Retention often comes down to how well you understand your customers. Analytics data is key to developing a deep and nuanced view of your customers, their shopping behaviors, and what motivates them.
Some of the key metrics to growing retention are:
- Customers’ spend
- How much time they spend on your site
- How often they make a purchase
Data to Create Customer Segmentation
Customer segmentation (like this example from Glew) can give you insight into what kinds of shoppers you have: Are they discount driven or value-driven? Excited by exclusives or motivated by what’s popular?
Answering these questions will give you the information you need to develop personalized messaging or push marketing campaigns to highly targeted audiences.
Glew and Zaius are great tools to help you segment your customers. (Other tools like Klaviyo, Salesforce, or other marketing automation or CRM tools can provide insight here as well.) Use them to create customer profiles: individual profiles or macro-level profiles that group customers based on their buying habits.
A Global View of All Your Business Analytics
All of these analytics are enough to jumble anyone’s mind. To make the data easier to use (and wrap your head around), identify the few key metrics that will help you assess how you’re doing in the moment and over time. While those metrics may be different for every business, they may include:
- Average customer acquisition cost
- Average order size
- Return rate
- Order margin
- Number of orders per customer
Once you have identified what your company’s key metrics are, consolidate them together into a single dashboard using a business intelligence tool or KPI dashboard.
Tools like Domo (see example above) or Gecko Board can make it easy to pull together data from across various data sources and aggregate them into a global business view, giving you accountability across all of your metrics.
The most important thing to keep in mind when it comes to analytics and data is that data is not helpful; information is helpful. Data without insight is just a bunch of numbers; it doesn’t mean anything for your business if you can’t turn it into value.
Where to Start With E-commerce Analytics?
It’s impossible to tackle everything all at once. Figure out where to begin by identifying your biggest challenge right now.
Not making enough profits? Not enough leads? Focus on your biggest pain point, and target your analytics attention there first. Work to correct that primary issue. Once it’s working, then identify your next biggest issue. Tackle them one by one, and you’ll be firing on all cylinders in no time.
Read more about Analytics:
- Using Web Analytics to Increase Revenue and Decrease Spending
- SEO Basics: Tracking Results with Analytics
- Using Google Analytics to Measure Profitability
- Configuring Google Analytics to Measure Gross Profit Per Visitor
Other posts from our “Shopify 101” series: