You as an ecommerce business owner are always watching marketing spend. The competition is fierce and entrepreneurs rarely have the financial resources of big companies.
So, how do you reach customers in the most cost-effective way?
Pumping whatever profit you make back into PPC is not a long-term solution. A smarter marketing strategy is to use what you already have: data. Your sales, customer, and product data is a gold mine of opportunities to sell more. This data tells you what marketing strategies are working and who’s buying. All you need is a good ecommerce analytics tool and you have an endless source of insights for marketing.
Why Ecommerce Analytics?
An ecommerce analytics tool processes data from your online store and makes it usable. And by usable, we mean that you get neat reports on revenue trends, traffic sources, product sale performance, customer behavior, and so on.
With this data, you’re able to better market your products – be more relevant, better timed, tailored for specific customer segments, and, as a result, cheaper. It’s cheaper because you aren’t throwing money at a specific marketing channel to see what happens. Ecommerce analytics keeps tabs on what is working and helps you spend your marketing money wisely, with a higher return-on-investment (ROI).
Here are some of the ways you can use data to do more cost-effective marketing.
1. Control Customer Acquisition Costs (CACs)
Acquisition costs are a pain for any ecommerce marketer. With ecommerce analytics, you can keep them under control because you see a clearer picture of return on marketing investment.
Monitor Campaign Performance
If you use analytics to track what’s working, you’ll be able to rinse and repeat the best campaigns. No need to constantly come up with new ideas.
Analytics will tell you which partnerships bring the best referral traffic so you can drop the rest. You can also monitor how influencers are doing in terms of conversions and pay them for each sale made. This saves you significant fees like the average $60 per 1000 blog views which don’t guarantee any sales.
Keep Your Ad Budget Within Limits
Analytics will also help you better manage your ad budget and prevent wasting dollars on poorly performing campaigns.
For example, let’s say you’re spending too much money acquiring new customers that only place one order. With data, you’d be able to track your new acquisitions and their purchasing behavior. From there, you could pinpoint which channel brings in these one-time purchases and stop your customer acquisition funnel from leaking money.
Spend some time looking at your expected customer lifetime value based on historical data to know how much you can afford to spend on acquisition without cutting into your profits.
Measure the Impact of Inbound Marketing
If you’re unsure content marketing works for your brand, make a decision to keep it up or not based on data. Content marketing is a long-term funnel and busy entrepreneurs often lose track of these campaigns.
That’s where an analytics tool can help. It’ll show you if people complete a sale after reading an article on your blog,- then you know it’s worth doubling down on this strategy.
2. Pay Less for Ads Using More Email
Email marketing is cheaper than ads and you can really ace it with the right insights from your analytics tool. Virtually, every step of the customer journey can be enhanced based on data and email marketing. Below are areas you can improve on today:
Nurture Potential Customers
Nurturing is the process of capturing people’s emails and engaging them until they purchase. Use exclusive offers or your blog to get them to register on your site.
Then, use the email as an identifier and look in your ecommerce analytics: what pages they visit on your site, what content they read, what products they look at, what gets added to their cart but doesn’t get ordered, how often they browse, etc. Use this information to craft engaging messages to keep their interest – give them more of the info they consume, talk about the products they looked at, and so on until they convert.
Engage and Retain
When you know what people are interested in, it’s easier to keep a mutually beneficial relationship going. Engaging existing customers will help you drive repeat sales and you won’t need to spend as much on ads to acquire new customers.
You can send them relevant information for the products they like and customize the offers. You can also look at buying cycles and remind people they’re running out of products to increase order frequency.
Emails can be more effective than remarketing ads. You can automate an email to offer a discount coupon for the particular product viewed. It’s free and saves you from giving out too many discounts.
3. Craft the Right Offers That Sell
Instead of wasting money promoting offers no one wants, look at data to create product bundles and other special offers people will come swarming for. Here are a few examples:
- Bundles – product correlation reports will show which products are frequently bought together. Create bundled listings and sell these across all your sales channels.
- Products with high conversion or customer retention rates – maybe you’re not promoting the right products. It’s a better marketing investment to promote products that get more sales in the short or, even better, in the long run.
- Best working offers and coupons – what types work best? Buy one, get one free? Pure percentage off discounts? New in? Early bird? Find out in your analytics report and reuse them as much as possible.
- Promotional quantities – look at historical data of quantities sold, and accurately estimate inventory needed so you don’t run out during a promotion.
4. Know Your Customers
Ecommerce analytics facilitates the understanding of the people behind the orders. The more you know how and why they make buying decisions, the better you can influence the process.
Tailor Offers by Taste
Once you have some history on your customers, you can customize the offers, the messaging, and even the timing. Highlight categories they shop from and avoid those that they never look at. Personalize exclusive offers instead of running blanket promotions. This saves your margins from unneeded discounts.
With proper data, you can even time your reactivation emails for the best possible moment when people are ready to shop. Sending a good offer just before they typically make a purchase (based on your analytics) is not seen as a pushy sales tactic and converts well.
Take Different Approaches Based on Tiers
Analytics can help you create customer segments based on shopping habits so you can engage with each type of customer differently:
- High spenders, for one, should receive special treatment and priority customer service.
- Frequent shoppers can get a personal free shipping code.
- Long-term, loyal customers can get insider deals and be involved in product development.
- Dissatisfied first-timers can be approached with special care to fix the problem.
Analytics gives you the power to make more meaningful connections with customers that ultimately translates into loyalty, revenue, and a profitable business.
5. Create the Best Lookalike Audiences
You probably model lookalike audiences based on your target persona. Try taking this a bit further. Updating your lookalike audiences after the most loyal customers, the highest spenders, or the most frequent shoppers will bring you better leads.
Save Money In the Long Run with Ecommerce Analytics
Ecommerce analytics saves you money on marketing because data enables you to run more targeted, relevant, and timely campaigns. This will lead to more qualified traffic and better conversions. For more tips, check out our post on the Top Inventory Analysis Reports for Online Merchants.
About the Author – Murry Ivanoff is the CEO of Metrilo, an ecommerce analytics, CRM and email marketing platform. Metrilo helps ecommerce brands grow sustainably thanks to data and insights.