Data analytics is emerging as critical to any business aiming to stay competitive. The majority of decision-makers now believe that business growth is mainly dependent on how well they can learn about their customers and the efforts put in place to retain them.
Customer learning cycle with analytics
The main goal of businesses adopting analytics is to help them understand their website visitors, convert them into potential customers and eventually turn them into customers. But the initial focus is to build a clear picture of their behaviour based on the following
- Channels that drive customers to your site
- Their intent or what they were looking for
- If they found what they were after and how easy they did
- Outcomes from the journey, i.e., conversions, returning visitors
- What content, product, or service attract which type of customers?
- How profitable are different products or services, and to which type of customers?
Data-driven answers to the above questions
The above questions are data-driven, and they all play an essential role in making a strategic business decision. Metrics in analytics define the relationship between customer behaviour and the available data. For example, sales volume by region is an indicator of popular product or service by geo-location, return visitors signify some degree of customer loyalty, a high rate of abandonment at the checkout page
Why and what to measure?
The three critical aspects of data analytics include visualising data to identify areas that need attention, analysing the data to understand customer behaviour, and driving insights to help the executive team deploy strategic decisions. Therefore, to determine the value of any business process or marketing campaign, the business needs to measure if the process delivers value in line with business goals.
These metrics tell a story about the website content performance as being used. They highlight critical areas in terms of content improvement and navigation structure
- Pag visits/views: The number of customers by visits to your website indicates how popular your content is or how easily someone can find your business on the web. However, depending on the nature of your business, visits as a measurement metric can be meaningless if customers are not converting or finding what they are after.
- Bounce rate: So, the next question will be whether they interacted with your content or left straight after? Again, this can be a good metric for longer journey content, but if the landing page is the content page and the signposting was correct, then again, it may not be of much value
Value metrics help the business measure value, i.e. business benefits against the associated cost. For example, the business can measure the outcome of a marketing campaign by looking at the net profit derived from it. Value is dependent mainly on the customer’s interest in services/products offered. The following are value metrics considered critical to an e-commerce business
- Acquisition: Visitors who have landed on your website via google search, social media or email campaigns enter the acquisition stage. This metric shows which channel drives visitors to your website. It is a good measure, especially when running campaigns. For example, the business can compare dominant traffic channels to run targeted campaigns. Key success measures to consider are the % proportion of referrals from a paid source and % of visitors who translate to a sale
- Conversion: Conversion rate is the ratio of successful transactions to the total visitors to the start page, i.e., visitors who started and completed a transactional journey. Key conversion metrics to consider in an e-commerce journey include click-to-basket rate and click-to-buy rate.
- Abandonment: e-commerce surveys indicate that 70% of customers to an e-commerce website leave without completing a transaction. Some of the key reasons a customer may abandon a product at the checkout page include change of mind due to total cost, comparing the price with a similar product within or outside the website, and the checkout page requiring info they don’t have. The abandonment rate is % the proportion of completed transactions against the total customers who landed on the transaction page. This metric helps the business understand the customer journey and their behaviour. Moreover, it highlights key pain points with the checkout process which hinder the conversions
- Attrition: Customer attrition is when existing customers cease to buy products or services. Customer’s interests or behaviour are always dynamic, which means that what the business provides will at some point become insignificant to a specific customer. For example, a university student will stop buying items specific to their studies upon completion. The customer attrition rate is the % proportion of customers who have either quit or gradually reduced their site engagement. This metric highlights the importance of learning customer behaviour over a time; end-users expect businesses understand their preference while avoiding irrelevant recommendations
- Deploying analytics helps businesses determine what has happened, what will happen, and the action taken.
- Marketing campaigns mainly focus on helping the business target and acquire a customer, but it is critical to convert those customers into returning/paying customers, keep them happy and ultimately transform them into the loyalty scheme